SCMP Wednesday, November 7, 2001
Half of workers facing pay freezes
Employees at almost half of Hong Kong's major businesses will have their pay frozen next year as one in four firms prepare to axe jobs, according to two surveys released yesterday.
The Institute of Human Resources Management's annual pay trend survey, covering 105 firms with 124,000 employees, found more than 45 per cent of companies which review salaries in January planned to freeze wages.
Those planning pay rises would offer increases of up to four per cent, but the average pay rise for all companies next year would be less than 0.5 per cent, the institute's survey predicted.
The institute's remuneration committee co-chairman, Patrick Maule, said: "My hope is that companies will freeze salaries rather than cut them.
"Companies that took our advice last year and gave pay rises in the form of discretionary bonuses rather than salary increases will be able to cut costs by reducing bonuses next year."
Mr Maule said past experience suggested most firms which had yet to decide on pay rises would follow the trend and freeze salaries.
The survey also found that the average pay rise this year was 2.6 per cent, compared to 0.8 per cent in 2000. Companies in the insurance, telecom and trading sectors awarded the biggest pay rises this year.
The institute's former president, Mak Ping-on, said: "Pay adjustments in 2001 were in line with last year's prediction [of 2.8 per cent] and reflected short-lived improvement in the economy in 2000."
The survey also indicated that the hiring of contract or part-time staff continued to gain momentum.
Last year, 47 per cent of firms were hiring and this year the figure rose to 49 per cent.
In a separate study conducted by the institute, 10 of 45 companies surveyed said they planned to lay off staff in the immediate future and seven had already done so. Mr Maule said between 70 and 80 per cent of the companies had imposed freezes or partial freezes on recruitment and a "significant number" were cutting back on their expenditure.
The vice-chairman of the Federation of Hong Kong and Kowloon Labour Unions, Poon Siu-ping, said: "The economy is so bad that workers do not have any bargaining power over pay, so any talk of possible salary improvements is unrealistic."
City University finance and economic professor Charles Li Kui-wai said workers should focus more on protecting jobs than on securing pay rises.