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Salary rises second lowest in the region

By Benedict Rogers, Hong Kong iMail, Thursday 11 January 2001: 01:43 AM

HONG Kong and Japan saw the lowest salary increases in the region last year, and forecasts for this year show little change in that position, a survey by global management consulting firm Hewitt Associates has found.

The Asia-Pacific region's continued economic recovery led to salary rises in 2000 and predicted increases in 2001, but Hong Kong employers have projected the lowest rises in the region this year. Average salary increases in Hong Kong are forecast at 4 to 4.3per cent and performance-based increases in the range of 2.5 to 3.6per cent, the survey has found.

Last year Hong Kong firms gave pay rises of, on average, 2.7 to 3.8per cent. Japanese companies gave the smallest increases in the region, averaging between 2.2 and 3per cent.

India and Indonesia top the list for pay increases. Last year India gave, on average, salary rises of between 12.4 and 15.1per cent, depending on the job category, and Indonesian employers increased salaries by between 13.3 and 14.8per cent. For 2001, employers in India are projecting average salary increases of between 11.8 and 15.6per cent, and merit increases of between 8.3 and 15.4per cent.

The gap between developed and developing countries' approaches to salary increases is highlighted in the survey.

This difference was one of the most striking things we found when we compared results from around the region, said Frank Johnson, head of Hewitt's measurement practice in Asia-Pacific. Employers in emerging markets may be trying to make up for opportunities lost in prior years to reward their employees.

Hong Kong's low rises were mainly due to the fact that its salary levels were the highest in the region, Mr Johnson said.

Hong Kong does not have to give as high an increase as other countries do to be competitive, he said. The survey, which covered 11 countries in the region and studied five job categories from senior management to manual workers, was described by Hewitt as the most comprehensive of its kind in the region.

It examined attitudes towards attraction and retention of talent, and found that Singapore companies were the most concerned about their ability to attract talent. In Singapore, 89per cent of companies expressed concern over attraction, and 91per cent were concerned about retention. In Hong Kong 41per cent of employers were concerned with attraction, and 54per cent with retention.

In both Hong Kong and Singapore, the information technology (IT) and sales and marketing functions were the most in demand.

Competition for talented people is heating up, especially in the emerging market economies, Mr Johnson said.

As competition increased, he predicted there would be greater focus on performance-based pay increases.