BEIJING – More private businesses on the Chinese mainland and in Hong Kong plan to increase pay for employees this year amid a shortage of skilled workers, a report says.

According to the latest report released by accounting firm Grant Thornton, 88 percent of the Hong Kong companies surveyed intend to raise pay for their employees this year — a jump from 55 percent last year.

Sixty-four percent of mainland companies plan to raise pay, up 20 percentage points from the previous year.

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The lack of skilled workforce is a major impediment to their development. The report shows that 37 percent of Hong Kong businesses and 40 percent of mainland businesses are facing skilled staff shortage.

In the first quarter of 2011, 42 percent of Hong Kong businesses increased their number of employees, up from 36 percent in the fourth quarter of last year.

Among the main factors constraining the growth of local businesses in Hong Kong, the lack of a skilled workforce leads with 37 percent, up by 10 percentage points from last year.

Forty percent of mainland businesses have cited the lack of a skilled workforce as a main factor hindering their growth. The number shot up by 17 percentage points from last year.

Daniel Lin, managing partner of Grant Thornton, said that the lack of a skilled workforce both in Hong Kong and on the mainland is believed to be related to China's breakneck development.

"Though the GDP growth target of 7 percent set in China's recently unveiled 12th Five-Year Plan (2011-2015) is lower than the 7.5 percent set for the 11th Five-Year Plan period, it is a very desirable rate for an economy which has been growing rapidly for many years," he said.

"Skilled workforce is indispensable in supporting China's development. That's why the mainland has drawn a great many talents from Hong Kong and from around the world in recent years. Hong Kong's economic recovery from the financial crisis has only added to the urgency of demand for talents."