Finance and IT professionals have Hong Kong firmly in their sights as a skills shortage pushes salaries higher.
A global hub for business and innovation, Hong Kong is fast becoming a hot spot for professionals seeking to boost their earnings power.
China’s Belt and Road Initiative (BRI) is proving to be a game changer, aimed at building roads, bridges and ports that improve China’s connectivity with the rest of the world. This initiative is driving a rising tide of mainland China companies to set up operations in Hong Kong.
The past five years have seen a 68% increase in the number of China-based businesses establishing offices in the city-state, with many companies now competing for skilled professionals.
Not only is the BRI driving companies to increase headcount, it is also underpinning higher remuneration – research by Robert Half revealing that over one in four (28%) Hong Kong business leaders point to the BRI as a key driver behind increasing salaries.
The potential for greater earning power is attracting many talented professionals to relocate to Hong Kong.
In 2018, over 41,000 employment visas were issued by Hong Kong’s Department of Immigration, up from 32,000 in 2014.
Salaries are rising
While Hong Kong has always attracted overseas talent, the strength of demand for skilled professionals is pushing salaries higher as companies compete to fill in-demand roles.
In the technology space, candidates are firmly in the driver’s seat when it comes to salary negotiations, with one in two (48%) of Hong Kong’s CIOs offering higher salaries to attract the IT workforce of the future.
In the finance sector, Hong Kong has long faced a supply and demand imbalance for finance professionals. Seven out of ten (68%) Hong Kong companies are either already implementing virtual banking or planning to in the next 12 months, just an example of the increased need for skilled professionals, with one in five Hong Kong CFOs planning to grow their headcount.
The urgent need to find candidates with the requisite skills means more than a quarter of Hong Kong’s CFOs recognise the need for increased salaries.
The battle to attract top talent
Independent research by Robert Half highlights the extent of the “war for talent” as major banks, hedge funds and blockchain companies all compete for candidates to facilitate their digital transformation efforts. With few local talent available, foreign workers with the right skills may find greater opportunities in the city-state.
The 2019 Robert Half Hong Kong Salary Guide found that 92% of CIOs say it is challenging to source qualified IT professionals in Hong Kong. Close to nine out of ten (85%) predict the situation will become even more difficult in the coming five years.
The market is equally tight for finance professionals. Seven out of ten (72%) Hong Kong CFOs find it difficult to source qualified finance professionals, with 75% expecting the skill shortage to worsen over the next five years.
Not surprisingly, the Hong Kong Institute of Human Resource Management recently urged companies to step up their efforts to attract and retain talent in order to stay competitive.
With local employers upping salaries and reaching out to foreign professionals to fill the skills gap, the latest Explorer Survey from HSBC describes Hong Kong as a “mecca” for professionals.
The survey found that career progression is the number one driver to relocate to Hong Kong, followed closely by an opportunity to improve personal earnings.
Skills and experience shape IT salaries
Exactly what sort of salary is possible by relocating to Hong Kong hinges largely on skill set and career experience, as well as the particular industry, complexity of the role, and the size of hiring employers.
In the IT sector, demand is especially high for professionals who can implement and upgrade a company’s consumer-facing technology. Developers with backgrounds in Java, C#, C++ and React are keenly sought after. Moreover, experienced IT professionals are in a favourable position to negotiate starting salaries, as the supply/demand imbalance within the technology talent pool puts increased pressure on employers to source qualified professionals.
According to Robert Half, lead software developers can earn salaries from around $HK600,000 to $HK1.3 million depending on experience and demand. Software development managers can command between $HK720,000 and $HK1.2 million, and full-stack software developers can earn salaries in the order of $HK300,000 rising to HK1.3 million for candidates with a significant level of experience.
Finance managers in hot demand
Demand is high for finance professionals. Candidates who can navigate an increasingly complex business market as well as digitised workplaces are typically well rewarded. Finance managers for example, can earn between $HK480,000 and $HK720,000 contingent on company size and candidate experience.
Finance accountants are in hot demand, with one-third of CFOs finding it challenging to source suitably skilled talent in this field. Candidates with a proven track record of successfully running accounting and financial activities have the potential to earn salaries from $HK291,000 to $HK431,000 depending on experience and demand.
Also, in high demand are financial planning and analysis managers. Experienced candidates with the skills to forecast how revenue and expenditures will be impacted by new technologies are earning salaries up to around $HK960,000.
Contract roles are worth considering
Relocating to a new country for a job opportunity is a big commitment. However, contract work can give professionals a taste of working in Hong Kong without a lengthy upfront commitment.
With companies in Hong Kong expanding due to the BRI, contracting in finance has increased with 72% of finance leaders pointing to contract workers as a key component of their staffing strategy.
Pay scales for contract work will depend on the nature of the role. However, candidates have the potential to earn a higher rate compared to a permanent position owing to the complexity of the role, and the lack of typical benefits associated with a full-time position. But it’s always important to research the company that you’re planning to interview with thoroughly to know whether you’re suited.
Tax advantages for relocating to Hong Kong
There are also considerable tax advantages for choosing to live and work in Hong Kong.
Based on Hong Kong’s 2018/19 income tax rates, the maximum amount of tax that an employee would pay is 17% of everything over $HK200,000 (the equivalent of $US25,567). However, the benefits are most impactful for high-income earners.
For example, a single US employee earning $US30,000 would only need to pay 12% taxes on their income. Whilst a single in the US earning over would have to pay 37% on every dollar over $US500,000. Therefore, moving to Hong Kong could see them save around 20% in taxes.
In Australia, where the maximum income tax rate is 45% for every dollar over $180,000, the tax incentivization is even greater to make the move. On top of that, the Hong Kong tax system allows for a 75% maximum tax deduction which is capped at $HK20,000.
Hong Kong has additional tax benefits as they are completely exempt of capital gains tax, estate tax, and a host of tax treaties with other nations. Depending on where you’re currently a citizen, you can also enjoy double tax relief.
Living in Hong Kong
Hong Kong is a unique city where an exciting lifestyle combines with opportunities for career progression and rewarding salaries.
The expat community in Hong Kong is incredibly small, so finding and meeting like-minded people should come easily. This comes with the unforeseen benefit of further developing your professional network and broaden your international contacts.
It’s important to also find out the expat/local split of the company that you plan on joining, as some can be as high as 50% expat and other can be made up entirely of local talent.
In summary, Hong Kong is a great destination to consider for Finance and IT professionals due to the growing demand for skilled workers, competitive salaries, tax advantages, and attractive lifestyle.