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Hong Kong employees to receive among the lowest salary increases in Asia next year

  • Hong Kong professionals expected to receive 1.8% real-terms salary increase in 2018, down from 2% in 2017
  • Higher inflation to reduce real-terms pay awards
  • India to see highest real wage increase in the region for second year running
  • Real salary increases in Asia-Pacific to continue to lead the world in 2018, filling eight of the top ten positions in the global rankings

According to the latest Salary Trends survey by ECA International (ECA), Hong Kongers will see their salaries increase by 4 percent in 2018, for the third year in a row. After inflation, predicted to be 2.2 percent next year, employees are expected to see a real salary increase of 1.8 percent in 20181. This keeps Hong Kong near the bottom of the salary increase table in Asia, ranking 16th out of 20 countries surveyed in the region.

Although the real salary increases we expect to see next year are low compared to the rest of the region, on a global scale, salaries in Hong Kong are still rising relatively fast. In addition, the increases are also respectable compared with other developed economies. This reflects the need for companies to continue to use pay increases as a means of attracting and retaining staff in the city.

- Lee Quane, Regional Director - Asia at ECA International

ECA is the world’s leading provider of information, software and expertise for the management and assignment of employees around the world. ECA's Salary Trends Reports analyse current and projected salary increases for local employees in 72 countries across the world.

Greater China

Despite slower economic growth recently, companies are expected to provide staff with an average salary increase of 6 percent in mainland China next year. Relatively low inflation will mean that mainland China will once again be among the ten countries with the highest real rates of increase in 2018.

“A forecast average rate of increase in China of 6 percent is higher than the 5.5 percent awarded on average in 2017,” continued Quane. “This points to improved business sentiment in China, which perhaps shows that employers are more positive for the prospects of both the domestic and global economy in 2018.”

Increases for employees in Macau in 2018 are expected to match those in Hong Kong, with real rates of increase of 1.8 percent. Lower rates of inflation in Taiwan relative to Hong Kong and Macau mean that salaries will grow by 2.6 percent in real terms, despite the same nominal increase being forecast.

Asia-Pacific highlights

Asia-Pacific countries continue to outperform the rest of the world, occupying eight of the top ten spots in the global rankings of real salary increases with all locations expecting to receive above-inflation salary increases. India is expected to keep the regional top spot in 2018, with a real rate of increase of 4.9 percent predicted. India will be joined within the global top ten in terms of real salary increases by fellow sub-continent nations of Pakistan and Bangladesh along with ASEAN nations of Vietnam, Indonesia, Thailand and Cambodia as well as China.

Singaporeans are expected to see a real salary increase of 2.7 percent in 2018, keeping Singapore ahead of Hong Kong once again, ranking 9th out of 20 countries surveyed in the region. 

Employees in Japan will receive the lowest rate of increase in nominal terms in 2018, with companies forecasting salaries to increase by 2.2 percent. However, in real terms, Australians will see the lowest increase in their earnings in 2018, with real wages expected to rise by only 0.8 percent.

Global markets

Although there is improved growth in some major European economies, expected real salary increases remain low. Real wage growth in Germany and France is expected to be 1.2 percent and 0.9 percent respectively. The UK will see the lowest rate of real wage growth in the region, with incomes expected to increase by 0.2% in real terms. 

Russia is forecast to move to the top of the European rankings in 2018. As its economy stabilises and inflation falls, employees in Russia are set to receive a 3.1 percent real salary increase next year.
The global top spot for real salary increases is taken by Argentina, which is forecast to receive an impressive 7.2 percent real salary increase in 2018. 

Quane added, “President Macri’s market-friendly policies are expected to bear fruit in Argentina next year, causing inflation to cool and bringing respite to hard-pressed workers after years of low or negative real salary increases. As a result, Argentina has jumped 22 places in the 2018 global rankings, topping the chart for the highest real salary increase in the world.”

In the Americas, average real salary increases are predicted to be 1.6 percent. Employees in Mexico in particular look set to benefit from lower inflation in 2018 to record a real-terms increase of 0.8 percent. Uplifts for the USA and Canada are set to remain steady, at 0.9 and 1.1 percent respectively.

Despite both expecting to see 10 percent nominal salary increases next year, Egypt and Nigeria find themselves at the bottom of the global rankings thanks to high inflation, which will likely far outweigh pay rises and cause real decreases of 11.2 and 4.8 percent respectively. Lower inflation in Ghana will help the country to leap 51 places globally and top the regional rankings for Africa and Middle East, with employees predicted to enjoy a 4.7 percent real pay hike.

The imminent introduction of VAT in the countries of the Gulf Cooperation Council has raised inflation forecasts. Saudi Arabia and Qatar are particularly affected with both anticipated to experience real salary decreases as a result, dropping from among the highest ranked nations in the region in 2017 to the lowest in 2018.

1 The real salary increase is calculated based on the difference between the forecast nominal salary increase and inflation. Forecast inflation rates are based on information from the International Monetary Fund.

Asia Pacific regional rankings for nominal & real wage increases (with global rankings)
 
Asia Pacific rank 2018
Global rank 2018
Countries
Real wage increase
Nominal salary increase
Real wage increase
Nominal salary increase
India
1
1
2
6
Vietnam
2
3
4
8
Indonesia
3
4
4
9
Thailand
4
12
6
24
China
5
9
7
20
Pakistan
6
5
8
7
Bangladesh
7
2
8
10
Cambodia
8
8
10
15
Philippines
9
9
12
20
Singapore
9
14
14
33
Taiwan
11
14
15
29
Korea Republic
12
13
15
33
Sri Lanka
13
7
17
14
Malaysia
14
11
20
23
Myanmar
15
6
23
12
Macau
16
14
25
33
Hong Kong
16
14
25
33
Japan
18
20
28
65
New Zealand
19
18
45
46
Australia
20
18
53
46

 

Global top 20 - Real wage increase forecast rankings
 
Global Rank
Countries
Real wage increase 2018
Nominal salary increase 2018
Argentina
1
1
India
2
6
Ghana
3
2
Indonesia
4
9
Vietnam
4
8
Thailand
6
24
China
7
20
Bangladesh
8
7
Pakistan
8
10
Cambodia
10
15
Russia
11
15
Brazil
12
15
Philippines
12
20
Singapore
14
33
Korea Republic
15
29
Taiwan
15
33
Sri Lanka
17
14
Israel
18
46
Morocco
19
33
Bulgaria
20
42
Malaysia
20
23

-Ends-

Notes to Editors

About ECA's Salary Trends Survey

The information above was taken from ECA's Salary Trends Survey 2017/2018. The survey reports current-year salary increases for local national employees and the anticipated increases for reviews in the forthcoming year. It is based on information collected from 260 multinational companies for 72 countries. Reports are available free to all participants or for purchase either as a set or individually per country for non-participants from the ECA website. Further information regarding ECA surveys can also be found on the website.

Data is based on increases including merit. Including merit is the total salary increase and represents general cost of living/inflationary increases plus performance/merit related increases. The data above was collected from August to September 2017. The survey included data from all seniorities across the following industry groups which included Energy, mining & petrochemicals; Chemical & pharmaceutical; Transport & logistics; Manufacturing & consumer goods; Legal & professional services; Engineering & technology; Retail, leisure & other services; Financial services; Non-profit.

For further press information, please contact:

Silvia Wu
LEWIS
Tel +852 3944 5015
silvia.wu@teamlewis.com

Lee Quane
Regional Director – Asia
ECA International
Tel: +852 2121 2388
lee.quane@eca-international.com

Follow ECA on twitter: @ECAintl

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