In 2020, many employees suffered a reduction in salary growth due to adverse financial impacts on business from socio-political tensions and the pandemic. The reduction in growth dropped from 4% in 2019 to 2.1% in 2020. That brings to an estimate that 2 in 5 Hong Kong employees were not getting any wage increase at all.
However, experts have forecasted that there will be an increase in salary growth to an average of 3% in 2021 as businesses remain hopeful of a gradual economic recovery. In the APAC region, lower salary growth rates are observed across all locations as well, but their average forecasted increase in 2021 is relatively higher at 4.3% as compared to Hong Kong.
Real salaries in Hong Kong however – salary after the consideration of inflation – will still be estimated to be low, at a forecasted figure of 0.6% this year. In comparison with Singapore’s forecasted figure of 2.7%, this is an observable gap, which may reflect Hong Kong’s pace in keeping up with remaining competitive economically.
These forecasts take into account that lesser companies are now implementing salary freezes. A study by ECA International revealed that the average real salary increase across the APAC region is forecasted at 1.7%, which is much higher than the global average of 0.5%. Since the inflation rate in Asia is not too far off the global average, this forecasted increase is attributed to quick adaptation to the pandemic, leading to sustained productivity and hence, possible salary increases.
China is another country to show positive signs of recovery, and China employees can expect to see a 5% salary increase, up from 3.8% in 2020. Real salary growth is forecasted to be an average of 2.3%, slightly behind Singapore. However, China has shown remarkable improvements and resilience in terms of managing the impact of COVID19.
This article is written with reference from:
ECA International. (2020, November 18). Workers in Hong Kong set to see recovery in salary increases in 2021. Retrieved June 21, 2021, from Eca-international.com website: https://www.eca-international.com/news/november-2020/workers-in-hong-kong-set-to-see-recovery-in-salary