The average rate of pay increases for employees across the Guangdong-Hong Kong-Macao Greater Bay Area increased slightly in 2026, with Hong Kong and Macao at 2.8 percent and Chinese mainland cities reaching 4.2 percent, according to a survey released on Thursday.

The survey also shows that nearly half the companies interviewed in Hong Kong and Macao plan to continue raising salaries next year. Such trends reflect the region’s economic resilience amid a cautious outlook, as well as enterprises’ efforts to retain core talent amid a polarizing employment market, said the experts who compiled the survey.

Conducted by the Hong Kong Institute of Human Resource Management and CIIC Management Consulting Co, Ltd, researchers interviewed 682 firms and nearly 370,000 employees in the 11-city cluster.

Companies in Hong Kong, Macao, and mainland Greater Bay Area cities are expected to increase average pay by 2.9 percent, 2.6 percent, and 4.3 percent, respectively, next year.

Company performance, local economic conditions, and pay adjustments by competitors or within the overall market are the top three factors that Hong Kong companies consider when determining the extent of pay adjustments. These are followed by individual employee performance and inflation.

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Compared with Hong Kong and Macao — where 92.6 percent and 87 percent of surveyed organizations, respectively, increased salaries this year — 61.4 percent of organizations in mainland Greater Bay Area cities did so. Meanwhile, 20.2 percent opted to freeze their pay levels and 18.3 percent cut salaries.

Of the mainland cities, Shenzhen, Dongguan, and Huizhou recorded the highest pay increases this year. By industry, emerging sectors such as high-tech, new energy, and pharmaceuticals saw the largest pay rises.

Lawrence Hung, former president of the Hong Kong Institute of Human Resource Management, said companies were moving toward more refined workforce management amid an uneven economic landscape and the wider adoption of generative artificial intelligence and automation. Resources were being directed more toward key talent, skills training, upskilling and job redesign, he said.

Hung added that, despite uncertainties easing within global economies and in Hong Kong, risks such as higher interest rates in external markets and volatility in asset markets remain. The demand for labor in certain sectors has rebounded; however, companies remain cautious about salary adjustments.

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As many companies have a limited budget for salary increases, Hung calls for combining compensation growth with skills training, improving benefits, and implementing family-friendly measures to strengthen workforce planning and retain talent in the long run.

David Chen, consulting director of Data Services & Benchmarking Group at CIICMC, said that amid the widespread adoption of new technologies, the development of emerging industries and the deepening reform of talent policies, companies will face restructuring in their hiring and compensation management. He advises businesses to make timely adjustments to their human resources framework in response to environmental changes.

Yao Xi contributed to the story

Contact the writer at bingcun@chinadailyhk.com