Hong Kong reels as salaries spiral 'out of control'

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