HR can earn an advantage when understanding the living preferences of the younger generation.
By Michael Switow
For organisations looking to hire millennial talent, which Asian cities are the best -and worst -places to base company operations?
Singapore, Tokyo, and Hong Kong are the most welcoming cities in Asia-Pacific for millennials, according to a study by consumer research firm ValueChampion. New Delhi and Mumbai tied for last place in the survey of twenty major cities.
“Singapore is the best city for millennials seeking to build a career and enjoy a great quality of life,” explains ValueChampion senior research analyst William Hofmann. “Our analysis indicates that Singapore’s thriving economy provides strong job opportunities for young people. Admittedly it’s not the most affordable place. It ranks in the middle of the pack when you adjust for GDP per capita. But it ranks number one for quality of life.”
Singapore’s spot at the top of ValueChain’s study will not surprise students of the city-state. The island nation, which celebrates its 54th anniversary this year, consistently wins the gold medal in global surveys like HSBC’s Expat Explorer and ECA’s annual location ratings. Singapore has occupied the top spot in ECA’s liveability rankings every year since the survey began in 2005.
“Singapore once again remains the most liveable location in the world for expats relocating from elsewhere in East Asia,” says ECA International regional director Lee Quane. “A number of factors make Singapore the ideal location, including access to great facilities, low crime rates, good quality healthcare and education, as well as a large expat population already living.”
Some analysts warn, though, that recently announced policy changes tightening the proportion of foreign workers a firm can hire may affect Singapore’s attractiveness.
Millennials Are Keen to Relocate
Hofmann’s interest in determining the best places for millennials to live was sparked by a 2017 World Economic Forum study indicating that four out of five global youth are “willing to live outside their country of residence in order to find a job or advance their career.”
ValueChampion’s survey analysed publicly-available data from The World Bank, The Economist, and other sources to compare youth employment opportunities, living costs and the quality of life in each city.
“We tried to factor in considerations that young people might have,” says Hofmann. “We expect millennials want to live in a city with job prospects and where they can advance their careers. They also want it to be a liveable place, which is why pollution, safety, and healthcare are important.”
Indian cities fared poorly in the ValueChampion rankings, due to high unemployment and bad pollution. Unemployment hit nearly 7.4 per cent in December, according to the Centre for Monitoring the Indian Economy. Government figures put unemployment at 6.1 per cent. Either way, it’s the highest rate since the 1970s and bodes poorly for millennial job prospects.
“Companies will often need to provide a financial incentive, what we refer to as a location allowance, to encourage an employee to move to locations that are further down in the rankings,” advises Lee.
China’s Most Attractive Cities
Guangzhou ranks highest among Chinese cities on the ValueChampion list. The average resident spends less than a quarter of their income on rent. If it wasn’t for costs, Beijing and Shanghai would likely rank higher. Shanghai is the top Chinese city in ECA’s poll, but it places less emphasis on living costs.
“Chinese millennials -particularly those with the best talent, skills and education -mostly prefer the big cities, like Guangzhou, Beijing, Shanghai, Shenzhen because there are more opportunities. These cities are cosmopolitan with a lot of international talent and new ideas, and they can keep up with the latest changes in the market here,” says Career International President and CEO Guo Xin. “But the cost of living in Beijing and Shanghai is skyrocketing, particularly housing costs, and it’s just too steep for many new graduates.”
In Shanghai, for example, rents have been pushed up recently as landlords sell off apartments in advance of a proposed new property tax that is slated to begin next year.
High prices are leading many youth to look to outside the biggest cities, though it’s not just the cost of living that is driving them to regional centres like Chengdu, Hangzhou, and Xian.
“These cities have a lot of policies to attract talent,” Guo notes, “including incentives for jobs, housing, and assistance to new residents. The quality of life is getting better there as well. Transportation is not as jammed as in the big cities. Plus, in Beijing and Shanghai, it’s even hard to buy your own car because of the local city regulations.”
The trend towards second- and third-tier cities is guiding corporate expansion plans. Career International’s newest office, for example, recently opened in Changchun, a provincial capital with a population of more than seven million in the northeast of China. Businesses are also being proactive in making efforts to attract talent to the Chinese provinces.
“In terms of effective approaches that we are taking to attract and retain talent in growth cities, we help the whole family settle in so that the employees will feel a stronger sense of belonging to the company,” He XinYing, the director of human resources at Shanghai-listed UE Furniture, told Mercer in response to a survey.
In that survey, People First: Driving Growth in Emerging Megacities, Mercer explores gaps between what employees value and what companies think people value when deciding whether to migrate or switch jobs. Among the conclusions: The top two factors for millennials when deciding whether to move cities are life satisfaction and safety and security. Employers, though, place more on career and job opportunities.
Mercer polled 7,200 people and 577 employers from 15 mega-cities, each with more than U.S.$4 billion in annual foreign direct investment and populations of at least three million. All four Chinese cities in the survey -Chengdu, Hangzhou, Nanjing, and Qingdao – scored relatively well in terms of meeting employee expectations.