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Hong Kong salary increases continue to be among the lowest in Asia

  • The average salary increase in Hong Kong is forecast to be only 1.9% above inflation in 2019
  • Singapore and China will both see higher salary increases than Hong Kong next year
  • The average real salary increase in Asia-Pacific is forecast to be 2.7%, higher than any other region
  • India leads the way with an average forecast real salary increase of over 5%

According to the latest Salary Trends survey by ECA International (ECA), Hong Kong workers in the private sector will see their salaries increase by 4 percent in 2019 for the fourth year in a row. However, after inflation, predicted to be 2.1 percent next year, employees are expected to see a real salary increase of 1.9 percent in 2019. This keeps Hong Kong near the bottom of the table for real salary increases in the APAC region, ranking 15th out of 20 countries surveyed in the region.

Lee Quane, Regional Director - Asia at ECA International, said “Salaries will increase at a rate of 4% in Hong Kong next year, which is in line with last year and comparable to similar economies in the region. Once expected inflation is taken into consideration, real incomes will increase at a rate of 1.9%, which is higher than the 1.7% rate of increase in real incomes witnessed in 2018. While the forecast rate of increase in salaries in Hong Kong is lower than the average for the Asia-pacific region, it compares favourably to other advanced APAC economies such as Australia and Japan. This is because as one of the most well-established economies in the region, salaries in Hong Kong are already substantially higher than most in the region and therefore do not increase as dramatically as many of the emerging Asian economies that are above them in the survey.”

ECA International is the world’s leading provider of information, software and expertise for the management and assignment of employees around the world. The annual Salary Trends Report analyses current and projected salary increases for local employees in 69 countries across the world.

Asian nations lead the way, as employees in India set to receive highest pay increase in the world

Asian nations once again dominate the global top twenty highest real wage increases. 14 of the top 20, and all but one of the top ten, are Asian countries.

Quane said “The average real salary increase in the APAC region is predicted to be 2.7 percent in 2019 – over double the global average of 1.2 percent. Low inflation and rising productivity mean that many Asian economies, and therefore local salaries, are growing rapidly.” 

India tops the rankings for 2019, where employees are forecast to receive a 5.1 percent real salary increase, over double the rate of increase employees in Hong Kong will experience. Similarly, workers in other Asian countries with rapidly growing economies, such as Vietnam and Thailand, will see major increases to their average salary too and join India towards the top of the global rankings.

Elsewhere in Asia, Singapore performed similarly to Hong Kong. Singaporeans will receive an average real salary increase of 2.6 percent in 2019, ranking 11th out of the 20 APAC countries surveyed. This is higher than the real rate of increase that Hong Kong workers will receive in 2019 but lower than the 2.9% real increases that workers in Singapore saw in 2018. 

Quane said “Workers in Singapore are expected to receive a nominal salary increase of 3.9 percent – slightly lower than their counterparts in Hong Kong. However, due to a lower level of inflation expected in Singapore in 2019, the real salary increase will be 0.7 percent higher than Hong Kong at 2.6 percent.” 

In greater China, mainland China will lead the way with real salaries increasing at the fastest rate in 2019, followed by Taiwan. Meanwhile, Hong Kongers will be able to take some solace in the fact that in real terms, salaries of employees in Macau will increase at the slowest rate in the greater China region.

Quane added “Workers in mainland China are set to continue to see their salaries increase at the fastest rate in the greater China region, both in nominal terms and real terms with the pay of workers based in Shenzhen likely to increase at the fastest rate. Furthermore, employers in mainland China seem to be more positive on the economic outlook with companies forecasting an increase in salaries in nominal terms of 6.5% in 2019 versus 6.0% in 2018. This compares favourably to the rest of the APAC region where the overall average nominal salary increase is set to remain at 5.5 percent - the same as it did in 2018.” 

High inflation continues to suppress pay increases in Africa, Middle Eastern outlook is mixed 

Although employers in Egypt, Nigeria and Turkey are expected to offer among the highest nominal pay increases next year, high levels of inflation mean employees in each of these countries will likely receive real pay decreases of 1 percent, 3.2 percent and 6.7 percent respectively. 

However, workers in Saudi Arabia and United Arab Emirates are expected to see a boost in 2019 compared to this past year as inflation in most parts of the Middle East looks set to ease. 

Quane said “The real salaries in Saudi Arabia and the UAE look set to increase to 2.0 percent and 2.1 percent respectively after a disappointing 2018 which only saw minimal real-terms salary rises for each. This is a result of inflation easing after a short-lived spike last year following the introduction of a 5 percent VAT in January 2018.”

Positive signs of growth in Europe 

The average real salary increase across Europe is expected to be 0.8 percent, unchanged from 2018, while inflation in Europe is forecast to be the lowest in the world next year at 1.8 percent on average.

In the UK, employees are also expected to see a real salary increase of 0.8 percent in 2019. A significant factor which could impact these figures however, is the UK’s impending withdrawal from the EU.

Quane explained “It is still very unclear what impact Brexit could have on inflation and salaries in the UK. Any deal that is made, or lack of it, could have far reaching implications on wage and price rises and these figures could change significantly depending on what happens between now and the official withdrawal date in March 2019.”

Argentina bottom of the table as economic woes continue

Argentina sits at the bottom of ECA’s table, with the forecast predicting a -8.7 percent decrease in the average real salary. This comes off the back of a -11.6 percent decrease in real salaries in 2018.

Quane said “The bad news continues for workers in Argentina with another decrease in their real wages predicted for the coming year. The economic policies of President Macri, that were designed to reverse years of economic turmoil, have failed - resulting in an International Monetary Fund (IMF) bailout of over USD 56bn. With inflation set to remain sky-high at 31.7 percent, far outstripping salary increases, another decrease in Argentinian real salaries now looks inevitable.” 

Top ten forecasted real salary increases - Global
Countries
Global ranking
Real salary increase 2019 (%)
India
1
5.1
Vietnam
2
4.9
Indonesia
3
4.2
China
4
4.1
Thailand
4
4.1
Bangladesh
6
3.9
Cambodia
7
3.4
Sri Lanka
8
3.2
Korea Republic
9
2.7
Malaysia
9
2.7
Ukraine
9
2.7

-ENDS-

Notes to Editors

About ECA’s Salary Trends Survey

The information above was taken from ECA's Salary Trends Survey 2018/2019. 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 289 multinational companies for 69 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.

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 2018. 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.

About ECA International 

ECA International is the market-leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.

Partnering with thousands of clients on every continent, we provide a fully-integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.

We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions - every time.

ECA International: Mobility solutions for a world that’s constantly moving.

For further information, please contact:

Jack Firth 
Tel: +44 0 20 7351 5000
Email: Jack.Firth@eca-international.com 

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