Hong Kong's Training and Development Budgets Second Highest in Ten Years

No matter in good or bad times, corporations continued to spend on training and development for employee retention and development.

In 2013, the training and development budgets rose, according to the 2013 Training and Development Needs Survey conducted by the Hong Kong Institute of Human Resource Management (HKIHRM). With an increasing number of young people joining the labour force, training patterns advance with time to “please” the younger employees. As a result, more diversified e-learning initiatives are introduced.

Fifty-nine companies  (74.7%)  out  of  79  responding  companies  indicated  that  they  had  a  training  and development budget for 2013.

The proportion of training and development budget to total annual base salary was 3.1% on average, the second highest in ten years. It also rebounded after falling or remaining unchanged for three consecutive years. A majority of respondents (67.7%) allocated a training and development budget at 1.0% - 2.9% of their annual base salary.

“We are pleased to see increased investment in employee training and development. The latest figure of 3.1% of total annual base salary was the second highest in the past ten years. During this decade, the average budget percentage remained in a narrow range without being affected by the economic situation. Employers with vision and long-term planning will spare no effort to enhance their employees‟ job skills through appropriate training. On-the-job training is also a useful tool for employee retention. Employees who see their employers‟ willingness to invest in them will have greater intention to stay because of clearer career development direction,” says Chester Tsang, Chairperson of the Learning and Development Committee of the HKIHRM.

Training Hours
All responding companies provided data on training hours. The average number of training hours per employee per annum was 18.5 hours.

In  terms  of  business  sector,  the  hotel/furnished  accommodation  sector  offered  the  highest  number of training hours (33.2  hours),  followed  by transport/logistics/postal  services  (17 hours)  and  retail (16.1 hours).

37 companies (46.8%) out of 79 responding companies indicated their training and development budget on e-learning. Among them, 32.4% increased their budget, 59.5% kept their budget unchanged and 8.1% had their budget deducted.

Regarding the types of e-learning programmes, online training video was most preferred, used by 67.6% of the respondents. Other means of e-learning included webinar/virtual classroom (51.4%), serious game (32.4%), mobile learning - smartphone (13.5%), as well as social media and mobile learning - tablet (both at 10.8%). 

Barry Ip, Vice-Chairperson of the Learning and Development Committee, commented, “Training patterns have undergone some changes because of the newcomers in the workforce – the Generations Y and Z. Totally different from their elder colleagues, they may find classroom training not their cup of tea. These technology-savvy new generations sometimes prefer to learn at their own pace and be provided with more flexibility in terms of time and venue. Therefore, e-learning is a format designed to get their "like." This is reflected by the finding that more than one-third of the responding companies which provided e-learning increased their budget last year.”

Training Topics
46 companies (58.2%) out of 79 responding companies reported that they had a talent development programme. These programmes focused on “development of high-potential employee” (84.8% of 46 responding companies) and “succession planning” (60.9% of 46 responding companies).

The topic “ethics/conduct/corporate governance/compliance” was chosen as one of the top three most important training topics by all ranks of employees for four consecutive years. This reveals employees‟ awareness of the needs to have good corporate practices to achieve business integrity.

Key Challenges in Formulating Training Plans
The top three challenges indicated by all 79 responding companies are:

1.     Training and development priority is overshadowed by other business priorities (50.6%)
2.     Difficulties in measuring effectiveness / ROI of training programmes (50.6%)
3.     A systematic process to survey training needs is yet to be set up (40.5%)

“Human capital is an indispensable asset for every company and the key to sustainable economic development. Facing an ageing population, a low birth rate, a shrinking workforce and skills mis-match in the labour market, we are sure that training and development plays a more crucial role in enhancing the quality of our human capital, thus ensuring Hong Kong to have a high-performance workforce to meet the challenges ahead,” Tsang says.

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