Increase in salary expectations amid tighter employment market
Hong Kong is experiencing increased optimism in the business sector in 2023, resulting in higher expected headcount demand from employers that will drive career opportunities and higher salaries, according to KPMG China. In the tight employment market, KPMG China emphasises the need for employers to recruit, reward and retain talent.
Talent retention and attraction are likely to be major concerns for employers in 2023. Expectations for salary increments when changing jobs remain high among respondents to the survey. At the same time, salary reviews are increasingly being used as part of companies’ retention strategy. Remuneration remains the most important motivation for professionals to consider switching jobs, companies also need to take note of the other benefits desired by employees, including flexible working options, housing benefits and share-based awards.
For KPMG China’s 2023 report titled Hong Kong Executive Salary Outlook 2023, 1,327 business executives and professionals were surveyed to measure the employment trends in Hong Kong and across the GBA (Greater Bay Area). Among these, 645 respondents work or have a home base in Chinese Hong Kong and 682 respondents work or have a home base in the Chinese Mainland. The research covered areas including latest headcount expectations, salary and bonus outlook, and other talent trends.
Murray Sarelius, Partner, People Services, KPMG China, says: “The observed increase in headcount and salary expectations reflect the anticipated recovery as Hong Kong emerges from the removal of pandemic-related restrictions and the benefit of government support measures, while employers are looking for growth opportunities. In the tight employment market currently being experienced in Hong Kong, this demand for headcount can be expected to create strong competition for talent. This anticipated competition for talent has been reflected in similarly high expectations of salary increases in those industries that are showing the strongest intentions to increase their headcount.”
In a tight employment market, organisations need to focus on sourcing talent, remaining competitive in remuneration, and having good recruitment support. Talent shortages might be countered by hiring from outside traditional sectors and geographies, although salary and benefit offers need to be competitive with those target industries or locations. Facing budget constraints and limited resources amid Hong Kong’s recovery, companies must identify the types of compensation and benefits that resonate the most with the staff and candidates. In such an environment, the government’s new policies to attract talent will be welcome as companies are looking more broadly for the talent to address business opportunities.
Hong Kong professionals adopted flexible work arrangements during COVID-19 and expect these work practices to continue now that the situation has improved. Close to three-quarters (74 per cent) of survey respondents rated flexible working among their top five most important benefits, yet only 49 per cent of Hong Kong employers offer such benefits. Work flexibility and work life balance moved up to become the third most important motivation to switch jobs, after the salary and compensation package, and career progression and promotion. Flexibility and balance are therefore aspects that would allow an organisation to differentiate itself in the employment market or, if not offered, could contribute to higher employee turnover.
David Siew, Partner, People Services, KPMG China, says “The Chinese Mainland’s new multi-entry visa scheme that will allow highly skilled talent to travel freely across the GBA, not only indicates that there is broad-based agreement on the long-term career potential of the region, but also creates a wider talent pool across the area. Businesses may consider having a mobility policy in place to encourage skilled personnel to move and work in different cities to engage with a wider group of talent-building economic activity.”
Hong Kong has reopened, and its employment market is expected to maintain momentum in 2023. More than a third (37 per cent) of all respondents expect staff numbers at the Hong Kong operations of their organisations to increase in 2023, up from 35 per cent in 2022, with the percentage rising to 44 per cent in 2023 from 40 per cent in 2022 for C-level and HR respondents. Economic recovery is still a key theme for Hong Kong, and frontline staff such as sales, fee earners and client relations roles are expected to see the highest headcount increases.
The survey finds that salary expectations for 2023 will continue their upward trend. 74 per cent of respondents expect an increase in salary in 2023, compared with 66 per cent in the previous year. However, bonus expectations for 2023 have moderated slightly, with 44 per cent of respondents expecting an increase compared with 48 per cent last year.
Michelle Hui, Director, Executive Search and Recruitment, KPMG China, says: “Despite a more challenging economic backdrop, the survey suggests that Hong Kong’s reopening and further relaxations of its anti-epidemic measures will provide a boost to the local economy, and the salary levels of professionals. With the Hong Kong economy having contracted in 2022, respondents appear to be more conservative about their bonus for 2023, which could be because respondents are mindful of a more challenging global economic climate and have adjusted their expectations.”
Tags: Hong KongKPMG China
