Private Sector Pay Review 2009

The Hong Kong General Chamber of Commerce's annual review of private sector pay trends is an important indicator for members. While we strive to undertake a thorough analysis each year, the global financial turmoil and very rapid shift in expectations and sentiment make it particularly difficult to see beyond the next several weeks. Nevertheless, we present here – for your reference only - the Chamber's best thinking on pay trends and the outlook for the year 2009. The past 15 months have seen a world-wide acceleration of uncertainty rarely experienced in recent decades. Not since 1991-93 have the major OECD economies' consumers so convincingly expressed their intentions to curtail purchases. Not since 1974 have Europe, Japan and the United States been in a synchronized recession. And, not since the 1930s has the so much of the world faced the levels of uncertainty we must confront today. As responsible employers, it behoves us not to underestimate the challenges of the year ahead. Companies and industry sectors will find their individual circumstances dictating decisions much more so than in the past. Where businesses are strong and medium-term opportunities bright, we hope companies will refrain from laying off staff during these difficult times. Some companies, of course, will not be able to survive without significant cost-cutting. For those firms, and where specific conditions permit, we would encourage a frank discussion with staff to arrive at an agreement on feasible arrangements for managing costs and the worsening business situation." Our Advice Hong Kong is likely to fare better than many other business centres in the coming year, due to our close interdependence with the Mainland of China. While it would be reckless to suggest that we will sail through these troubled times without worry, we should be among the best positioned to take advantage of the upswing, when it comes. With that in mind, we offer the following advice on compensation and employment for 2009: To the extent that individual and sector-specific circumstances permit, companies should avoid laying off staff if agreement on part-time work, voluntary severance, leave-without-pay, study leave or pay reductions will achieve the necessary financial objectives. We face an extremely difficult year, and yet our unique position as China's international city should help ameliorate the worst of the threats to come. We believe retaining skilled and experienced staff now, when times are tough, will be rewarded when new opportunities emerge. With best wishes for the year to come, Andrew Brandler, Chairman