Employees should receive a pay hike of at least 3.5 percent in 2026, the Federation of Hong Kong and Kowloon Labour Unions (HKFLU) suggested on Wednesday while highlighting subdued worker optimism this year.
A survey conducted from June to September with 1,383 employees across industries found less than 40 percent expecting raises of 3 percent or below, over 20 percent anticipating more than 3 percent, and only 7.75 percent predicting hikes above 5 percent.
HKFLU chairman and lawmaker Lam Chun-sing observed that in previous years, workers typically aimed for salary hikes of 7 to 8 percent. This year, however, most expectations are in the 3 to 4 percent range.
He attributes this shift to several factors, including salary freezes, rising unemployment and ongoing inflation, all of which have intensified living cost pressures.
The freeze on civil servant salaries has also contributed to a more cautious overall sentiment among workers regarding salary increases, he added.
As the government began public consultation for the 2026/27 Budget, Lam urged the government to consider five factors to decide whether civil servants should receive a salary raise, including the salary trends survey, economic conditions, government finances, and changes in living costs, as well as civil servant morale and demands.
He said that this ensures that salaries remain competitive and can catch up with inflation over the past two years.
The survey also finds that more than 20 percent of respondents reported that their companies are undergoing large- or small-scale recruitment, while another 20 percent indicated that hiring is being frozen.
Additionally, over 30 percent of respondents mentioned that their companies are implementing small-scale layoffs, with fewer than 5 percent reporting large-scale layoffs.
The survey also asked about factors determining their salary adjustment expectations.
Respondents prioritized inflation as the key factor for adjustments, with nearly 70 percent citing it, while around 20 percent emphasized external economic conditions, company results, and tenure.
HKFLU stressed that stagnant wage growth amid rising expenses diminishes employee benefits, calling for increases aligned with costs and individual performance to deliver tangible improvements.
