Despite uncertainty around the globe, Hong Kong's banking infrastructure sector has proved remarkably resilient
Bucking the trend in other markets, Hong Kong's financial services professionals have continued to prosper, with high levels of pay growth. Many have received double digit average salary increases, and there is optimism around bonuses. But, according to the
Astbury Marsden Compensation Survey 2011, there are indications that the uncertainty in other markets is beginning to affect employee sentiment.
The survey, which was conducted in September and October 2011, found that employees in Hong Kong's banking infrastructure sector saw their pay increase by an average of 15% this year. This brought the average basic pay across the sector to $74,136 a month.
Almost half (49%) of those surveyed enjoyed an increase in their pay, whether as the result of a promotion, a move to another employer or a pay rise. One per cent saw their base pay decrease in the year, with the average fall 16.2%.
High risers
Employees in one function, compliance, were able to secure a higher than average pay rise. They saw their average pay increase by 21.6%. But, although they enjoyed the highest pay increase, employees in compliance aren't the highest paid. This position is enjoyed by employees in risk and finance, who earn $84,596 and $75,244 a month respectively.
Securing a new position, whether internally or with another organisation, remains a lucrative option. A third of those surveyed received a promotion in the last year. This brought with it an average base pay increase of 18.6%, compared with an average rise of 12.3% for those who were not promoted.
Moving to a new employer had an even more positive effect on salary. For the 29% of employees who moved companies in the last 12 months, the average pay rise was 21.2%. For the 11% of respondents who were able to combine a move with a promotion, the average increase rose to 25.3%.
Bonus expectations
While bankers' bonuses have become a major issue in other financial markets, most notably Britain, this isn't the case in Hong Kong where banking employees are optimistic about their bonus prospects.
Sixty-one percent of respondents are anticipating a bonus this year, which is markedly higher than in other financial markets. For example, just 33% of employees in London's banking infrastructure sector expect to receive a bonus this year.
On average, employees expect to receive a bonus of just over 37% of basic pay. The highest expectations come from employees in finance and operations, where bonuses equivalent to 41% of base pay are anticipated. Similarly, the greatest degree of optimism about bonus size is amongst the more senior roles, with directors and managing directors expecting bonuses of 39% and 52% respectively.
But there are indications that the uncertainty in other markets is affecting the Hong Kong banking sector. One third of respondents are uncertain about their prospects of an annual bonus and two thirds expect their bonus to be below 2010 levels.
Motivating employees
Private medical insurance is the the most sought after employee benefit. Almost 90% of those surveyed either valued this very highly or highly, with just a few people saying they didn't care whether it was part of their package.
Work-life balance, a good holiday allowance and flexible working hours were also highly valued. At the opposite end of the spectrum, respondents were least concerned about their employer providing a company car, financial advice or subsidised gym membership.
When drilling down by function, nearly all employees in operations regarded private medical insurance as an important benefit. Holidays were most highly valued by people working in compliance and risk functions while pensions were regarded as the most important benefit by a higher percentage of those in risk.
Pay is also a key motivator. Here, the report found that the majority of employees would rather have an increase in their fixed rather than variable pay. This was particularly the case for middle managers, where more than 80% of those surveyed stated they would rather see their fixed pay increase. This could be a reflection of the desire for greater certainty in uncertain times.
Outlook for 2012
When it comes to expectations for pay increases in 2012, the uncertainty in other financial markets appears to be influencing employee sentiment. Of those surveyed, 32% were uncertain about a pay increase in 2012 while 14% didn't expect to receive one at all.
But in spite of this uncertainty, there's still optimism with an average pay rise of 9% expected. Employees in operations have the greatest expectations, at 9.7%, while those in compliance are anticipating the lowest increases at 8.0%.
When it comes to position, assistant vice presidents are the most optimistic, expecting an average pay rise of 10.3%, with those working in finance anticipating the most at 12.5%. Conversely, managing directors are the least optimistic: they expect their base salary to increase by just 5.6% over the next 12 months.
Further indications that uncertainty in other markets is beginning to influence employee sentiment can be seen when employees were asked what action they'd take if they were disappointed by their bonus and pay package. In line with other markets, 35% said they'd look to change employers but, more surprisingly, 20% of those polled said they would consider relocating to another financial centre if they were unhappy with their package.