sources: KPMG
25 April 2022, Hong Kong — KPMG China’s latest Hong Kong Executive Salary Outlook 2022 reveals that executives across all sectors expect an increase in headcount, while bonus payments are seen rebounding and salary expectations rising from 2021 amid the improving economy. It also found that competition for talent remains high, compelling employers to look for creative ways to attract and retain workers. The outlook was derived from an online survey commissioned by KPMG. A total of 794 executives took part in the exercise conducted by YouGov between January 3-16.
Murray Sarelius, Head of People Services, KPMG China, says: The executive outlook in early 2022 was very promising when the survey was taken. Despite the short-term impact of the fifth wave of the pandemic in Hong Kong, recently announced relaxations will hopefully spark a return of the optimism in line with the survey.
Optimistic headcount expectations in 2022 Overall, more than a third of the respondents (35%) spanning across all sectors represented in the survey expect to increase hiring at their Hong Kong operations this year, the survey found. Compared to the impact of COVID-19 and reduced economic activity seen in the preceding two years, the overall headcount expectation has strengthened considerably with a 21% improvement in the net proportion of respondents anticipating an increase in headcount this year (net 25% increase in 2022 versus a net 4% increase in 2021).
Across both C-level executives and human resources professionals, the prevailing view is that revenue generators, such as sales staff, fee earners and client relationship managers, will be the main area of focus for new hirings, followed by operations and IT. In terms of sectors, professional services (44%) and financial services (39%) are the most eager to increase headcount, the survey found, reflecting increased demand as businesses tackle new regulatory measures, focus on ESG initiatives and a tight employment market. Respondents consistently rated salary and compensation package (71%), career progression and promotion (48%) and organisational culture (44%) as the primary motivations to seek a new job opportunity. The financial services sector offers the most diversified benefits packages to its employees, the survey found. Positive outlook on salary and bonus in 2022 Job market sentiment has bounced back as sentiment has turned positive compared to 2020 and 2021. Career moves returned during 2021, as 27% of respondents changed their jobs, compared with 18% in 2020 and 29% in 2019. Particularly high turnover was seen at the assistant manager or below level (44%). This is a sharp increase from 12% in 2020 and even higher than the pre-pandemic level of 34% seen in 2019. Among those who changed jobs last year, about a third of respondents (36%) secured a salary increase of more than 20% salary while 19% secured a 30% or higher raise.
In terms of the salary review with an existing employer, 50% of the respondents received a pay rise in 2021, while only 40% of respondents got a salary increase following a review in the previous year. Overall, 19% of respondents received a 3 to 5% raise while 20% got a raise of 6% or more. In 2021, increments were highest in the financial services and professional services sectors with 25% and 30%, respectively, receiving a pay rise of 10% or more in 2021.
Annual bonus payments were more generous in 2021. Nearly 70% of respondents were awarded a bonus payment last year, with 50% receiving a bonus payment equivalent to more than one month’s salary. The overall average bonus paid rose from 1.83 months in 2020 to 2.21 months last year, which is close to the pre-pandemic level of 2.23 months, the survey found.
KPMG China expects a competitive and fluid employment market in 2022 as employer’s headcount ambitions combine with respondents’ optimism about their salaries increasing if changing jobs, with 51% expecting to get a 20%+ salary increment, while 19% expect their salary to improve by 30% or more. In 2021, only 35% of respondents expected to get a 20%+ increase after a job change. The survey also foreshadows wage inflation in 2022 with 66% of respondents anticipating a rise in wages for their upcoming pay review, significantly higher than the 43% seen in January 2021. Meanwhile, 48% of respondents predict an improvement in bonus payment, much higher than the 29% seen in 2021.
Michelle Hui, Director, Executive Search and Recruitment, KPMG China, says: With high demand from employers and high expectations among candidates, the competition for talent will drive innovation and force employers to look at alternative ways of recruiting and retaining talent. Meanwhile, the survey results suggest that an increasing number of employees are looking for a more agile and flexible working environment, which is a key to attracting and retaining talent.
Willingness to relocate from Hong Kong to other GBA cities reached 72% in 2022 Underlining the opportunities created by initiatives taken by nine Mainland cities in the Greater Bay Area (GBA), the survey finds that more respondents are willing to relocate to other GBA cities for work, with seven in ten (72%) expressing their willingness to relocate from Hong Kong to other GBA cities.
David Siew, Partner, People Services, KPMG China, says: Among the top motivations for relocating from Hong Kong to other GBA cities, better career prospects and travel convenience remain the top two drivers for such a move, while higher income has moved up the ranking, displacing broader work exposure as the third biggest motivation to relocate. Despite respondents having an expectation of receiving a higher income or at least maintaining their current net income level upon relocation with the GBA, only a relatively small proportion are aware of and have applied for GBA income tax subsidies.
For the fourth year in a row, the innovation and technology, financial services and professional services sectors are believed to create the most job opportunities in terms of developing the GBA, which also include Hong Kong and Macau.
Full Report: https://home.kpmg/cn/en/home/insights/2022/04/hong-kong-executive-salary-outlook-2022.html
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