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Singapore remains the place to be for the highest base salaries at senior and top management levels in the region, with salaries around 10% higher than the next highest ranked market, Hong Kong, according to new research by Towers Watson.
The findings of the Asia Pacific section of Towers Watson’s 2014/2015 Global 50 Remuneration Planning Report aim to shed light on the relative competitiveness of base salaries across the region and the impact of currency movements on base salaries in U.S. dollar terms.
The findings also provide present salary and benefits information in a consistent job-levelling framework that serves as a foundation for reward program design and delivery.
In Singapore and Hong Kong, base salaries overall edged 3%-4% higher, except at top management level where base salaries grew around 6%-8%.
Executives right at the top of the hierarchy in Singapore have an average base pay of around US$586,000 a year, compared to around US$445,000 a year in Hong Kong – a differential that narrowed fractionally from last year.
“Base salaries are, on the face of it, considerably higher in Singapore than Hong Kong, especially at a top management level, but the tax rates at those levels vary considerably and that has a bearing on take-home pay,” said Sambhav Rakyan, Data Services practice leader, Asia Pacific at Towers Watson.
“That said, we do see signs of regional HQs moving from Singapore to other lower cost locations, such as Malaysia and Indonesia, to reduce staffing costs, subject to availability of talent.”
Hong Kong Base Salaries the Highest in Greater China - Set to Rise Further
Hong Kong is one location that shows no sign of getting any cheaper, at least in U.S. dollar terms. “Hong Kong will very likely top the region for executive pay in the next few years if its currency continues to strengthen against the Singapore dollar,” said Rakyan.
“With the U.S. dollar rising and the [U.S.] Fed expected to raise interest rates this year, the dollar peg will see the Hong Kong dollar rise in tandem.”
While base salaries in Singapore remain top of the table, those in Hong Kong stayed comfortably higher across the board than in Greater China.
For production and manual work, base salaries in Hong Kong are around three times those of China, a gap that narrows to around twice entering the junior management and professional grades. Thereafter, the salaries are 20%-40% higher.
The pay differentials between China and Hong Kong narrowed, particularly for manual and production work, where base salaries in China rose 9%-15% while in Hong Kong they were up 2%-3% on average.
Senior management pay in Shanghai is only 10% below their peers in Hong Kong, reflecting in part the intensifying competition for talent along with the underlying shortage of talent in Shanghai.
“At the support levels wage pressures reflect the growing pressure for low-cost skilled staff to work in manufacturing and services,” said Rakyan.
“It’s worth noting that the income tax environment in Hong Kong is more favorable than that of China, adding to take-home pay and therefore making Hong Kong more attractive in that sense. To an extent, however, we’re seeing some local Chinese companies responding by introducing a higher percentage of variable pay and equity incentives that are creating challenges for MNCs looking to hire and retain talent in China.”
Base Salaries in Taiwan Continued to Lag
Elsewhere in Greater China, base salaries in Taiwan continued to lag. Compared to mainland China, base salaries in Taiwan were around 30% higher for support levels. But at the junior management and professional grades, base salaries in China overtook those in Taiwan. At the high end of the scale, senior executive base salaries in China are about 70% higher.
“The critical reason for low pay is the conservative salary increase philosophy of Taiwanese enterprises,” said Rakyan.
Rakyan notes that while Taiwanese businesses are expanding from local to international and or transforming from manufacturing to being service orientated, they haven’t aligned their pay philosophy with their expansion and growth. "It’s creating a serious talent retention issue for Taiwanese companies."
Low Inflation Keeps Lid on Pay Raises
Overall, salary increases in Greater China and in many parts of the region, were very modest, little changed from last year, largely a reflection on the low levels of inflation in the region.
For multinational corporations converting their staff costs back into U.S. dollars for reporting purposes, the rise in the value of the U.S. dollar, particularly against the yen, Australian dollar, Singapore dollar and renminbi, is significant. Conversely, however, those MNCs with staff on U.S. dollar-based expat packages within these locations are set to see a greater imbalance in their pay structure, accentuating the benefit of localizing remuneration packages for expats.
“While there are other factors at play, such as benefits and the local market situations which may limit the impact, for companies that report in U.S. dollars, the weaker local currencies will clearly help,” said Rakyan. “It’s also worth noting that some of the currency movement occurred after decisions were made and budgets set for salary reviews.”
Singapore, Hong Kong offer the highest salaries in Asia | Enterprise Innovation
The findings of the Asia Pacific section of Towers Watson’s 2014/2015 Global 50 Remuneration Planning Report aim to shed light on the relative competitiveness of base salaries across the region and the impact of currency movements on base salaries in U.S. dollar terms.
The findings also provide present salary and benefits information in a consistent job-levelling framework that serves as a foundation for reward program design and delivery.
In Singapore and Hong Kong, base salaries overall edged 3%-4% higher, except at top management level where base salaries grew around 6%-8%.
Executives right at the top of the hierarchy in Singapore have an average base pay of around US$586,000 a year, compared to around US$445,000 a year in Hong Kong – a differential that narrowed fractionally from last year.
“Base salaries are, on the face of it, considerably higher in Singapore than Hong Kong, especially at a top management level, but the tax rates at those levels vary considerably and that has a bearing on take-home pay,” said Sambhav Rakyan, Data Services practice leader, Asia Pacific at Towers Watson.
“That said, we do see signs of regional HQs moving from Singapore to other lower cost locations, such as Malaysia and Indonesia, to reduce staffing costs, subject to availability of talent.”
Hong Kong Base Salaries the Highest in Greater China - Set to Rise Further
Hong Kong is one location that shows no sign of getting any cheaper, at least in U.S. dollar terms. “Hong Kong will very likely top the region for executive pay in the next few years if its currency continues to strengthen against the Singapore dollar,” said Rakyan.
“With the U.S. dollar rising and the [U.S.] Fed expected to raise interest rates this year, the dollar peg will see the Hong Kong dollar rise in tandem.”
While base salaries in Singapore remain top of the table, those in Hong Kong stayed comfortably higher across the board than in Greater China.
For production and manual work, base salaries in Hong Kong are around three times those of China, a gap that narrows to around twice entering the junior management and professional grades. Thereafter, the salaries are 20%-40% higher.
The pay differentials between China and Hong Kong narrowed, particularly for manual and production work, where base salaries in China rose 9%-15% while in Hong Kong they were up 2%-3% on average.
Senior management pay in Shanghai is only 10% below their peers in Hong Kong, reflecting in part the intensifying competition for talent along with the underlying shortage of talent in Shanghai.
“At the support levels wage pressures reflect the growing pressure for low-cost skilled staff to work in manufacturing and services,” said Rakyan.
“It’s worth noting that the income tax environment in Hong Kong is more favorable than that of China, adding to take-home pay and therefore making Hong Kong more attractive in that sense. To an extent, however, we’re seeing some local Chinese companies responding by introducing a higher percentage of variable pay and equity incentives that are creating challenges for MNCs looking to hire and retain talent in China.”
Base Salaries in Taiwan Continued to Lag
Elsewhere in Greater China, base salaries in Taiwan continued to lag. Compared to mainland China, base salaries in Taiwan were around 30% higher for support levels. But at the junior management and professional grades, base salaries in China overtook those in Taiwan. At the high end of the scale, senior executive base salaries in China are about 70% higher.
“The critical reason for low pay is the conservative salary increase philosophy of Taiwanese enterprises,” said Rakyan.
Rakyan notes that while Taiwanese businesses are expanding from local to international and or transforming from manufacturing to being service orientated, they haven’t aligned their pay philosophy with their expansion and growth. "It’s creating a serious talent retention issue for Taiwanese companies."
Low Inflation Keeps Lid on Pay Raises
Overall, salary increases in Greater China and in many parts of the region, were very modest, little changed from last year, largely a reflection on the low levels of inflation in the region.
For multinational corporations converting their staff costs back into U.S. dollars for reporting purposes, the rise in the value of the U.S. dollar, particularly against the yen, Australian dollar, Singapore dollar and renminbi, is significant. Conversely, however, those MNCs with staff on U.S. dollar-based expat packages within these locations are set to see a greater imbalance in their pay structure, accentuating the benefit of localizing remuneration packages for expats.
“While there are other factors at play, such as benefits and the local market situations which may limit the impact, for companies that report in U.S. dollars, the weaker local currencies will clearly help,” said Rakyan. “It’s also worth noting that some of the currency movement occurred after decisions were made and budgets set for salary reviews.”
Singapore, Hong Kong offer the highest salaries in Asia | Enterprise Innovation


I've been to these places and I don't think the standard of living is that much different from HK.
