Civil service pay freeze ‘should not affect Hong Kong’s private sector too much’

Human resources researchers and industry insiders believe the planned salary freeze for Hong Kong’s civil servants will not have a major impact on the private sector, with companies already setting this year’s pay adjustment levels and facing staff shortages.

In his budget speech, Hong Kong finance chief Paul Chan Mo-po announced a pay freeze for all public servants in the coming financial year and a cut of 10,000 positions by April 2027, in an attempt to alleviate a deficit of HK$87.2 billion.

Speaking to the Post on Thursday, some industry observers agreed that the measures were necessary to tackle the city’s deficit and would serve as a reference for the private sector, despite many companies not expected to follow suit, having already conducted a pay review in January.

“I would say that most companies have been doing this faster than the government,” said Anna Tsui Po-yung, a senior lecturer at the department of management at the Chinese University of Hong Kong.

“The government is large and it looks for stability. It is already the slowest to make such a decision.”

But Tsui said the freeze was a “strong signal” from the government that they wanted to rein in manpower.