The effects of a post-pandemic talent shortage in Hong Kong are being compounded by accelerated demand for tech talent, global competition for skilled professionals, and an exodus of talent over the last few years. Key findings from the digital Salary Survey 2023 by Robert Walters, the world-leading specialist professional recruiter brands under the Robert Walters Group, show that more than 80% of employers are concerned or very concerned about a skill/talent shortage, while 75% predict the most acute talent shortage will be among mid-to-senior level employees.
Hong Kong Overview
2022 was a challenging year for the Hong Kong recruitment market. It was typified by a supply-demand imbalance – the candidate market continued to shrink whilst many companies were trying to fill replacement and new positions. Many mid-to-senior level professionals, who make up the core working groups, and junior staff have relocated abroad over the past few years, although the rate of departures slowed down in the second half of 2022. The professional services sector, which traditionally employs more expatriate professionals, has faced the biggest hit as relocating expats have taken some headcounts overseas. The tech talent pool has become limited too, as tech professionals possess skills that are transferable globally. As a result, the market was very candidate-driven; compensation packages and title were inflated, and counteroffers became the norm.
Technology remains the bright spot for hiring in 2023
With a global recession a legitimate fear, many global banks and financial firms will put hiring plans on hold. This will alleviate some of the supply-demand imbalances we have seen over the past 18 months. Nevertheless, demand for tech talent is expected to remain very strong across all sectors. There will be a strong demand for cloud and cybersecurity talent as companies are planning to establish security operations centres in Hong Kong. There has been a greater emphasis on customer experience in recent years, leading to the introduction of more automation and streamlining projects, and driving the demand for skilled and experienced talent across both permanent and contract roles. At the same time, the growth of e-commerce should increase demand for positions such as business analyst and product manager in 2023.
Findings show that 75% of tech professionals are optimistic about job opportunities. Tech talent moving between jobs can expect a salary increase of 10-20%. For senior job movers possessing in-demand or niche skill sets, salary increments could be as high as 40%.
Demand for ESG and D&I-related roles soars but talent is in short supply
Many companies have strengthened their investment and commitment to ESG during the pandemic. Purchasing decisions are increasingly being made with social issues in mind. Companies have had to focus not only on the quality and cost of their products and services, but also on establishing sustainable, socially responsible and environmentally aware business practices in order to win and retain customers. The increase in ESG and D&I-related professional vacancies in Hong Kong reflects this trend. The expectation is that hiring will continue to increase senior positions, showing that these considerations are no longer a simple tick-box exercise but are becoming a critical part of operational strategy.
Call for contractors to ease skills shortage
Candidate shortage, market fluctuation and rising demand for projects are the reasons why more companies are seeking contractors to fill business-critical and time-sensitive vacancies. Contract hiring is likely to increase across tech, financial services and commerce sectors with employers looking for a more flexible workforce as business conditions change. It is also expected that a significant number of tech professionals will continue to prioritise interesting project work over the stability of permanent opportunities, for the chance to gain more technical experience and enjoy job flexibility.
Employee retention becomes key in 2023
With addressing skills gap and talent shortage top of the agenda, companies are feeling mounting pressure to retain employees. 95% of employers stated that employee retention will be a concern for their companies in 2023, especially among managerial and senior level positions. However, only 65% of companies have proactively put measures in place. The most adopted strategies include hybrid work policies (60%), improved learning and development (50%), increased wellbeing initiatives (48%), promotion outside of the normal cycle (45%) and pay reviews outside of the normal cycle (38%). Companies are also looking at investing in up-skilling their existing employees in agile methodologies and new technologies.
To ease the skills gap and expand the talent pool, companies are advised to adapt their talent strategy to “skills first” to ensure they find, develop, and retain qualified talent; this contrasts with the traditional practice of hiring managers focusing on candidates’ experience and education background.
Talent’s changing expectations beyond the paycheck
At the same time, 7 in 10 candidates in Hong Kong stated that job security has become more important to them in the face of a potential recession and the rising cost of living; 43% of them will seek a new role if employers do not offer a pay rise above inflation over the coming year.
John Mullally, Managing Director – Southern China and Hong Kong, Robert Walters says, “No industry was unaffected by the shrinking of the candidate pool in Hong Kong. Financial incentives are an immediate way to address the issue, but it is not sustainable in the long term. If employment costs climb too high, it also reduces Hong Kong’s competitiveness as a business hub. Ultimately the business community and the government must work together to market Hong Kong to the world. Hong Kong has an opportunity now to get back on the front foot with its significant historical, infrastructural, and geographical advantages.”