The average expatriate pay package for a middle manager in Hong Kong has hit a five-year low – falling to US$265,487 in 2016, from US$270,618 in 2012.
The news follows a warning from industry experts of a dramatic increase in the number of employees, including expats, blaming low pay as they look to change jobs this year.
Employers need to “rethink their recruitment strategy” as a result, said Lee Quane, regional director for Asia at expatriate management company ECA International.
A survey conducted in April by recruiter Randstad found that the number of local employees hoping to move jobs within the next 6-12 months is expected to rise to as much 39 per cent in 2017 compared with 28 per cent in 2016.
Randstad Hong Kong managing director Natellie Sun said: “Some 47 per cent of these job seekers said the main reason is because they are not satisfied with salary and benefits.” This put Hong Kong organisations “under more pressure than ever to make their pay more competitive to retain their best talent,” she added.
What’s crucially important, according to Quane, is to “strike a balance between attracting the right talent while remaining as cost-effective as possible.” Hong Kong employers have tradtionallly offered “generous expatriate packages to attract highly sought-after talent because of dangerous levels of air pollution, combined with high international school fees and accommodation costs,” he said.
Apparently, this has not been reviewed regularly: a key factor for expatriate employees is the support that employers provide in meeting accommodation and children’s education costs which can be “famously high in Hong Kong,” Quane said. Middle managerial talent are likely to be married and have school-age children, he said, adding that “regular review of overall packages” is key.
For the time being, expat workers are pocketing a windfall due to declining accommodation costs. While accommodation costs in Hong Kong have typically fallen over the course of the past five years, some employers have been slow to reduce the value of any financial support they provide to expatriate employees.
“This can be a short-term benefit to the organisation in terms of employee retention; in the long-term, when accommodation costs start to rise again, the HR function will face calls from the employee to increase the level of support,” Quane warned.
Sun argued that Hong Kong organisations need to understand what hiring top talent actually means: “Are they looking for star individuals who consistently outperform their targets, or are they looking for the best possible match for their specific role?” she asked. Such employees “are likely to move on quickly, especially if the fit is not right”- requiring the company to rehire at additional cost.
“What matters at the end of the day for an expatriate worker planning to relocate to Hong Kong is how attractive their package is in comparison to what they earn in either their home country or another location where their skills are also in demand,” Quane added.