Hong Kong vs Greater Bay Area: Pay adjustments and bonus payments

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Looking ahead to 2024, Hong Kong employees expect to see a pay rise of 4.1%, while those in the Greater Bay Area expect 5.4%.

According to the Pay Trend Survey conducted by the Hong Kong Institute of Human Resource Management (HKIHRM) and CIIC, Hong Kong employees' average salary increased by 0.3 percentage points to 3.8% in 2023, 2% lower than employees in the Greater Bay Area (GBA) at 5.5%.

Looking ahead to 2024, Hong Kong employees expect to see a pay rise of 4.1%, while 5.4% are the expectations for employees in the Greater Bay Area.

The survey collected data from 209 companies in Hong Kong across 12 industries, as well as 384 companies in GBA across over 10 industries, aiming to understand the trends in pay adjustments and bonus payments among companies.

Here are the key findings:

Base pay adjustment

Among the responding Hong Kong companies which provided data on pay adjustment, 98.6% offered a pay increase in 2023, while 1.4% froze their employees’ pay. Among the employees of these companies, a majority of 93.2% enjoyed a pay rise, while 6.8% saw a wage freeze.

Small-sized companies (those with fewer than 100 employees), medium-sized companies (with an employee size between 100 and 1,000), and large-sized companies (with more than 1,000 employees) offered the same pay rise at 3.8% in 2023. In terms of employee level, middle-level staff received the largest pay adjustment at 3.9%, while top-level staff were slightly behind at 3.8%.

Three major factors that companies consider in pay adjustment are:

1. Business performance,
2. Individual performance,
3. Market and competitor’s pay adjustment.

As for the GBA companies, 71% offered a pay increase in 2023, while 29% froze their employees’ pay. For the organisations planning to increase employee pay, 45% stated that they would adjust pay according to their original plan without being affected by the market environment, while 26% reported a decrease in pay adjustment budgets.

R&D/technical staff received the largest pay adjustment at 7.3 %, while fresh graduates were slightly behind at 6.3%. On the other hand, promoted employees received the largest pay adjustment at 10.3%, while core/excellent employees were slightly behind at 9.7%.

Looking ahead to 2024, there were 139 and 384 companies in Hong Kong and GBA that respectively provided projection data for 2024, revealing that they:

• forecast a pay rise next year (62% in Hong Kong vs 28% in the GBA),
• expected staff pay to freeze (4% vs 4%),
• had yet to conduct a forecast (35% vs 68%).

Bonus payments

In Hong Kong, 41.8% of the companies indicated they had guaranteed bonus schemes for staff. The average size of the guaranteed bonus was 1.04 months of base pay, slightly lower than the level of 1.09 months in the previous year.

Meanwhile, 91.7% reported that they offered a non-guaranteed bonus to their employees, with 66.4% eligible for a non-guaranteed bonus plan with the average size of the bonus of 1.30 months of base pay, lower than the 1.57 months recorded in the previous year.

In terms of employee level, the average size of non-guaranteed bonus received by top-level staff was 2.98 months of base pay, which exceeded the average amounts of senior-level (1.86 months), middle-level (1.32 months), and general staff (1.15 months).

Mainland companies provide different incentives for employees. The most common type of incentives include:

1. Year-end bonuses,
2. Performance bonuses,
3. Project bonuses.

Among employees who received year-end bonuses in 2022, the average amount was 1.8 months of base pay, lower than the 2.1 months recorded in 2021.

In terms of employee level, 30% of middle-level management (sales) received year-end bonuses that were four times or more than their base pay, while functional staff were slightly behind at 24%.

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