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Connor Mycroft

Nearly a quarter of Hong Kong companies were considering freezing employee salaries and another 18 per cent were weighing offering smaller wage increases following the government’s pay freeze for civil servants, a survey has found.
The Hong Kong Institute of Human Resource Management polled 144 companies across a “wide range” of industries between February 28 and March 11, although it did not disclose the names or the number of employees represented.
The survey period started days after Financial Secretary Paul Chan Mo-po announced the government would freeze civil servant pay and axe 10,000 positions as part of efforts to tackle the city’s HK$87.2 billion (US$11.21 billion) deficit.
When asked about whether the government’s move had affected pay adjustments for 2025, 42.7 per cent of the polled companies said they would consider modifying their levels.
Of that proportion, 24.4 per cent said they would consider a pay freeze, while 18.3 per cent indicated they might lower the level of the increase.
Thirty-four per cent of respondents reported no changes to their pay plans, while the remaining 23 per cent said they were unsure.
Among companies that had either already implemented base pay adjustments or had budgeted for them before the government’s announcement, 80 per cent said they had introduced a pay increase, while 18 per cent decided to freeze salaries. Just 2 per cent had opted to reduce pay.
When it came to job cuts, 31 per cent of respondents said they would consider adjusting manpower levels in light of the government’s budget delivery, whereas 47 per cent reported no change. The remaining 22 per cent were unsure.
Overall, 58 per cent of respondents said they had plans to freeze their headcount this year, with just 23 per cent planning to increase their number of hires. Nineteen per cent had anticipated reducing their headcount.
The institute also estimated that professionals could expect a pay rise of between 3 to 3.5 per cent this year, based on its annual survey, insights from members and the latest economic situation.
“While some employers may become more conservative in their approach to pay increases and manpower planning, still a significant portion of respondents have planned for pay increases and for either maintaining or increasing their current workforce,” institute president Lawrence Hung Yu-Yun said.

Before the delivery of the budget, there had been concerns that a pay freeze or cut for civil servants would have an adverse impact on private sector payrolls.
Hung said that the government’s decision was primarily driven by concerns over tackling the fiscal deficit, rather than significant shifts in the labour market.
Some companies might consider the government’s move as a signal of prudent financial planning, but there were multiple factors involved in determining a company’s pay adjustment level, he said.
While government decisions regarding civil service salaries often influenced private sector practices, companies historically implemented “modest” pay increases even during times of civil service pay freezes, Hung said.
“The Hong Kong labour market remains stable, with a low unemployment rate of 3.1 per cent, reflecting strong demand for talent across various sectors,” he said.
Industries with high talent demand, such as information technology, banking, and insurance were expected to provide more competitive compensation packages and provide other incentives to retain skilled talent, he said.
According to the group’s 2024 pay trend survey, the major factors affecting companies’ pay adjustments were business performance, individual performance and local economic conditions.


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When asked about whether the government’s move had affected pay adjustments for 2025, 42.7 per cent of the polled companies said they would consider modifying their levels. Photo: Edmond So

Financial Secretary Paul Chan has announced the government will freeze civil servant pay and axe 10,000 positions as part of efforts to tackle the city’s HK$87.2 billion deficit. Photo: Jelly Tse

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Civil servant pay freezes are not expected to have a major impact on Hong Kong’s private sector. Photo: Jonathan Wong

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Survey by Hong Kong Institute of Human Resource Management also finds 18.3 per cent might offer smaller increases


Survey by Hong Kong Institute of Human Resource Management also finds 18.3 per cent might offer smaller increases.
