In the past few years, Hong Kong has experienced a long period of economic stagnation due to a combination of factors such as the US-China trade war, the 2019-2020 social unrest, and the Covid-19 pandemic. This has caused companies to tighten their belts, leading to many layoffs and salary freezes over the past few years. However, as the economy starts to recover, many companies are now looking ahead to 2023 and planning for salary increases.
In general, salary increments in 2023 are expected to be higher than in previous years. According to a survey conducted by the Hong Kong Institute of Human Resource Management, the average salary increment across all industries in 2023 is expected to be around 3.5%. This is significantly higher than the average salary increase of 1.4% reported in 2020.
According to a survey conducted by Mercer, the industries expected to see the highest salary increments in 2023 are financial services, energy, and professional (non-financial) services. This may be due to the fact that these industries are expected to benefit the most from the economic recovery.
In addition, sectors such as High Tech and Life Sciences are also expected to see a promising salary increase in 2023. This is due to the increasing demand for technology professionals while companies are maintaining their momentum in a strong business environment. However, the retail and logistics sectors are expected to take a longer time to recover due in 2023 due to the impact it’s taken in the previous years.
Overall, the challenge in 2023 will remain to be the attraction and retention of talents. With an average turnover rate of 10.5% mid of last year combined with a shrinking workforce (-1.6% in 2022), companies will be fighting for their talents on every front. It eventually comes down to not only salaries or fringe benefits that companies offer, but the long-term career prospects, growth opportunities, and overall employer stories that can win talents over in this candidate-short market.