Many companies in Hong Kong have not set a budgeted pay adjustment for 2009, in view of the recent credit crunch.
According to the 2008 pay trend survey conducted by the Hong Kong Institute of Human Resource Management (HKIHRM), most of the companies surveyed indicate that they have not budgeted pay adjustment for next year. For the 41 companies that have provided budgeted data, more than 90% expect an overall budget increase of 3.5%. Three companies interviewed expect a pay freeze while one company forecasts a pay reduction.
The survey has also found that a pay increase of 3.9% was recorded in 2008, 1.1 percentage points higher than the average adjustment in 2007. This figure was also the highest increase recorded since 1999.
It is reported that small companies offered the highest pay rise (4.6%) in 2008. The highest adjustment was found in banking & finance (5.3%), followed by shipping (4.8%), insurance (4.6%), and chemical sectors (4.6%).
Lai Kam-tong, Co-chairman of the Remuneration Committee of the HKIHRM, says that as the financial crisis is now affecting economies worldwide, employers are now facing uncertainties, and may hold back plans for expansion and hiring. He adds that banking & finance has already been forecasting a negative pay adjustment for 2009.
This survey was conducted between January and October 2008, covering 107 companies that hire more than 120,000 full-time paid staff from 16 job sectors. Among these companies, 100 provided data on pay adjustments.
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