Expat packages fall to five-year lowTop News | Phoebe Ng 18 May 2017
Pay packages for expatriates have slumped to a five-year low in Hong Kong due to shrinking benefits, a new survey reveals.
On average they earned US$265,000 (HK$2.06 million) last year - 2 percent less than five years previously.
That followed a US$267,000 average for 2015.
But the SAR's expatriate pay level stood as the fourth highest in the Asia Pacific region - unchanged from the previous year - though its global ranking slipped one notch to No 5, ECA International found.
Presenting the results of the survey yesterday, Lee Quane, regional director of the human resources consultancy, said: "Rental prices in popular expat neighborhoods have been declining since 2012. That translates to a 5 percent drop in benefits, which cover living allowances."
A standard expatriate package usually has three components - salary, benefits and tax. "The benefits component is normally much greater than the assignee's net take-home pay [in Hong Kong]," Quane said.
"Even with the 5 percent drop, the value of benefits remains significantly higher than in all other locations in the Asia Pacific."
The 2016 survey covers 290 companies and over 10,000 international staffers across 160 countries.
The United Kingdom headed the global table, while Japan, the mainland and India topped the table in the Asia Pacific.
Quane said Hong Kong traditionally has offered "more lucrative packages" than major Chinese cities yet the gap has been closing.
"Mainland companies are trying to offer better packages to attract talents. They have been finding it challenging to recruit expats amid rising living costs and pollution."
China, ranking No 2, paid US$282,500 on average. That was 3 percent down on 2015 because of a weaker yuan.
In Japan, expats were paid US$267,500 - 12 percent up on the previous year ago thanks to a stronger yen.
Although India ranked third, almost half of the average US$277,900 package went on taxation.
"When tax is excluded, India falls out of the regional top 10," Quane said.
Singapore, which paid expats US$235,500 on average in 2016, ranked ninth in the Asia Pacific region.
"The cost of an expatriate package has fallen by 6 percent in US dollar terms over the past five years despite a rise in remuneration in Singapore dollars," Quane said.
A property expert noted that expatriates in Hong Kong are receiving less living allowances than previously.
Benefits used to amount to millions in Hong Kong dollar terms, said Buggle Lau Ka-fai, chief analyst of Midland Realty, "but the level has declined a lot."
Lau pointed out too that rents for high-end and mid-range apartments have eased in recent years.
"The finance industry did not really expand greatly in Hong Kong," he offered as a reason for that trend. "In fact, it has even shrunk a bit. An exodus of expatriates means lower demand."
The number of Britons in Hong Kong dropped 10.6 percent last year, Immigration Department figures show. The numbers of Americans and Australians declined 8 percent and 5 percent respectively.