The average rate of pay increases for employees across the Guangdong-Hong Kong-Macao Greater Bay Area rose 2.8 percent in the Hong Kong and Macao special administrative regions and 4.2 percent on the Chinese mainland, according to a survey released on Thursday.

The survey also showed that nearly half of the interviewed companies in Hong Kong and Macao plan to raise salaries next year. These 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.

Next year, 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.

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

ALSO READ: Blueprint deepens GBA integration via alignment of rules and mechanisms

The survey added that 61.4 percent of organizations in mainland Greater Bay Area cities increased salaries this year, compared with 92.6 percent of surveyed organizations in Hong Kong and 87 percent in Macao doing so. Meanwhile, 20.2 percent of these mainland firms opted to freeze their pay levels and 18.3 percent cut salaries.

Among 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 Yu-yun, former president of the Hong Kong Institute of Human Resource Management, said companies are 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 easing global economic uncertainties and rebounding demand for labor in certain sectors, risks such as higher interest rates in external markets and volatility in asset markets remain. Companies are still cautious about salary adjustments.

READ MORE: Experts: Landmark plan paves way for sustained regional collaboration

For those with a limited budget for salary increases, Hung suggested 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 Junjian, consulting director of data services and 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 frameworks in response to environmental changes.

Yao Xi contributed to the story

Contact the writer at bingcun@chinadailyhk.com