A human resources consultancy on Wednesday said Hong Kong has fallen three places to eighth position in its global rankings of the costliest places to employ expatriates, despite a slight recovery in salary and benefit packages.

ECA International surveyed over 10,000 expat workers from 300 multinational companies in 160 countries or regions in the third quarter last year, and found that Hong Kong now lags behind neighbouring markets such as Japan and South Korea.

The survey showed that average expatriate pay packages in Hong Kong rose to US$283,000 last year, US$3,800 more than in 2020, but the growth rate was the lowest in Asia.

It also found that the UK has reclaimed its status as the world's most expensive location, with the average expat pay package costing US$440,000.

Lee Quane, ECA International's regional director for Asia, said while cash compensation packages rose by 4.5 percent in Hong Kong, the city still fell behind a 9 percent increase in the region.

Quane said the drop in ranking has to do with anti-epidemic measures such as border restrictions.

“The more the rest of the world opens up, returns back to some semblance of pre-pandemic level in terms of freedoms, then obviously expatriates in Hong Kong will obviously live elsewhere and be less inclined to stay,” he said.

He added that companies would have to offer better salaries in order to retain overseas talent.

"Companies use salaries and benefits as a means of attraction or retention. If companies do need to encourage people to come back to Hong Kong, then... they may have to pay higher salaries in order to attract people to do so."