eNewsletter

Since July 2009, the average salary increases in Hong Kong have not been high enough to counter inflation. For 2011, this trend is expected to continue.

Throughout the rest of this year, Hong Kong’s average salaries are projected to rise from 2010’s 3% to approximately 4%. However, the inflation rate is estimated to grow to 5%. This figure is also twice as large as Hong Kong’s 2.5% inflation rate from 2010.

Some of Hong Kong’s most important industries, such as healthcare and technology, are expected to display salary increases. Nevertheless, the salary increases are still likely to fall below inflation. In particular, the engineering sector may suffer the most as the salary increases will be nominal at approximately 2.5% for 2011.

The primary effect of this trend is that employers in Hong Kong will likely feel pressured to raise salaries to satisfy their essential employees. Surveys have shown that year-end bonuses and lunar new year bonuses are also increasing, so employers should also seek to match employees’ expectations whenever possible.