More firms increase salaries, bonuses
Average 1.7pc pay rise as outlook brightens
Paggie Leung
May 11, 2010
Salaries have begun to creep up again after dropping last year in the wake of the financial crisis.Pay rises averaging 1.7 per cent were awarded by some companies in January, according to a survey by the Hong Kong Institute of Human Resource Management.
This compares with a 0.5 per cent increase at the same time last year and a reduction of 0.6 per cent for the full year.
"Employees can finally get a bigger pay increase this year, [with] adjustment growth returned to the pace seen in 2005," Lai Kam-tong, a co-chairman of the institute's remuneration committee, said.
Salaries rose for five consecutive years from 2004, the year after the dramatic economic slump caused by the Sars epidemic, to almost 4 per cent in 2008, but fell again last year.
In the poll of 125 companies, the institute found 30 firms, employing about 37,500 people, adjusted wages in January. The rest froze their employees' pay but there were no reductions.
The survey also found that nearly two-thirds of the employees in those 30 firms would get higher pay this year, up from one-fifth a year earlier.
"Data shows that employers in general are more optimistic about the future business environment. Better pay increments may also help companies compete for and retain high-quality talent," Lai said.
Companies in the construction sector were the most generous, up by 3.2 per cent, followed by banking and manufacturing, at 2.9 per cent and 2.5 per cent respectively.
But unlike last year, which saw 45 firms adjust their pay at the beginning of the year, Lai believed more employers postponed their adjustment to last month because they were uncertain about the economy.
Thirty companies also gave non-guaranteed bonuses this year, with almost 94 per cent of staff getting amounts averaging about 1.17 months of base pay. Last year, 93.2 per cent of eligible employees got a bonus of 1.08 months.
A further 38 companies offered a guaranteed bonus policy for employees and the bonus size was about 1.01 months of their basic salary this year, which was similar to figures in previous years, Lai said.
Lawrence Hung Yu-yun, another co-chairman of the institute's remuneration committee, said: "We are happy to see that companies posting a good business performance last year are willing to share fruitful results with their employees."
The organisation said that as the city's economic situation was improving, more job opportunities were available and employees would have higher expectations for a bigger pay cheque.
"A flexible and fair incentive system can help motivate employees to drive business success whether in good or bad times," Hung said.
"Employers have to set effective reward strategies and should be able to walk the talk as regards rewarding and recognising outstanding individuals who make a significant contribution to business success."