Hong Kong reels as salaries spiral 'out of control'

Despite efforts by individual agencies and the 4As, Hong Kong is caught in a vicious salary spiral which one senior executive described as "out of control". Staff poaching by dotcoms and among agencies have contributed to pay packets rising by up to 60 per cent in some cases. The hikes fly in the face of a 4As recommendation earlier in the year for agencies to cap increases at three per cent. They also undermine efforts by agencies to retain staff through non-financial means - training, outlining career paths and the implementation of flatter structures that give individuals greater responsibility. A recruiting consultancy source said the situation could become even worse because Pacific Century Cyberworks (PCCW) has begun a massive drive for advertising, marketing, branding and PR professionals. (See also CReATION, page 23). At another recruitment consultancy, a source put the vacancy rate in the ad industry at 30 per cent and added that because it was increasingly difficult to find the right people, agencies were lowering their standards. "One agency was looking to fill a senior position in its interactive unit. The brief was simply that the right candidate had to have two to three years Internet experience. Advertising experience would be an advantage but not necessary. Half a year ago, no agency would have considered this candidate," the source told MEDIA. Dotcoms are mostly poaching middle-ranking agency executives; however, even senior staff are being lured into cyberspace. The most senior defection to date is Mr Raymond So, who quit as J. Walter Thompson Northeast Asia chairman to become executive VP of PCCW in Taiwan. Mr So was with JWT for 14 years and his responsibilities will be taken over by JWT's Asia-Pacific CEO Kevin Ramsey. However, it is the poaching of middle-ranking executives that is fuelling the steep salary spiral. Dotcoms are luring large numbers of professionals from the ad industry, shrinking the talent pool. To compensate, agencies either have to look overseas for replacements or poach from each other. Both options mean greater salary overheads. Some try to retain staff with pay hikes, but even this can be expensive. Agencies said that in order to keep key staff, they are forced to give them a pay hike of between 20 to 30 per cent; in one extreme case it was 60 per cent. TBWA MD Neil Ducray, estimates that there are currently 70 per cent more jobs than people available. "The talent pool is just not there anymore. Expats might be the way to go but for middle level personnel that isn't the preferred route I would take," he said. McCann-Erickson Hong Kong said that it has up to 15 positions to fill because of staff leaving and new business wins. Mr Vince Viola, McCanns worldwide account director for Cathay Pacific, said: "Every time someone leaves, the replacement would have to be paid 30 to 50 per cent more or they won't come. "It's almost like the stock market now. One day an account manager is worth 'x', the next day the price changes, typically higher, to value 'y'. It's out of control and it cannot go on like this." At Bates Asia, the agency has rolled out an interactive course for all 1,000 staff regionally. To date, only 60 are taking part and Bates' regional president Jeffrey Yu said, "We are initially offering the course to loyal and senior people." When asked whether he was afraid that some of the first batch might jump over to a dotcom with their newly-acquired knowledge, Mr Yu - who is also the Hong Kong 4As chairman - said, "There is always a risk but the benefits are greater than the risks. If we don't do this, we will be left behind in the new economy."

Sign In

Trouble signing in?

Reset Password: Click here

Contact Customer Support at

Customerservice@campaignasia.com