Organisations in Hong Kong are tipping an average pay increase of 3% to staff in 2021 as they budget carefully during the ongoing impact of the pandemic, even as the vaccine is slated to begin roll-out next month or early March.
Survey results indicated that just shy of 70% of companies predicted an average pay increase between 3% and 3.5% – while management was expected to receive an average salary increase of 2.4%.
More than eight out of ten (82%) of respondents said they intended to freeze their headcounts for the rest of the year, while around a third (35%) will either reduce their bonus payouts or offer no bonus at all.
This would be offset by some companies offering sweeteners such as flexible working hours or the uptake of wellbeing programmes.
The results were based on findings from 536 Hong Kong companies across 14 sectors, surveyed between April and August 2020 by consultancy firm Mercer.
“I would say imposing a pay cut is the last thing they want to do. You can reduce the working hours, reduce the shifts and also ask the staff to take some leave. There are different ways you can reduce the company costs,” Brian Sy, head of career products and total rewards at Mercer, told the SCMP.
“Both 2019 and 2020 were challenging years for Hong Kong businesses due to the civil unrest and an economic upheaval triggered by the Covid-19 pandemic.
“While the impact is uneven across industries with high tech and life sciences still fairly resilient, we can expect bonuses in 2021 to shrink further on the back of sustained economic uncertainty,” he added.
In other findings, 60% of companies surveyed said that they were unsure about their salary budget for the year ahead, while almost a quarter (23%) forecast the allocations to shrink. One in 20 (6%) planned to put in place a temporary pay reduction.
A total of 80% of companies polled will consider implementing flexible working for staff. To accommodate this, almost a third of respondents (30%) said the planned to provide WFH tools and subsidies to their staff – including allowances for WFH-related costs such as home office set-up and accessing external online learning platforms.