Hong Kong's Training Budget Unaffected Amid Economic Uncertainty

Despite the challenging business environment, employers remained committed to investing in talent development while leadership training is the most important target to ensure corporate sustainability. These are the major findings of the 2012 Training and Development Needs Survey by the Hong Kong Institute of Human Resource Management (HKIHRM).


A total of 128 companies, employing over 140,000 full-time employees, joined the 2012 survey conducted during the period from July to August 2012.


102 companies (80%) out of 128 responding companies indicated that they had a training and development budget for 2012. The proportion of training and development budget to total annual base salary was 2.7% on average (reported by 86 companies), same as last year’s figure. The transport/logistics sector allocated the highest budget (6.2%). The construction/real estate/property development sector reported the lowest budget (1.4%).


“Although business prospects are currently uncertain under a volatile economy, the survey results revealed that companies were still investing in training and development of employees," says Francis Mok, President of the HKIHRM and Co-chairperson of its Learning and Development Committee. "This is a strong indication that companies in Hong Kong see the important relationship between sustainable business success and employee training and development."


Mok adds that with a very low unemployment rate and a persistent shortage of talent in Hong Kong, companies investing strategically in human capital development pave the way for long-term business success and build their employer brand to attract and retain talent.
Training Hours

Among all responding companies, 102 companies provided data on this area. The average number of training hours per employee per annum was 19.1 hours this year, similar to that recorded in 2011 (19.9 hours). 84.3% of respondents indicated that their employees received on average more than five hours of training per annum.


The banking sector provided the highest number of training hours (25.6 hours), followed by business services/professional services (19.3 hours), and wholesale, import/export, trading/sourcing sectors (18.7 hours).


Training Topics

Ninety-one (71.1%) out of the 128 responding companies reported that they organised a talent development programme. Talent development programmes continued to focus on “development of high-potential leaders/managers” (83.5% of the 91 respondents) and “development of high-potential employees” (70.3% of the 91 respondents). “Ethics/conduct/corporate governance” remained one of the top five important training topics for all levels of employee.


Hong Kong is facing the challenge of a shrinking workforce with a retirement wave of baby boomers and a low birth rate.


Many baby boomers hold critical positions in their companies. Their forthcoming retirement makes succession planning a more pressing need for their employers, as a shortage of effective leadership may ultimately jeopardise business growth.


"Effective talent development programmes help unleash employees’ potentials to enhance the quality of human capital, and demonstrate a long-term commitment to employees’ career development and to grow and retain talent," says says Chester Tsang, Co-chairperson of the Learning and Development Committee of the HKIHRM. "This applies particularly to Gen Y who will be the major pool of talent now and in the coming decade,” 

Application of Mobile Learning
This year, mobile learning was included as one of the survey topics for the first time. Nearly all (98.4%) of the 127 responding companies indicated that they did not have a budget for mobile learning.


Meanwhile, the top three challenges in formulating training plans are: the need to solicit full support and championship from management (50%); training and development priority is overshadowed by other business priorities (43.5%); and uncertainties of business prospect and training needs with the economic situation (38.7%)


According to Mok, during the economic slump from 1997 to 2004, some companies over-used training budget cut as a cost-saving measure. "As a result, when the economy bounced back in 2005, they found themselves lack the human capital to capture the rebound opportunities, thus losing their competitive edge to competitors who had better human capital reserve. Some of them could not survive in the new economy."

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