New findings from the quarterly Classified Post Pay and Job Mobility Survey suggest a notable decline in the level of pay increase being sought by local employees.
Polled in November of last year, fourth quarter (Q4) respondents were markedly more conservative in their pay-rise expectations, relative to those in the preceding quarter (Q3).
Of the 2,200 individuals surveyed, 53.5 per cent said they were unlikely to see a salary-increase of more than 5 per cent. This was markedly up over the previous quarter, where the bottom bracket accounted for just 49 per cent of respondents.
Given the average rate of inflation for the year - 5 per cent, according to the Census and Statistics Bureau - the expectations appear to be relatively modest, reflecting a better sense of awareness about business conditions, explains Matthew Bennett, managing director for Robert Walters Hong Kong.
"It's obviously an unstable economy, and the current crisis is having much more of an effect on Asia than the [2007-2009] credit crisis did," he says.
"Companies have been aggressively communicating this to their staff for the past six months. As a result, employee expectations seem to have changed," Bennett concludes.
James Carss, general manager for Hudson Hong Kong, concurs. "Employees here are quite perceptive - they follow the news and they know what's going on in their own industries." he says. "As such, they realise that things are quite tough at the moment."
Bucking the trend, respondents earning monthly salaries of HK$20,000 or less had a surprisingly rosier outlook about their earning potential. The proportion of from this group reporting pay-rise expectations of 5 per cent or less saw a quarter-on-quarter decline, while the number of those looking for increases of 6 per cent to 10 per cent, and 21 per cent to 30 per cent crept up.
Both Bennett and Carss agree that the dissonance in perspective on salary expecations is likely related to the smaller dollar amounts involved, as well as a more pronounced inflationary impact.
"The difference between 5 per cent and 10 per cent on a HK$20,000 dollar salary is quite minimal," says Bennett. "Also, the smaller the salary, the greater the impact inflation has on living standards. So with increases in consumer prices at 5 per cent for 2011 and projected to remain at 3.5 per cent to 4 per cent in 2012, it seems an increase of 6 per cent or above could be necessary."
Despite this, the Robert Walters director concedes that such expectations, while seemingly reasonable, may be overly optimistic in the current climate. "Most companies are looking very carefully at their fixed costs," he says. "Ultimately, a lot of line managers are not going to want to go through the hassle of approaching headquarters to explain why someone in a support role should receive an increase above what the company's expectations are."
Having said that, Bennet does state that those who have taken on extra duties could still be deemed eligible for larger increases, so long as they can be justified.
In a related finding, the Q4 survey also showed a marginal increase in the number of candidates looking to change jobs in the next six months, from 56.4 per cent in Q3 to 58.6 per cent in Q4. This, explains Bennett, is a predominantly cyclical movement, but also a symptom of some of the discontent surrounding compensation. Carss also attributed it, in part, to anticipatory job hunting by those expecting to be subject to retrenchment.