The US-China trade war will further slow the growth of manufacturing, trade, and retail, as global business and consumer confidence is expected to decline, according to a report by Randstad. In Hong Kong SAR, service industries like hoteliers, retailers, and restaurateurs are directly impacted by the local instabilities. In addition, the unexpected political and social unrest witnessed in the second half of 2019 has adversely affected the appeal of Hong Kong SAR as Asia’s leading financial hub as well as its crowned perception as one of the world’s freest economies.
To help businesses and local citizens tide over this difficult period, the local government and several private investors have extended financial help to those affected, mainly through business loans and grants as well as individual income tax breaks.
Even though the unemployment rate remained around three percent, the labor market may continue to face the adverse impact from both the global trade war and local political unrest.
It has taken six months for the market to feel the brunt of economic impact, leading some companies to reduce their HR budgets and freeze hiring in Q1 2020, with more focus on workforce optimization instead.
On the candidate side, employees are expressing more caution, prioritizing job security and overall compensation. Hence, we anticipate talent will have less appetite to change jobs in 2020 for marginal gains.
This also means hiring managers may face more challenges when finding top talent in the market as the candidate pool would be smaller next year.
Looking beyond Hong Kong SAR
With fewer investments flowing into Hong Kong SAR, companies may put on hold any expansion plans until the market stabilizes. Many employers are also looking to relocate some regional roles to other cities such as Singapore and Shanghai to minimize business disruption. Through rapid infrastructure development and lower income taxes, the government agencies are encouraging talent flow within GBA, especially in the technology and industrial sectors. This may result in a ‘tug-of-war’ between companies and cities within the GBA when it comes to hiring in-demand talent. Cities in mainland China may seem more attractive to local job seekers as a significantly larger market can offer more exposure and growth opportunities, as well as a fast-tracked career path.
However, each city within the region has its own charm and offers unique opportunities for those who choose to venture and explore. Hong Kong SAR has a legacy of being the gateway that connects the East and West. A diverse talent pool, its position as Asia’s premier financial hub and a free economy – are some of the factors that will continue to attract businesses and investments to Hong Kong SAR.
Job seeker mobility
Candidates may be more reluctant to switch jobs in 2020, as more voiced concerns about employers’ financial ability to retain their workforce. Companies that are hiring, either for replacement roles or expansion, would need to budget more time and resources into the recruitment process.
We have seen an upward tick in the number of senior level professionals who are choosing to settle in markets outside of Hong Kong SAR. The idea of relocating to another market has become very appealing. Senior-level professionals are able to raise their family in a city that could provide a better quality of life, as they continue to develop professionally by taking on new responsibilities.
The 2019 Q3 Randstad Work monitor results echo the same, citing that 78 percent of respondents are open to the idea of relocating if it means that they can expand their portfolios while taking advantage of more progressive work-life balance initiatives practiced in other countries.
However, this may lead to a potential ‘brain drain’, creating a gap in the workforce as middle-management may not be prepared to take up leadership positions due to lack of experience, especially in large and listed companies.
Talent demand to increase in niche areas of growth
Hong Kong SAR is a skills-short market. With the increasing number of businesses setting up in the GBA and expanding their local presence, the market can expect a surge in demand for highly skilled talent, especially within the technical and professional sectors.
Experienced talent within the information technology, digital sales and marketing as well as life sciences sectors will particularly be sought-after. Candidates from other more traditional industries such as banking & financial services, retail, as well as construction & property will see moderate talent demand in 2020.
It will be increasingly critical for local talent to possess a regional or global vision if they want to stay employable and ensure career progression. This will gradually become a hygiene factor, especially when companies find it challenging to hire talent from overseas who bring with them a global commercial outlook. This challenge will be further amplified with the tightening manpower laws around the hiring of foreigners.