But fewer employees worried about layoffs as market improves: survey
Citizens of Hong Kong aren't very hopeful for a salary increase this year, despite the financial hub starting to reopen its borders with hopes of economic revitalisation.
A survey among 677 citizens by the Democratic Alliance for the Betterment of Hong Kong revealed that 52% are expecting a wage freeze this year.
Another 20% said they are expecting a cut in their salaries, while 28% said their wages would rise, according to the findings.
This is despite a recent report from Willis Towers Watson that many employers across the Asia Pacific region are budgeting for a higher pay raise this year. In Hong Kong, the 2023 projected salary increase is 4%, higher than the 3.8% actual salary increase in 2022.
Hong Kong's reopening
The findings come as Hong Kong starts reopening its borders to reinvigorate its economy and restore its status as an international financial centre after years of restrictions due to COVID-19.
The pandemic hit hard the livelihoods and incomes of many Hong Kong residents, with 21% of the report's respondents saying they were asked to suspend work in the past six months, and 55% saying their income was affected by the suspensions, unpaid leave, or salary reduction.
With borders reopening, however, the number of Hong Kong citizens concerned about layoffs dropped to 46% in the survey, down from the previous 54.9.
"As the market improves, 'wage earners' will naturally ease their worries about being cut wages, layoffs, or closing down by the company," the alliance said in the report. "However, as the market has just recovered, wage earners tend to be conservative in their salary adjustment expectations, and most people expect only a salary freeze."
More people left unemployed
In terms of unemployment, the survey found that the number of people who were left unemployed for more than six months soared to 81%, up from the previous 58.7%.
"It can be seen that it is still 'difficult' for the unemployed to find a job, and the 'waiting' time of the unemployed tends to be extended," the report said.
Only 19% said they are confident in landing a job within three months, while 75% did not express confidence at finding work, according to the report.
Hong Kong's unemployment rate stood at 3.5% in the December quarter, according to data from the Census and Statistics Department. This is a slight drop from the previous 3.7% recorded in the previous quarter.
Labour and Welfare Secretary Chris Sun said this reflects the improvement of the labour market, adding that it should "continue to improve in the near term."
"With most social distancing measures removed by the government and normal travel between Hong Kong and the mainland gradually resumed, domestic economic activities are likely to show a more visible revival, lending further support to the labour market," he said. "However, the tightened financial conditions may partly offset the positive effects."
To further fill in gaps in the workforce, the government recently expanded the number of sectors allowed to bring in non-local talent for short-term activities even without an employment visa or other entry permits.