Hong Kongâs unstable economy is creating significant concern inÂ the job marketâbut not every sector is impacted.
By Michael Switow
More than six months after millions of Hong KongersÂ first took to the streets in opposition to an extraditionÂ bill that would have blurred the lines of the politicalÂ and legal system that has defined the city since itsÂ return to China 22 years ago, the protests continue andÂ repercussions ripple through the territory.
Hong Kongâs economy is contracting. Retail sales andÂ tourism have slumped. One of the cityâs flag carriers,Â Hong Kong Airlines, is struggling to stay afloat.
Yet whilst the cityâs reputation as a financial hubÂ may have taken a few dings, it remains an importantÂ gateway to China. The Hong Kong Exchange was the topÂ market globally for new listings in 2019. The Hang SengÂ Index chalked up gains of more than 9 per cent, despiteÂ protests and trade tensions.
As one might expect in the face of conflicting trends,Â the environment for hiring and salaries in Hong Kong isÂ far from uniform.
Smaller Pay Increments
âThere is still active hiring but some companies haveÂ slowed down the process or put roles on hold,â says
Ricky Mui, managing director of specialist recruitmentÂ firm Robert Walters Hong Kong. âAt the same time, weÂ see talented professionals are less willing to changeÂ roles compared to prior years due to uncertainty andÂ instability of market.â
Robert Walters estimates that individuals staying in theirÂ jobs will receive salary increments this year between 4Â and 6 per cent, whilst those switching companies canÂ expect between 10 and 15 per cent increases.
ECA Internationalâs survey of Hong Kong businesses,Â conducted last year, also predicted an average salaryÂ increment of 4 per cent, but the companyâs regionalÂ director, Lee Quane, is skeptical about whether this willÂ become a reality.
âWe believe that given whatâs going on in Hong KongÂ and the industries that have been affectedâretail,Â services, tourismâitâs very unlikely that companiesÂ engaged in these sectors will be able to offer a 4 perÂ cent salary increase in 2020, especially those that areÂ focused on servicing the Hong Kong economy,â he says.
Quane adds that HR leaders should expect to see aÂ polarisation between large multinationals who deriveÂ significant revenue from outside Hong Kong and smallerÂ domestically-focused businesses. ECA International isÂ also advising clients to pay employees a location orÂ hardship allowance for postings to Hong Kong.
Media reports abound of companies shifting personnelÂ out of Hong Kong.
âSome companies have either expressed their plan toÂ move or are already relocating some of their regionalÂ headcounts to other Asian cities, such as Singapore, toÂ minimise any risk of business disruption in the longerÂ term,â notes Randstadâs Head of Search and SelectionÂ for Greater China Natellie Sun.
According to Bloomberg, there has been a rise inÂ applications from Hong Kong asset managers to openÂ offices in Singapore, whilst CNBC reports an increaseÂ in property purchases in the Lion City by mainlandÂ Chinese, to the detriment of Hong Kong.
Yet for many companies, it is not an either-or situation.Â Morgan Stanley and Nomura, for example, haveÂ announced plans to increase staffing in both cities.Â This is perhaps indicative of the health of Hong KongâsÂ financial sector.
Finance, technology, and the intersection betweenÂ the two are among the hottest sectors in Hong Kong.Â Digital banking is an area of particular growth, as HongÂ Kong issued eight virtual banking licenses last year.
âIt is not uncommon for tech talent to receive frequentÂ job interview invitations on a daily basis or multipleÂ job offers when they express interest in finding a newÂ employer,â says Sun. âBased on current market demand,Â these candidates are likely to secure a premium of up toÂ 35 per cent salary raise when they change employers.â
Companies are increasingly turning to temporaryÂ contract workers to meet these needs. âThis is especiallyÂ the case in the financial services sector, where IT skillÂ sets such as project management, infrastructure,Â application support, help desk support, and risk andÂ compliance are in high demand,â says Mui.
High-tech startups are among the companies looking forÂ talentâbut they may have to pay a premium. More thanÂ one-third of Hong Kongers would give up 10 per cent orÂ more of their salary in exchange for better job security,Â according to Randstadâs Employer Brand Research, aÂ trend that benefits more established companies.
âThere are still many opportunities in this market andÂ Hong Kong retains its appeal, especially with the much-anticipatedÂ signing of the âPhase 1â trade deal betweenÂ the United States and China,â concludes Mui. âThisÂ will inject some confidence back into the market, butÂ in a period where budgets are comparatively tight, aÂ positive workplace and corporate culture is important toÂ attract talent.â