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Meanwhile, most APAC employers are also being more conservative with salary increases.
Hong Kong’s overall average pay rise for 2024 remains the same as last year at 4%, as over one-third of organisations (37.7%) in the city are reported to have lowered their salary budgets for the current cycle, according to the latest Salary Budget Planning Report by WTW.
The report showed that 34.1% of Hong Kong companies have reduced their current salary budget from previous projections, while 41.1% had their budgets remain constant.
This comes as employers look towards longer term stability in their employee base, as they see a period of high resignation and turnover has passed, and they are able to maintain their headcount.
Inflationary pressures, concerns related to cost management, and weaker financial results are cited as the leading causes for the lower salary budgets.
Instead, to address current market conditions and employee needs, organisations are prioritising on improving the employee experience, placing broader emphasis on diversity, equity and inclusion, and increasing training opportunities.
Looking forward to 2025, the overall salary budget increases are expected to stay at 4%.
While the overall pay rise remains flat, roles in data science and business intelligence have witnessed a salary surge by 8.3% given the strong demand for critical talent.
In the field of human resources, competition for talent has been evident, particularly for key roles in environment, social and governance (ESG), employee wellbeing, and productivity.
Salary budgets in other APAC markets
Similar pay trends are observed in other APAC markets. Salary increase rates are relatively stable in most markets in North Asia and Southeast Asia, with the salary budget increase in APAC decreasing from 5.9% in 2023 to 5.7% this year and projected to be at 5.8% in 2025.
Having said that, markets such as India, Vietnam and Indonesia still see the highest salary increase rate in the region at 9.5%, 7.5% and 6.4% respectively in 2024.
2023-2025 actual salary increase rates across APAC markets
|
Markets |
2023 actual salary increase |
2024 actual salary increase |
2025 projected salary increase |
|
Australia |
4.0% |
3.8% |
4.0% |
|
China |
5.8% |
5.1% |
5.0% |
|
Hong Kong |
4.0% |
4.0% |
4.0% |
|
India |
9.8% |
9.5% |
9.5% |
|
Indonesia |
6.7% |
6.4% |
6.4% |
|
Japan |
3.0% |
3.0% |
3.0% |
|
Malaysia |
5.0% |
5.0% |
5.0% |
|
Philippines |
5.7% |
5.6% |
5.6% |
|
Singapore |
4.1% |
4.0% |
4.0% |
|
South Korea |
4.5% |
4.5% |
4.5% |
|
Taiwan |
4.0% |
4.0% |
4.0% |
|
Thailand |
5.0% |
5.0% |
5.0% |
|
Vietnam |
8.0% |
7.5% |
7.6% |
In Singapore, the demand for digital talent remains robust as the fintech and digital payment industries continue to offer a 39% premium to attract key talent. Traditional manufacturing companies are also upskilling their workforce to integrate automation into their operations.
“The transformation potential of AI has made it the most sought-after technology discipline in the global talent market,” said Edward Hsu, Rewards Data Intelligence Leader, International and Asia Pacific, WTW.
“As such, organisations around the world are willing to invest heavily in skilled professionals who can drive innovation and growth in the AI space, giving companies the upper hand in today’s competitive business environment.”
Employee headcount
Compared to other North Asian markets, the overall average voluntary staff attrition rate in Hong Kong remains high at 14.1% in the last 12 months. The rate is 8.7% in China, 7.9% in Japan, 9.7% in South Korea, and 11% in Taiwan.
The high attrition rate can be attributed to the trend of continual emigration out of the city, leading to shortage of labour locally.
Meanwhile, 13.5% of Hong Kong companies plan to increase headcount in the next 12 months, driven by the resumption of recruitment across industries. Only 5.4% intend to reduce headcount, while 81.1% aim to maintain their current recruitment strategy.
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