HK salary freezes push overseas work migration

Chilly time for Hong Kong salaries...

• Average salary adjustment +0.4% increment (lowest since 2008)
• Half of workers pessimistic about employment outlook
• 3-5 years’ work experience is the golden period for switching job functions (69% reported a pay rise)
• 49% of employees open to working outside Hong Kong
• 23% considering migrating in the future

The prolonged pandemic has had both macro and societal impacts on the overall employment outlook in Hong Kong. The Salary Survey 2021, recently commissioned by JobsDB, shows a downward trend continuing from 2020. On average, there was a mere +0.4% salary increment, the lowest increase recorded since the Salary Survey 2008. 34% of respondents said they had received a pay rise, and 34% did not receive a bonus or double pay (8% YOY increase). About half of employees hold a negative view of the employment outlook, reflecting a decrease from 2020 levels. The Survey, which covers almost 4.300 employees, also indicates that respondents aged 30 or below were less impacted by the macro and societal factors, such as market fluctuations caused by the global pandemic.

Biggest increments for Digital Marketing, E-Commerce and Social Media

Different job functions and industries have been impacted to differing degrees. The Survey reveals that only 34% of full-time employees received a pay rise in the past year, which is 16% less than 2020. 55% of respondents reported a salary freeze, a 15% increase compared to last year, and 11% reported salary reduction, comparable to last year’s 10%.

Three job functions saw higher percentage pay cuts, with -8% for ‘Hospitality/ Tourism’, -6.4% for ‘Retail Sales’, and -4% for ‘Food and Beverage’. However, there was some positive movement in salaries in the digital marketing and e-commerce space. The highest monthly salary increments were in ‘Digital Marketing, E-Commerce and Social Media’ roles at +3.8%, ‘Legal/ Compliance’ at +3.3% and ‘Media and Advertising’ at +3%.

 3-5 years’ work experience golden time for job switches

Employees hold more conservative attitudes on changing employers due to global economic factors. In the past 12 months, 24% of respondents changed employers or jobs functions. 60% of them took their own initiative to make the change, while 73% resigned after getting an offer. 11% of respondents changed job functions completely, including employees working in ‘Security/Fire/Electronic Access Controls’ (28%), ‘Government & Public Organisations’ (16%), ‘Education and Training’ (12%).

The three main reasons for changing job functions include:

1. Original job function job opportunities contracted sharply due to COVID 19 (24%)
2. Attracted by other job function with better career prospects/higher pay (18%)
3. Original job function/nature is in a declining field with no career prospects (12%)

The changing of job functions did not necessarily lead to a decrease in salary. The Survey found that employees with 3-5 years (69%) and 6-10 years (65%) of work experience, recorded salary increments after switching job functions. Whereas 61% of respondents with 10 years or more work experience reported pay cuts.

Isaac Shao, Chief Executive Officer, JobsDB Hong Kong, said, “After a tumultuous year, there have been some revealing employment trends in 2021. The majority of surveyed employees resigned after getting an offer. Compared to pre-COVID-19 Survey data of 36% resigned before getting a job offer in 2019, we can conclude that employees hold a conservative attitude towards the employment outlook. Additionally, JobsDB data shows that the number of job advertisements in 2020/2021 dropped by 26% over last year, especially in Tourism, Retail Sales, Food and Beverage and Customer Service roles—compelling employees from these industries to change job functions entirely.”

Restructuring & digital transformation bring job insecurities

Even as the economic environment recovers, 52% of respondents still hold a negative view of their employment outlook. However, this is a substantial reduction from last year’s 75%. Respondents’ views have become more neutral (39%). Concerning their current job security, 54% feel a sense of job security. The reasons that some employees feel insecure are ‘Company restructuring makes own position/ department redundant’ (28%), and ‘ the need to acquire new skills with digital transformation / technological advancement of own industry’ (22%). To cope with job security concerns, employees tried to ‘adjust mindset and face the challenges with a positive attitude’ (40%) and ‘acquire new skills and equip for different roles’ (33%), and ‘attend training/ exam, to attain qualifications/ licenses for other job functions’ (30%).

Shao suggested, “Based on the result of Salary Survey 2021, the keyword for the employment market this year is ‘Transformation’. 34% of respondents have plans for a change of employer in the coming three months, including 11% planning for a switch in job function or industry. For all these job seekers, we expect ‘T-shaped talent skills'—those with deep professional knowledge in a specific field and a cross-field understanding will be the most desirable in the market. Employees should always equip themselves to keep up with the competition. For instance, there are numerous online courses with certificates now that can help self-enhancement and strengthen employee resumes.”

Half considering work migration, UK first choice for under 30s

Despite COVID-19, numerous employees still plan to work outside Hong Kong. 49% of respondents are open to working outside Hong Kong this year, 4% higher than last year. Around a quarter of them are considering permanent migration. The top three non-work-related triggers are to ‘‘Gain exposure and broaden horizon’ (55%), ‘lack of confidence in Hong Kong’s economy’ (36%), and ‘Aspire to live in other countries’ (28%).

Work-related triggers include ‘overseas working experience is valuable for personal and career development’ (43%) and to ‘get a higher salary for the same position’ (36%). The Survey also found that young respondents aged 25or below report a higher inclination (54%) to work outside Hong Kong or migrate. In comparison, older respondents are less inclined to work outside Hong Kong or migrate (Aged 46-50: 41%, Aged above 50: 43%). For the preferred destinations, more respondents aged below 30 would like to work in the United Kingdom, whereas Australia is the top choice for those aged 31-45, and for those aged above 45, China is the top choice.

Average 2021 salary adjustments