Pay Increase Back to Reward Agenda

(Monday, May 10, 2010)

Pay Increase Back to Reward Agenda
January figures show companies are willing to share fruitful results with employees


[May 10, 2010 - Hong Kong]   After a dramatic dip in salary growth in 2009, an upward adjustment in pay has returned catching that of 2005, according to the latest results of theHKIHRM January 2010 Hong Kong Pay Trend Survey. The survey, which has been tracking pay adjustments in Hong Kong for more than two decades, was conducted by the Hong Kong Institute of Human Resource Management (HKIHRM). 

The HKIHRM January 2010 Hong Kong Pay Trend Survey surveyed 125 prominent Hong Kong companies from 13 business sectors. A total of 30 companies, employing some 37,500 employees, confirmed their pay adjustments during the survey period and provided relevant data for the survey.

Base Pay Adjustments in January 2010

The overall average pay adjustment recorded for the 30 companies was 1.7% (weighted average), 1.2 percentage points higher than the figure recorded for the same period last year (0.5%). Among these companies, pay increase has become the prevailing trend, with 93.3% of them making an overall pay increase. The remainder adopted a pay freeze for their staff. No overall pay reduction was recorded.

By business sector (of those that provided sufficient data for analysis), companies offering relatively higher pay increases are found in the construction sector (3.2%), followed by the banking (2.9%), manufacturing (2.5%) and retail (2.1%) sectors. No business sector recorded an overall pay freeze or reduction in January 2010.

Following the recovery of the economic situation in the second quarter of 2009, the percentage of companies offering a pay increase has increased dramatically from 31.1% in January 2009 to 93.3% in January 2010. No pay cut has been recorded for seven consecutive years.

In terms of employee numbers, there was a sharp increase in January this year in the percentage of employees getting a positive adjustment in base pay. No employees faced a pay cut in January 2010.

The survey results revealed that most companies in Hong Kong responded to the global economic crisis by freezing pay increments last year. Yet the trend is set to gradually change in 2010. "While employees can finally get a bigger pay increase this year, adjustment growth is returned to the pace seen in 2005. Meanwhile, data shows that employers in general are more optimistic about the future business environment. Better pay increments may also help companies compete for and retain high-quality talent," said Mr Lai Kam-tong, Co-chairman of the Remuneration Committee of the HKIHRM.

Bonus Payments in January 2010

Of the 81 companies providing data on bonus payments, 38 companies have a guaranteed-bonus policy. One company made changes to its policy by incorporating a guaranteed bonus into its base pay in 2010. This year, 38 companies awarded a guaranteed bonus to their employees, with the average bonus size being 1.01 months of base pay.

On the other hand, a total of 30 companies with a non-guaranteed bonus scheme confirmed a bonus payment during the survey period. Of their eligible employees, 93.9% were awarded a non-guaranteed bonus, with the average bonus size being 1.17 months of pay. This compared with the 93.2% of eligible employees actually awarded a bonus of 1.08 months of pay in the same period last year.

"We are happy to see that companies posting a good business performance last year are willing to share fruitful results with their employees. A flexible and fair incentive system can help motivate employees to drive business success whether in good times or bad. Employers have to set effective reward strategies and should be able to walk-the-talk as regards rewarding and recognsing outstanding individuals who make a significant contribution to the business success," added Mr Lawrence Hung Yu-yun, also Co-chairman of the Remuneration Committee.


As the economic situation in Hong Kong is improving, more job opportunities are becoming available in the labour market and employees in general now have higher expectations for a bigger pay cheque. “Apart from base pay adjustment, an effective reward management should link up with a fair and transparent performance management system in order to engage and motivate employees. Reward strategy is also a powerful tool to shape performance culture of an organisation. Communication on the reward principles is essential in driving employees towards common business goals,” concluded Mr Lai.


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As the most representative professional human resource institute in Hong Kong, the Hong Kong Institute of Human Resource Management (HKIHRM), a non-profit making organisation, has over 4,900 individual and corporate members. Founded in February 1977, the Institute aims at developing, maintaining and enhancing professional standards in HR management, and increasing the perceived value and influence of the HR profession. The Institute organises a wide range of professional activities such as multi-level training programmes and conferences, and provides services such as conducting surveys and publishing a professional journal. The HKIHRM is a member of the Asia Pacific Federation of Human Resource Management which is one of the continental federations under the World Federation of People Management Associations. For more information, please visit our website at





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