Forecast on Base Pay Adjustment at 4.7%

(Wednesday, February 08, 2012)

Forecast on Base Pay Adjustment at 4.7%

Employers remain cautious on pay adjustment decision



[8 February 2012 - Hong Kong]  Employers at large tend to remain cautious in respect to pay adjustment decision amid a possible global economic slowdown. The average base pay adjustment forecast dropped to 4.7%, slightly lower than the 5% projection captured in October 2011.


The findings were revealed in the results of the HKIHRM 2011 Pay Trend Survey - Follow-up Survey on 2012 Forecasted Base Pay Adjustment conducted by the Hong KongInstitute of Human Resource Management (HKIHRM). The survey covers a total of 66 companies from 17 different industry or business sectors. Key findings of the survey are as follows:


Base Pay Adjustment Forecast in January 2012

Among the 66 surveyed companies, 40 of them, employing 29,613 employees, will have their base pay adjustment during the period January to April. They indicated their pay adjustment forecast during the survey period (January) and provided relevant base pay adjustment data.


Among these 40 companies, 95% (38 companies) forecasted an overall budgeted pay increase. The forecasted average base pay adjustment by all these companies is 4.7%(weighted average), 0.3 percentage points lower than the forecast of 5% captured in October 2011. (Chart 1) Meanwhile, 5% (two companies) anticipated no pay adjustment while no company projected a pay reduction.


By business sector (of those that provided sufficient data for analysis), companies projecting relatively higher pay increases are found in the non-governmental organisation sector (7.1%), followed by construction (5.7%) and shipping/terminals (5.5%) sectors. (Chart 2)


In terms of employee numbers, 98.6% of employees may expect to receive a base pay increase while 1.4% of employees a zero pay adjustment, and none will have a pay reduction.


“These findings are consistent with the base pay adjustment forecast the Institute released in November 2011. Despite the prevailing uncertainties in the global economy, a forecast on base pay increase was still recorded across most industry sectors. In some sectors which experienced faster expansion or were in urgent need of talents, more attractive pay rises would be offered as a basic measure on staff retention,” commented Mr Lawrence Hung, Chairperson of the Remuneration Committee of the HKIHRM.



Comparison between Original and Latest Forecasted Base Pay Adjustment

45 participating companies responded to the question on whether they had revised their base pay adjustment forecast in 2012. Nearly half of the respondents (44.4%) kept their original forecast. Some 20% raised their forecast while another 20% lowered their forecast.




Reasons for Revising Base Pay Adjustment Forecast

The top three reasons for making a change in the base pay adjustment forecast are market pay adjustments (52.6%), worldwide economic downturn (42.1%), and uncertainties and risks in the business environment (36.8%).



“Lingering concerns over an uncertain economic outlook continue to be challenges for employers when making pay adjustment decision. Facing with a dilemma of a prudent manpower cost control and the need to attract, retain and engage talents in order to remain competitive, employers should pay attention to enhance or build robust HR policies and systems which incorporate other measures, such as, performance-based bonuses, career development opportunities, training programmes and work-life balance arrangements rather than focus on pay element,” concluded Mr Hung.


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[Please click here to download data charts]




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 more than 4,700 members, with 550 of whom being 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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