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5 Feb 2016
Human Resources
Employees in Hong Kong are known for their diligence, perseverance and professionalism, thereby providing quality support to businesses set up in Hong Kong by investors. To retain talents, companies should budget a bigger share in the overall operating costs for human resources expenditure. The general factors affecting human resources in Hong Kong are as follows:
(1) Stipulations in the Employment Ordinance: This is the main piece of legislation governing conditions of employment in Hong Kong. An employee working for the same employer continuously for four weeks or more and working at least 18 hours every week, his/her employment contract will be regarded as a continuous contract. Employers and employees are free to negotiate and agree on the terms and conditions of employment provided that such terms and conditions do not violate the provisions of the Employment Ordinance:
- payment of wages
- Rest days
- Paid leave
- annual paid leave
- sickness allowance
- maternity leave - Paternity leave
- Severance payment
- Long service payment
- employment protection
- termination of contract - Protecting employees from discrimination for participating in trade union activities
(2) Basic wages: Minimum wages are enforced in Hong Kong at $32.5 per hour. Other factors affecting the level of wages include:
- market price
- qualifications (work experience)
- academic qualifications
- ambition
- enthusiasm for work
- interest in work
(3) Mandatory Provident Fund: According to the Mandatory Provident Fund Schemes Ordinance, employees aged 18-65 are required to join the scheme and make contributions regularly for their future pensions. The schemes are sponsored by the employers. Contributions are calculated on the basis of the employees’ income level. Some of the salient details are as follows:
- The employer and its employee each are required to make the mandatory contributions of 5% of the employee's relevant income to the scheme
- The amount of mandatory contributions is subject to the maximum and minimum income levels
| Payroll Frequency | Minimum Level of Relevant Income (HKD) | Maximum Level of Relevant Income (HKD) |
| Monthly | 7,100 per month | 30,000per month |
| More frequently than on a monthly basis | 280 per day | 1,000 per day |
| Less frequently than on a monthly basis | 7,100 per month, that amount as prorated | 30,000 per month, that amount as prorated |
- Employees with income less than the minimum income for contributions will be exempted from making contributions but the employer is still required to contribute an amount equals to 5% of the employee's income.
(4) Fringe benefits provided by employers: Apart from the above statutory benefits, some employers will in accordance to practical needs and cost control principle provide discretionary benefits, in a lump sum of cash or in the form of reimbursement, as follows:
- year end bonus or double pay
- medical allowance
- meal allowance
- housing allowance
- transport allowance
- children’s education allowance
- employer’s voluntary contribution to MPF scheme
(5) Consultant fees: Companies hiring human resources consultants to look for and recruit talents need to pay for the relevant services. Their fees are as follows:
- general staff: employee’s one month’s salary
- professional/management staff: around 1/3 of employee’s annual income
- payment schedule:
- a payment made upfront, the remaining sum paid after recruitment completed
- entire sum payable after successful recruitment
Note: the amount of payment varies with individual circumstances. Information provided is for reference only.
Tips from HKTDC: Human Resources
Mainland enterprises recruiting talents in Hong Kong may find the costs much higher than that on the mainland. How should recruitment cost be estimated and how can they be reduced?
- Example for reference: Salary level varies with job type, position and industry sector. The following is an example of a small to medium-sized trading firm with 5-10 staff members. Making a reference to basic manpower requirements, its manpower cost is calculated approximately as follows:
| Position | Number | Work experience (Years) | Monthly salary (HKD) | Job description |
| General Manager | 1 | 15+ | 35-80K | Oversee and direct business development and overall operation |
| Purchasing Manager | 1 | 8-12 | 25-35K | Oversee and direct purchasing business |
| Senior Purchaser | 1 | 5-8 | 20-25K | Execute purchasing assignments |
| Purchaser | 2-5 | 3-5 | 13-18K | Assist Senior Purchaser to execute purchasing assignments |
| Executive Secretary | 1 | 5-8 | 18-30K | Routine office administration and perhaps also bookkeeping and other duties |
| Clerk | 1 | 0-2 | 7-9K | Routine clerical duties |
| Shipping Officer | 1 | 3-8 | 12-18K | Outgoing shipments and customs clearing |
Source: Mingpao JUMP Salary Index
Note: Salary index varies with time and individual circumstances, such as inflation, market supply and demand. The above salary figures are for reference only.
- Leverage on the strengths of human resources consultants: Hiring consultants can help reduce initial nitty-gritty work such as placing advertisements and preliminary screening of applicants. This is particularly the case when recruiting senior management staff as the network and experience of the consultants can reduce the chance of mismatching and therefore more cost-effective.
- Make use of government resources: Vacancies for the lower paid and non-skilled staff such as tea-ladies, couriers and janitors can be registered free of charge at the Labour Department.
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