59.7% of respondents expected to receive both salary increments and annual bonuses, according to Ambition’s Job Market Trends and Salaries Report for 2010, focusing on business performance and market outlook, hiring trends and compensation and benefits.
Significant findings:
- Business performance – 37% of respondents said their business performance in Q3 2009 was better than expected;
- Market outlook – 64.7% of respondents expected business growth for 2010;
- Hiring trends – the top four hiring challenges were budget constraints, obtaining headcount approval, the uncertainty of the business outlook and a lack of qualified candidates;
- Contracting staff – 39.5% of respondents expected to use contracting/ temporary staff in the next twelve months;
Salary increments & annual bonuses
Just under 60% of respondents expected salary increments for 2010. Most respondents (49.3%) expected the average salary increase would be 1% to 3%. The annual bonus figures were likely to be about 5% to 10% of their annual salary according to 27.7% of respondents.
Business performance better than expected
In Hong Kong, 37% of respondents commented that their businesses performed at a better than expected level in Q3. This was up from 21% in Q1 2009. “The banking & financial services sector has rebounded quickly from the financial crisis that hit them so severely in late 2008. Their improvement has been steady this year and this is a good leading indicator for other sectors as confidence permeates through the markets.” Commented Andrea Williams, Managing Director, Hong Kong, Ambition, commented, adding: “The fundamentals of the economy are improving in Hong Kong and business performance will determine the hiring plans of most companies. The banking and financial services, FMCG and property/ real estate sectors were most buoyant in Q3 according to our survey.”
Market Outlook
64.7% of respondents expected growth in 2010 and only 3% anticipated their businesses would contract. These results are far more positive than those at the end of Q1 2009. The banking and financial services sector was among the most confident and it was pleasing to see the media/agency sector was expecting things to get better into 2010. Williams remarked, “We found that there was considerably more optimism in the recruitment market as compared to Q1. Sentiment has therefore bottomed out and companies are now looking to their people strategies in order to capitalise on future growth. However, over-hiring is unlikely to happen and it will take some time to return to the hiring levels of 2007.”
Whilst 11.5% of respondents had no solid plans to increase headcount, all others were positive that their staff numbers will grow in 2010. It was not surprising to see that 61% of respondents believed headcount growth would be seen in the sales and business development functions as companies would invest more in direct revenue producing roles.
Hiring challenges
Over the next twelve months, the top four hiring challenges that companies expected to face were budget constraints, obtaining headcount approval, uncertainty in the business outlook and the lack of qualified candidates.
Williams added, “employers are once again concerned with the lack of qualified and suitably experienced candidates in the local market. We feel that this will become a real problem as we move through 2010.”
Hiring trends
Despite a challenging year for recruitment, there has been a surprising amount of activity taking place, but most of this has been on a replacement basis. In late 2008 and early 2009, there had been a great deal of headcount reduction and restructuring, so companies needed to re-hire to cope with the increase in business volumes.
Hiring overseas candidates & contracting staff
In Q1 2009, only 59% of respondents would have considered hiring from an overseas market. As the year has progressed now 71.6% of respondents are open to overseas candidates. According to 28.4% of respondents who would not consider hiring from overseas, the main reason was that many roles required local language skills and experience in order for employees to be most effective, especially in Hong Kong where the China market in a major focus. For junior roles, Hong Kong candidates are still the first priority for employers as they have a good understanding of local markets and a strong grasp on cultural expectations.
Contracting remains a popular alternative to permanent staff and can reduce fixed costs when budgets are tight. Due to a lack of familiarity with the contracting recruitment process and its benefits, 36.5% of respondents were reluctant to look at the contracting option. However, those who had successfully used contracting recruitment in the past were almost always likely to do so again. In addition, the trend for hiring contracting/ temporary staff remains similar to the trend results we obtained in Q1 2009. 39.5% of respondents would consider hiring contracting/temporary staff and 24% said they planned to maintain their current headcount numbers.
Salary & annual bonus
59.7% of respondents believed that their companies will give salary increments for 2010 along with an annual bonus for 2009. In the Q1 survey, nearly 60% of respondents did not get salary increases for 2009, so this reverse in the trend is a healthy turnaround. In addition, 49.3% expected that the average salary increment would be 1% to 3% and 11.9% of respondents expected it to be 4% to 6%.
For annual bonus figures, 27.7% said it was likely to be approximately 5% to 10% of their annual salary and 12.2% expected the bonus would be 11% to 15%.
“We will undoubtedly see more movement in the market after the annual bonus payout periods around Chinese New Year. It is becoming more evident that employer and employee expectations around bonus levels are not aligned which will result in some dissatisfied people. Therefore, our advice is to reward your very best people appropriately because replacing them will be a difficult and expensive exercise,” Williams said.
Benefits
According to the survey findings, the most popular benefit other than annual bonuses is staff training (65.8%), closely followed by extra MPF contributions (41.4%) and education subsidies (39.6%). Housing allowances have generally become less common as most companies try to localise their expatriate costs as much as possible.
Williams commented, “It is more important for employers to differentiate themselves and have the right talent in place during the downturn to prepare for generating more revenue in the next inevitable upturn. Every company wants to attract top talent and with the right range of employee benefits, the opportunities to recruit these individuals increases.”
Paul Arkwright
Publisher
