Pay raises to get scaled back as tsunami lingers
Updated: 2008-11-07 07:33
By Joseph Li(HK Edition)
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Most employees in the city will face smaller pay raises, or none at all, next year after enjoying a substantial 3.9 percent average salary increase this year, a recent survey has found.
At the beginning of 2008, pay increases, on average, reached a 10-year high, according to the Hong Kong Institute of Human Resource Management. Yet, due to the financial tsunami that broke out in mid-September, many enterprises indicate that they will have to reconsider their pay-increase packages, and some have shelved their recruitment plans for next year.
The institute obtained pay-raise information for earlier this year from 100 enterprises, spanning 16 sectors, with about 120,000 people in their employ.
As surveyed, the average pay increase was 3.9 percent - higher than the 2.8 percent last year, and also the highest since 1999.
Lai Kam-tong, co-chairman of the Institute's remuneration committee, said at a press conference yesterday: "The institute is happy to see that employers were still willing to share the fruits of their business growth with their staff, despite high inflation".
However, the financial tsunami has changed the good prospects for 2009. According to the latest data obtained last month from 89 enterprises that usually adjust salaries between January and April, 54 percent could not provide any information for 2009. Of the 41 companies that did, 37 said they plan to award pay hikes of about 3.5 percent next year, three said they will freeze salaries for all staff and one expects to cut salaries.
Lai further quoted the result of an instant poll of more than 100 human resource personnel at a seminar yesterday.
As surveyed, 87 percent said their companies were adversely affected by the financial tsunami. Only 39 percent have allocated a budget for salary increases next year, but they said they may need to reconsider the plans.
The impact of the financial tsunami is more immense and far reaching than that of 2003, and no one knows when the situation will bottom out, Lai commented.
But he called on enterprises to communicate restructuring plans with their staffs, as well as adjust job duties to enhance productivity. Laying people off, he said, should obviously be a last resort.
(HK Edition 11/07/2008 page1)