Further evidence is growing that Hong Kong's labour market, including the banking and financial service field, has been squeezed by people choosing to quit the jurisdiction, leaving a smaller talent pool, and hence causing a rise in bonuses and salaries – at least for now.

Stories about how Hong Kong’s zero-Covid policy has helped drive out bankers – and created a premium on those who choose to stay – continue. A global recruitment firm says salaries for employees in Hong Kong are likely to rise this year.

While not specific to financial services, the survey by Hays finds that 41 per cent of employers surveyed reported plans to increase salaries by up to 3 per cent, while 25 per cent said they intended to increase salaries by 3 to 6 per cent. Only 24 per cent said they expect salaries to remain the same, which is lower than the 32 per cent reported for the previous year. Sixty-five per cent of employers also indicated plans to give bonuses in 2022, compared with 54 per cent in 2021.

In all, Hays collected data and surveyed skilled professionals across China, Hong Kong SAR, Japan, Malaysia, and Singapore. The firm collected more than 9,500 responses between October to November 2021, from which it produced a 167-page study of remuneration and employment trends. Within Hong Kong, Hays polled 1,120 people.

“The shrinking talent pool in Hong Kong is amplifying the competition for high-calibre candidates. As a result, employers have had to bump up salaries above market rate in order to secure the candidates they want,” Sue Wei, managing director, Hays Hong Kong SAR, said. 

Employee data from the survey shows that the salary package has become a much higher priority for jobseekers. Some 81 per cent said that the search for a better salary package was their top motivator for finding a new job. Last year, this figure was 64 per cent. Satisfaction with their salary package was also one of the top reasons why people chose to stay at their job. 

Yet, there is a distinct gap between the salary increase expectations of employers and employees. Twelve per cent of employees expect their salaries to increase by 6 to 10 per cent and 20 per cent expect increments of 10 per cent and above. 

“Failure to manage this gap could be detrimental for companies looking to attract and keep talent in the business, especially given how the competitive the talent market will be in the coming months. With 45 per cent of employers planning to increase their permanent headcount, it is imperative to adjust compensation structures to reflect what’s important to candidates.” 

In late March, Bloomberg reported that finance workers in the city would usually obtain a 15 per cent pay rise when moving to a new employer, but now such a rise is more likely to be between 20 to 30 per cent, the news organisation quoted a headhunter as saying. An outflow of bankers, particularly Westerners, from Hong Kong means that those who remain have more labour market leverage.

WealthBriefingAsia has heard from industry sources that many Western bankers who had moved out to Hong Kong in recent years were waiting for the late winter/spring bonus season before heading back home. Besides the strict measures against the pandemic – still in force with some relaxations – the mainland’s national security law of 2020 and unrest in Hong Kong has taken some shine off its image. 

More positively, the introduction last year of the Wealth Connect regime, tightening the financial links between Hong Kong, mainland China and Macao, is seen as a boon for Hong Kong. And the Hong Kong stock market is still one of the world’s busiest.