HK Faces Double Workforce Whammy

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More Hong Kong employees are leaving Hong Kong.

Over 62,000 people left the city in the first half of June 2022, which is higher than the 50,000 in the first half of March, according to the Hong Kong Immigration Department.

Hong Kong is losing not just people but also valuable talent, experience, and know-how.

And when you add the global trend of the Great Resignation, Hong Kong employers face a double whammy in workforce management of pandemic proportions.

Mobility becomes a major trend

“There is definitely a trend of staff mobility,” said Sue Wei, managing director of Hays Hong Kong

In addition to an increased outflow of talents, Wei observed that many companies are also making up for the headcount freeze from the last two years as the economy recovers. Hays earlier this year reported that 45% of Hong Kong companies are planning to increase their headcounts in 2022.

Hong Kong is also not immune to the Great Resignation, where a large part of the workforce is now resigning for other jobs or simply staying at home. “The Great Resignation reflects the awakening of balancing work and life. It is a global trend, and it is very real in Hong Kong,” added Mark Tibbatts, managing director of Hong Kong and Taiwan at PageGroup.  

Tibbatts said the rising appreciation for work-life balance plus the city’s strict COVID-19 measures for border restrictions are prompting many, particularly in the expatriate community, to review their work locations and move closer to their families abroad.

“Many are taking with them their relationships and experience, and we can’t really replace them easily,” he added. “It is relatively easy to leave the city now, but bringing talents in is challenging.”

The migration is creating demand for local talent and exposing shortages. Tibbatts pointed out that there were many job openings for Hong Kong people. Wei added that with the city being a financial hub, more of these openings were found in the financial services industry. “But we are also seeing the consumer and retail sectors shifting their expats out of Hong Kong,” she added.

Flexibility takes top priority

With the rise of workforce turnover and digitalized operations, Hong Kong employers are opening up to new ways of working.

Wei said that more companies are considering having their talents work outside of Hong Kong if the legal and tax status allows it. Some employers are even promoting their mobility programs or allowing potential candidates to choose their preferred working cities at the interview stage.

“(Hong Kong) employers are having a hard time to find talents locally,” she said. “They are opening up the roles to candidates within and outside Hong Kong.”

Although only a small portion of companies offer remote working as part of the package, Wei said COVID-19 was a significant accelerator for local employers to enable flexible working — regardless of the daily hours, days in a week, and the location within or outside the country of hire.

Meanwhile, some companies are taking advantage of the wave of migration to review their workforce planning. Tibbatts noted that some employers, particularly in the aviation industry, are replacing the outgoing high-paying talents with lower-cost ones with similar experience.

Extreme times

Tibbatts predicted the current HK challenges would be short-lived despite the brain drain.

“To some extent, some (of the emigrated talents) will come back because the idea of working in the U.K. or Canada is very different, and it’s very difficult to save money to get ahead financially,” he said. “There are not many places with a tax rate lower than 50% of their income, particularly at the peak of their earning period.”

The tax and labor laws in other countries also limit local employers from remote working from overseas. He added very few roles could support remote working and do not require physical presence, particularly for managerial positions. This has prompted some employers, like Elon Musk, to remain stringent about remote working.

Tibbatts said local employers are offering additional flexibility to deal with the unprecedented border restriction.

“(Remote working from overseas) is only a temporary arrangement to mitigate the trend, but it won’t be a long-term solution,” said Tibbatts. “We are seeing extreme things happening as we are in an extreme scenario.”

Focus on EVP

Tibbatts suggested employers focus on retaining their existing workforce to fight and win the war of talent long-term.

The first and easiest thing to do is review the existing workforce's salary packages and ensure they align with the market rate. But more importantly, employers should listen to and understand the increasingly diverse opinions within the workforce.

“There is a lot of uncertainty in Hong Kong, and it is [pushing] people into polarized thinking,” Tibbatts said. He suggested that employers should proactively listen to and understand the diverse opinions in their workforce. It means being more innovative when engaging with the workforce, such as proactively listening to the younger workforce or enabling policies that promote diversity, equality, and inclusion (DEI).

Wei from Hays added that the call for better diversity within the workforce means employers should understand individual needs instead of putting “employees into brackets.” For example, some Gen Zs expect their employers to offer learning and development opportunities for their next job, while others demand meaningful purpose.

“The employee value proposition (EVP) of the company needs to be very clear,” she said. “They need to define their values so people understand where you stand and how you are different from the competitors.”

“Focus more on retention than recruitment. Hiring new talents is simply the medicine, not a cure for the long-term,” Tibbatts concluded.

Sheila Lam is the contributing editor of DigitalWorkforceTrends. Covering IT for 20 years as a journalist, she has witnessed the emergence, hype, and maturity of different technologies but is always excited about what's next. You can reach her at [email protected].

Image credit: iStockphoto/bedo