With Hong Kong battling a talent shortage, market analysts are backing a civil servant pay rise based on the latest net pay trend indicators (PTI) released last week.
Following analysis on data from over 100 private companies, the latest PTI for the lower, middle, and upper salary bands are 1.17 percent, 2.64 percent and 4.12 percent, respectively.
The findings have drawn support from voices saying they align with current market conditions, calling for a full or near-full pay adjustment.
Citing severe departures among senior civil servants, some warned of a deepening talent shortage if the government fails to offer competitive pay, which could ultimately affect public services and the citizens.
Echoing market concerns, lawmakers Ronick Chan Chun-ying and Aaron Bok Kwok-ming agreed that a reasonable pay rise would boost civil servants' morale after a two-year pay freeze and mounting workloads from budget cuts.
Additionally, lawmaker Chau Siu-chung said the suggested adjustments are based on the city's living cost to ensure civil service pay remains comparable to the private sector, urging the government to follow the indicators.
Analysts stated that the government is the largest employer in the city, the salaries of civil servants serve as benchmarks for businesses of all sizes to refer to when determining pay adjustments for their employees, especially those in public or semi-public sectors.
Chief executive for Tung Wah Group of Hospitals Albert Su Yau-on reported that many subsidized positions in the Group take reference from the civil service pay adjustments. Su stressed that there are nearly 10 percent vacancies in front-line residential care homes, warning that failure to raise workers' salaries could drive away experienced staff, affecting service quality.
According to the World Competitiveness Yearbook 2025, Hong Kong ranks second globally in "government efficiency," with its civil service widely regarded as professional and effective.
However, civil servants have experienced three pay freezes over the past six years, with cumulative inflation over the past two years reaching 3.8 percent.
Considering the government's plan to streamline its structure by cutting 10,000 posts by 2027, market analysts warn that pay lagging inflation will damage recruitment and morale amid a 9.9 percent vacancy rate and rising workloads.
Still, the market remains positive over the city’s economic outlook for 2026, where total exports have risen for 26 consecutive months, surging over 40 percent last month.
Notably, Hong Kong has overtaken Switzerland as the world's largest cross-border wealth hub.
Chairman of the Hongkong and Shanghai Banking Corporation Peter Wong Tung-shun described Hong Kong's economic recovery as sturdy, with 3.8 percent growth expected this year.
Under the current guidelines, the Chief Executive and the Executive Council will consider five factors alongside the PTI -- including the local economy, cost of living, government fiscal position, staff demands, and civil servant morale -- to determine the pay adjustment for the civil servants.
