Crisis and Opportunity in Hong Kong

Hong Kong

How HR leaders manage during a time of uncertainty.

By Michael Switow

Petrol bombs, flight cancellations, road blockades, train suspensions, tear gas, and water cannons. Millions of Hong Kong residents have taken to the streets to protest peacefully, but violent images from the city’s “season of discontent” have unnerved the public and shaken business confidence.

The protests have presented HR leaders with new challenges. Top of the list is ensuring the safety and mental well-being of employees, though the economic impact of social discontent also weighs heavily on companies.

Business largely goes on as normal, but as one HR industry veteran who requested anonymity puts it, “It’s totally impossible to have our minds cleared from the chaos happening every day.”

“Look, nobody knows what the future holds,” adds Michelle Loong, the head of talent acquisition and development at luxury goods retailer Richemont, which has 2,000 employees in Hong Kong. “We prepare for the worst and hope for the best.”

Safety First

Richemont has created a special hotline for safety and security issues to support its employees in this chaotic time. It regularly reminds staff that third-party counsellors are available to provide emotional and mental support. Counselling can be done anonymously or face-to-face, via WhatsApp, over the phone, or even via a customised app. Senior management is also making more visits to the company’s boutiques to encourage and reassure retail staff.

At times, though, the upheaval associated with the protests strikes particularly close to home. One Sunday night following hand-to-hand combat between police and activists, there was “a lot of very vivid imagery on social media that almost everybody saw,” recounts Charles Caldwell, the head of human resources at the English Schools Foundation (ESF), which runs 22 schools in Hong Kong and employs as many as 4,500 people.

The fighting was inside the train station immediately next to ESF’s office, and when staff came to work the next morning, the entrance to the station was still closed. Caldwell’s team immediately called for an employee briefing and arranged for a counsellor from the company’s externally-run employee assistance programme to chat with staff, providing them with skills to cope with the current situation.

“We’re trying to focus on business as usual, but at the same time we need to be mindful that employees and students may be experiencing stress,” Caldwell says. “Until we know what that ultimate outcome will be, it’s like a constant ‘chipping away’. Over time, this can be a lot for employees to take on. I’m constantly monitoring—what’s the tipping point where it just becomes a little bit too much and starts impacting people from an employee engagement perspective?”

Crisis Management

Several weeks after the start of the protests but prior to the start of the school year, Caldwell activated ESF’s crisis management team. It meets twice a day to monitor and discuss any disruptions that might affect the safety of the staff and students, both at work and in transit. Contingency plans have also been put into place in the event that staff cannot make it to work due to a disturbance near their home.

ESF and Richemont also promote flexible and remote working hours subject to the permission of an employee’s line manager. But sometimes, getting people to take advantage of this flexibility is a challenge.

“It’s very easy for someone to want to be a good, hardworking employee and sludge their way into work, but sometimes they need to be reminded not to put themselves at risk,” Caldwell says.

Not every company is so understanding. Some, faced with absenteeism, particularly by younger workers, have instituted new guidelines about reporting to work. One accounting firm, for example, requires staff to file a brief account of why they missed work on their first day back in the office.

Political Tensions

Another issue of which Hong Kong companies need to be cognisant is the possibility of tension between employees who have different political views or backgrounds. Many companies report that their staff keep personal views out of the office, but when politics does creep in, opinions can become polarising.

A number of professionals from the mainland, meanwhile, are rethinking their relationship with Hong Kong. “It is obvious that Chinese colleagues from the mainland are scared at the recent news of riots on the street and in the MTR,” says one HR professional who requested anonymity. The South China Morning Post reports that some mainlanders are considering returning to China, whilst others contemplate sending their children back home for schooling.

Impact on Hiring

For the first time since before Hong Kong’s return to China 22 years ago, Fitch Ratings downgraded the city’s credit rating in September. The move makes it more expensive for the Hong Kong government—and companies tied to it—to borrow money. It’s also a sign of the economic impact that the protests have had on the territory.

Recruitment is slowing and some companies report a sharp decline in the number of resumes received. Many firms are also keeping expenses in check as sales drop or clients become more conservative. Hiring, salaries, and bonuses are being affected as a result.

However, a slowdown for some is an opening for others. “We’re taking this opportunity to invest in people and at look at key strategic hires,” says Loong. “What we’re doing is much more forward-thinking. We’re doing a lot of talent development plans internally to give people reassurance, whilst externally, we see a future talent pipeline. We’re trying to change the current environment into a positive one.”

Posted October 29, 2019 in Risk and Compliance

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