Retail in Asia

In People

HK pay rises projected to be 4.5pc in 2014

Employees in Hong Kong can expect to see their salaries increase by an average of 4.5 percent in 2014, according to the latest Salary Trends survey by ECA International.

The figure is the same as the uplift local employees received this year, but with inflation of 3.5 percent forecast for next year, the projected salary increase amounts to just 1 percent in real terms.

"A wage increase of just 1 percent after adjusting for inflation means that employees in Hong Kong will receive some of the lowest wage rises in the world next year in real terms," said Lee Quane, regional director – Asia, ECA International. "On a more positive note, this real wage increase is actually higher than the increase recorded in 2012, and roughly the same as the one recorded here for 2013."

Despite the marginal increase expected for Hong Kong, Asia as a whole is the region where employees will see the highest real wage increases.

While companies in Singapore are also anticipating 4.5 percent salary increases next year, inflation is predicted to be lower than in Hong Kong. As a result, employees there will feel better off.

Meanwhile, Employees in mainland China look set to experience some of the highest wage rises in the region, both before and after inflation is factored in. Companies there predict salary increases of 8 percent. Allowing for inflation of 3 percent in 2014, Chinese workers will see a 5 percent increase in real terms – the highest in Asia and among the highest worldwide. Employees in Guangzhou and Shenzhen are likely to receive slightly higher increases than their counterparts in Shanghai and Beijing.

"In China, an ongoing need to attract and retain skilled workers, who are in short supply, is driving up wage increases to among the highest levels in our survey," said Quane. "Over time, this trend may significantly narrow the traditional salary gap between China and Hong Kong. Our recent global research on buying power around the world also suggested that Chinese executives could even be better off than their US counterparts by 2017 if the current trends continue. At present, salaries in China are increasing at more than double the pace of salaries in the United States."

Companies in Pakistan are forecasting 13 percent salary hikes for their staff next year – the highest in Asia. Even with predicted inflation of 8 percent, employees there are also set to receive the second-highest ‘real’ increases in Asia after China.

Workers in Japan will continue to experience the region’s lowest wage increases. If inflation rises to the 2.9 per cent predicted by the IMF for 2014, they could experience a reduction in their buying power next year.

ECA’s 2013/2014 Salary Trends Survey reports current and projected salary increases for local employees. This year, it is based on information collected from 316 multinational companies across 64 countries and regions. Around 112 companies provided data on their Hong Kong-based staff.