While the estimated salary hike in 2018 is 3.9% for both Hong Kong and Singapore, companies in the two markets have lower hiring intentions compared with other markets in Asia Pacific, according to Mercer’s Global Compensation Planning Report and Total Remuneration Survey.
The hike in the two markets is higher than those in Australia (3%) and Zealand (3%), but is lower than those estimated for India (9.8%) and Vietnam (9.1% ), Indonesia (8.1%), The Philippines (6.3%), Malaysia (5.5%), and Thailand (5%).
In addition, real wage growth has also been steadily rising in the region, often reaching double digits in emerging markets. And, while forecasts vary quite widely across specific industries, the strongest push is likely to come from the chemical and life sciences industries, said Mercer.
Hiring outlook positive in the region
Hiring in India, Vietnam and the Philippines is happening at a greater pace compared with other countries in the region, whereas hiring intentions are lower in Singapore, Malaysia and Hong Kong, Mercer observed.
The overall hiring outlook is positive, however, with five out of 10 companies looking to maintain headcount, including replacements for turnover.
In Asia, 48% of companies report having difficulty filling-in vacant positions, as compared with 38% of the companies globally struggling to find the right talent to fuel their business expansion.
Hong Kong: Life sciences to see highest base salary hike
The high-tech industry in Hong Kong is slated to see the highest base salary increases. Life sciences (4.5%), chemicals (4.3%), and consumer goods (4.3%) are the industries with highest salary increase in Hong Kong, while the biggest functional premium is for the sales and corporate affairs functions, said Mercer.
In addition, Hong Kong employees—more than 53%—want their employers to focus more on their health and wellness, implying the need for a stronger focus on differentiation through benefits.
“Hiring, retaining and engaging skilled talent in Hong Kong will continue to be a top priority for companies looking to leverage the strong macroeconomic outlook for 2018,” said Robert Li, Career Business Leader at Mercer Hong Kong.
“We continue to see a high level of pay increases used as a retention tool for high-performing talent. This has become even more critical, especially with the cross-industry movement of talent in specialist roles such as sales and engineering. We also find companies deleveraging pay in the wake of increased regulatory scrutiny of bonus payouts, thereby reducing year-end bonuses and increasing base pay instead to reduce excessive risk-taking and discretion.”
First published in CFO Innovation