Average Base Pay Increase by 3.7% in First Four Months of 2011

(Thursday, July 28, 2011)

Average Base Pay Increase by 3.7% in First Four Months of 2011

Employees receiving a bigger pay cheque under positive economic climate



[28 July 2011 - Hong Kong]   Positive sentiment in economic development gave rise to a continuous upward trend in base pay adjustment in the first four months of 2011, according to the results of the HKIHRM April 2011 Hong Kong Pay Trend Survey. The survey, which has been tracking pay adjustment in Hong Kong for more than two decades, was conducted by the Hong Kong Institute of Human Resource Management (HKIHRM). 


Base Pay Adjustment – January to April 2011

A total of 68 companies from 14 sectors, employing 79,465 employees and making base pay adjustment between Jan and Apr 2011, confirmed their pay adjustment during the survey period (Jan and Apr) and provided relevant base pay adjustment data for the survey.


The overall average base pay adjustment recorded for the 68 companies was 3.7%(weighted average), 1.9 percentage points higher than the figure recorded for the same period last year (1.8%). All of them offered an overall pay increase.


By business sector (of those that provided sufficient data for analysis), companies from the financial services sector (7.5%) offered higher pay increase, followed by banking (5.4%) and construction (5.2%) sectors. No business sector recorded an overall pay freeze or reduction in this period.


All companies surveyed offered a base pay increase as compared to 95.2% in the same period 2010. No pay cut has been recorded for eight consecutive years (please see Chart 1 in Appendix).


In terms of employee numbers, there was a further increase this year in the percentage of employees getting a positive adjustment in base pay. No employees faced a pay cut (please see Chart 2 in Appendix).


The survey results revealed that base pay adjustment continued with an upward trend under the backdrop of a flourishing economy in the first four months of this year. “Data shows that with a vibrant labour market, employers had to offer more attractive pay to remain competitive in the relevant labour market. This was particularly true for some sectors which experienced faster expansion, where better pay increments had to be offered to retain high-quality talents,” said Mr Lawrence Hung, Chairperson of the Remuneration Committee of the HKIHRM.


Bonus Payments – January to April 2011

Of the 90 companies providing data on bonus payments, 41 companies reported that they have a guaranteed-bonus policy, no company made changes to this policy in 2011. All these 41 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 62 companies with a non-guaranteed bonus schemeconfirmed a bonus payment during the survey period. Of their eligible employees, 97.4% were awarded a non-guaranteed bonus, with the average bonus size being 1.46 months of base pay. This compared with the 94.5% of eligible employees actually awarded a bonus of 1.27 months of pay in the same period last year.


“More companies choose to offer non-guaranteed instead of guaranteed bonus as an important component of a flexible and fair incentive system. In the private sector, base pay adjustment and bonus incentive are more increasingly based on corporate results, individual work performance and market benchmark, while inflation is not the primary factor. It is believed that a performance-based reward system focusing on total remuneration can better motivate employees to help drive business success and growth. As the HKIHRM has always been promoting, an effective reward management should link up with a fair and transparent performance management system in order to engage employees,” remarked Mr Hung.


Impact of Minimum Wage on Remuneration Arrangement

86 companies provided data on this question, with 10 companies expressing no opinion. For the remaining 76 companies, 57.9% indicated limited impact, 26.3% indicated no impact and 15.8% indicated significant impact.


Views on Outlook of Labour Market 2011

This year, the survey captured respondents’ views on the outlook of the labour market for the first time. Among the 76 companies which provided data and expressed an opinion, 65.8% anticipated a growth in demand in the labour market, with such anticipation being more prevalent in the financial services, construction, property development/management, insurance and retail sectors.



In the first four months of this year, the economic outlook of Hong Kong was continuously positive. More job opportunities were available in the labour market, accompanied by attractive base pay adjustment and rewarding incentives, especially for some sectors.


“In recent months, employers are paying more attention to the possible effects of the tightening of credit control in China, performance of the US economy and employment market, as well as concerns about the fiscal sustainability of some European countries. Whether pay adjustment in the rest of this year may be affected, our future pay trend survey will be able to track,” concluded Mr Hung.


It was noticed that in the few months after these surveys were conducted, some new developments had been observed in the labour market regarding pay adjustment. The HKIHRM Hong Kong Pay Trend Survey will continue to track pay adjustment trend and reflect real market situation.




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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 http://www.hkihrm.org.




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