Overall hiring intentions remain high in Hong Kong, despite global economic uncertainty. Although down 3.2 percentage points (pp), more than a third of employers (37.0%) intend to increase headcount this quarter, while 11.6% expect to decrease headcount (up 6.7pp). The majority of employers intend to keep headcount steady at 51.3% (down 3.6pp).
“Hiring expectations in Hong Kong remain positive and it remains a candidate-short market in many respects," says Tony Pownall, General Manager of Hudson Hong Kong. "Many Chinese companies see it as a fertile talent ground, seeking to relocate people to offset their local talent shortages. Employment is rising in order to meet higher business demands and tightening job market capacity is continuing to push staffing costs upwards."
Pownall notes that new business demand from mainland China recently reached a 15-month high while the key underpinnings of Hong Kong’s domestic demand resilience remain firmly in place, which is positive for hiring.
"Many internationally-focused businesses remain understandably cautious due to external factors, while local and regional businesses seem to have a greater appetite to grow headcount,” he adds.
IT&T is the industry driving the increase in positive hiring intentions, up 11.3pp to 62.5%, and is the most positive industry overall. This is followed by Consumer (down 7.7pp to 41.7%), Manufacturing & Industrial (down 10.8pp to 37.9%) and Banking & Financial Services (down 0.5pp to 27.3%).
“Hiring in IT&T is being driven by demand from businesses seeking to improve both efficiency and profitability via technology and more effective data management. Restrictions around permanent hiring among some MNCs are resulting in increased demand for vendor services and outsourcing of core IT functions,” said Pownall.
Pownall says that the drop in consumer intentions reflects that while there are more mainland visitors to Hong Kong than last year, they aren’t buying as much as they used to.
“Contracting roles are also slowly growing in acceptance. Historically, high housing and healthcare costs and cultural status issues have driven a preference for permanent roles. Contracting is still not widely accepted as a lifestyle choice as it is in other markets. However, this is beginning to change,” adds Pownall.
The Employment Trends Q1 2013 report also looked at organisations’ top HR priorities for 2013. More than a quarter of all employers (28.4%) highlight retaining staff as their organisation’s highest HR priority for 2013, followed by staff development (20.9%), attracting suitable staff (18.5%), enhancing performance/productivity of existing team (12.2%), restructuring/right-sizing (11.6%) and developing leadership capabilities (5.1%).
Meanwhile the Salary & Employment Insights 2013 report shows that the shortage of skilled professionals in Hong Kong has made the region a ‘candidate market’. The most talented people are consistently in demand and generally have multiple opportunities to consider at any given time. Expectations for salary increases remain high and the report shows that candidates now place greater importance on career development, training and secondment opportunities, health benefits and bonuses.
The candidate-short market also increases the likelihood of people withdrawing from the recruitment process, with the talent shortage putting Hong Kong employers more at risk. Both employees and employers expect candidates to drop out of the recruitment process, even after the recruitment process has been completed.
More than two in five (44.2%) employees believe withdrawing after signing a contract is acceptable if a better salary or opportunity is offered elsewhere, while more than half (53.9%) of Hong Kong’s employers have experienced a candidate withdrawing after an offer has been made. More than two-thirds (67.9%) of Hong Kong employers expect candidates to pull out at some stage of the recruitment process and nearly 16% say that the incidence of withdrawal is increasing.
Pownall emphasises the high cost of losing good candidates during the recruitment process: “The opportunity cost during the time the position is open, loss of productivity and even frustration can negatively impact business results and team morale,” said Pownall. “The employer brand may also be damaged as a result of having to re-advertise the role.”
The Hudson Report: Employment Trends Q1 2013 report shows that staff retention is Hong Kong’s top HR priority, and signals that employers are very aware of the challenges of securing the right talent.
"These challenges are exacerbated by skills shortages and difficulty in securing headcount approvals,” said Pownall.
Whether before or after an offer has been made, the Salary & Employment Insights 2013 report identifies that remuneration is still the most important recruitment consideration for candidates, followed by better alternative opportunities and the quality of fit with the company culture.
However, the report also reveals that employers could do much more to reduce the risk of candidate withdrawal and give them the edge over competitors.
Over two thirds of professionals (69.5%) think the recruitment process is ‘average’ in helping them learn about their potential new employer, while less than a quarter of people believe the process to be highly informative.
Almost three-quarters of professionals (73.7%) who do not feel the process is informative withdraw their application from the recruitment process.
“This clearly indicates that employers should focus on some key areas to improve the value of their recruitment process, including streamlining and shortening hiring processes, improving communication with candidates to engage them at an early stage and being open and honest about salary and other benefits," said Pownall.