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Hong Kong remains competitively positioned to attract companies looking to establish a presence in Asia, especially multinationals looking to gain a foothold in China, according to the Michael Page Hong Kong 2014 Salary & Employment Forecast. However, talented professionals remain in short supply.
The report’s findings are based on an annual survey of employers in Hong Kong that includes responses from companies ranging from market leading multinationals to small and medium-sized enterprises. More than 500 employers contributed their views on salary increases, employee retention, bonus payments, and recruitment activity. The report also includes market insights from the team of experienced Michael Page recruiters in Hong Kong.
According to this year’s report, average salaries in Hong Kong are expected to increase over the next 12 months, with 71% of all surveyed employers expected to offer salary increases of between +1% and +5%. Sectors expected to provide employees with a higher salary increase of between +6% and +10% include Procurement & Supply Chain (50%), Secretarial & Office Support (42%) and Legal (33%). Based on survey responses, salary levels will primarily be affected by factors; such as global economic conditions (60%), domestic economic conditions (58%), and competition between companies for talent (52%).
Andy Bentote, Senior Managing Director of PageGroup in Hong Kong and Southern China, commented: “The business-friendly environment in Hong Kong continues to attract many of the world’s best known companies. While some established businesses are beginning to look at setting up in other cities such as Shanghai and Singapore, Hong Kong’s deep pool of talent makes it hard to beat for companies starting out in the region.”
Thanks to a robust employment market, Michael Page also witnessed significant growth in Greater China and achieved record revenue for the region in 2013. In particular, a resurgence in Financial Services in Hong Kong contributed to its revenue growth. Meanwhile, Michael Page also expanded its recruitment consulting team and increased its headcount by +21% to 420.
“Our focus has been to grow our business in line with our clients’ needs. For 2014, we believe that staff retention will be the key theme for employers in Hong Kong as competition for the best performers will be strong. Salaries are expected to rise across the board in line with inflation, but employee benefits are starting to play a bigger role in the decision-making process of employees,” Mr Bentote continued.
While Hong Kong is a mature employment market, there is progress to be made with regard to the employee benefits offered by organisations. According to survey findings, 88% of employers plan to provide a bonus as part of the remuneration package however fewer businesses are offering non-financial benefits to retain talent, with 52% of surveyed employers to offer flexible working arrangements (up from 39% in the previous year’s survey), 45% plan to run team building activities and just 20% providing sabbatical leave.
Mr Bentote explained: “We know that the prime motivator employers use to retain staff is money. Although it isn’t common practice for companies in Hong Kong to grasp the importance of non-financial benefits, particularly when compared to employers in other developed markets, this is starting to change.”
Other report insights reveal that recruitment activity this year is expected to be strong in areas including retail, as ongoing consumer spending and the continued expansion of international retailers create demand for skilled retail staff. Meanwhile, the banking sector has seen improvements and this has led to hiring within mid-tier financial institutions in Hong Kong, especially small to medium-sized international banks.
“Employers not only need to deploy a strong hiring strategy this year but also ensure that they are able to retain staff in a market where the average tenure of roles is only one to two years. The right mix of financial incentives and employee benefits will be key to retaining the best performers in 2014,” Mr Bentote concluded.