In predicting employment trends and prospects, HR professionals and employees know that forecast salary levels for the year ahead tell them more than GDP figures, trade statistics and economic data ever can.

The likely pay rises – or lack thereof – for job types and various sectors offer a snapshot of which skills are most in demand. It is then possible to make broader projections on the general health of specific industries and plans for recruitment, incentives and training.

In this respect, Aon Hewitt’s latest “Global Salary Increase Survey” offers valuable insights. Overall, the findings show that Hong Kong employers continue to exercise caution in budgeting pay rises for 2014. But they are also fully aware of the need to maximise the value of total rewards in order to retain good staff in an increasingly active job market, where competitors are ready to poach talent.

Feedback points to average rises for next year of 4.8 per cent, up from 4.6 per cent in 2013. But the backdrop is one of greater economic stability, meaning that the trend now sees salary adjustments pushing ahead of rises in the consumer price index – which stands at 4.1 per cent for the year to date and is forecast to fall to around 3.8 cent during the next 12 months.

Organisation performance continues to drive salary reviews, with 91 per cent of HR practitioners surveyed citing it as the main consideration. Competitive positioning, expansion plans and inflationary pressures, however, are all becoming a bigger part of the equation.

“Firms are cautiously optimistic and willing to invest,” says Tzeitel Fernandes, head of Aon Hewitt’s broad-based rewards and executive compensation consulting practice. “Performance differentiation continues to be the key, with high performers receiving higher variable pay, as well as higher increases in base pay.”

Hong Kong results show that the chemical sector plans the largest average pay rise – 5.2 per cent – reflecting a global trend. Health care and medical services, construction and engineering, and retail also project 5 per cent salary rises or above, a sign of the talent need. With an ageing population, major infrastructure investment, and inflow of tourist cash, demand is unlikely to slow.

Fernandes notes that the lowest 2014 pay rises are expected in transport and logistics, an area directly hit by China’s limited export growth, and high-tech business, where firms are inclined to move hub operations to less costly areas in view of rising property prices.

Another factor is a potential labour shortage for professional and semi-skilled posts in construction, hospitality and travel. Employers may offer better-than-average salaries to attract talent in start-ups or newer industries.

“From the broader perspective, HR professionals have to look at effectiveness and targets achieved [when deciding rewards],” says Gary Chin, senior consultant at Aon Hewitt. “They also need to be more innovative to retain talent and make their organisations more competitive. The norm for HR is still to benchmark against the market, but they should be looking to find an edge.”