Employers set to slash job growth in the second half, the Hudson report on employment trends shows
The proportion of hiring managers who are planning to take on extra permanent staff has slumped by 26.6 percentage points since the start of the year, the latest Hudson employment trends reports shows.
Just 25.5 per cent of hiring managers in Hong Kong expect to increase their headcount of permanent employees in the second half of 2015, compared to 52.1 per cent in the first half, when hiring sentiment – or the intention to take on new permanent staff – reached a four-year high.
The Hudson Report: Employment Trends, which was released on Tuesday July 14, is based on a survey of 300 hiring managers across Hong Kong’s key economic sectors, who were interviewed last month.
Hiring intentions for the second half are also down by 22.3 percentage points compared the same period last year, when 47.8 per cent of employers expected to increase headcount, as Hong Kong hiring managers demonstrate a more conservative outlook.
However, prospects for the next six months are not all negative, as managers are shifting their focus from expansion to maintenance of existing staff numbers. Some 60 per cent of hiring managers aim to keep their headcount steady in the second half, compared to 43 per cent in the first half – a rise of 16.9 percentage points.
“The net hiring sentiment of companies wanting to expand has gone down,” says Siddharth Suhas, director at Hudson Hong Kong & Guangzhou. “However, because there has been a significant amount of hiring that has gone on through the year, 60 per cent of companies are still looking to maintain headcount.”
Weaker exports and moderate domestic growth in the first half of the year, coupled with the slowing Chinese economy and an unstable euro zone, mean analysts predict Hong Kong’s economic growth will remain moderate in the second half of 2015. These factors affect sentiment about the future of the economy and what companies will be able to achieve, leading to a more conservative attitude to hiring.
“Employers today are confident but less buoyant than at the start of the year,” Suhas says. “The last time we saw such a strong hiring sentiment was in Q3 2011, when intention to hire reached 60.1 per cent, so today’s result is more reflective of the current market.”
Suhas says that those who are hiring are doing so tactically to boost their bottom line.
“These strategic hires are basically in revenue generation roles [and] business development relationship management roles, and largely focused on people who have strong regional or local relationships with investment banks as well as insurance and asset management firms,” he says.
By industry, the professional services sector has the strongest hiring intentions for the second half, with a net 36.7 per cent of employers in the sector looking to increase headcount.
In the banking and financial services sector, 29.3 per cent of hiring managers are looking to add staff. The growth is largely coming from risk and governance functions because back office or operations roles are increasingly being outsourced to cheaper locations around the globe.
However, within local and Chinese banks, there has been significant growth in frontline and sales-related positions. “They have been quite insulated from what has been happening with the global economy, so they continue to grow and drive growth for financial services within the HK market,” Suhas says.
While the consumer and retail sector has the lowest hiring intentions by industry, a rebound within this sector is in sight, Suhas says. “Although consumer and retail is uncertain on interactions and engagements with clients, this is recovering,” he says.
The Hudson report also looked at the use of social media in screening potential hires, and found that 46.4 per cent of hiring managers have checked a candidate’s social media profile. Of these, 98.5 per cent have gone to LinkedIn to review a profile, while 30.6 per cent have gone to Facebook and 11.9 per cent to GooglePlus.
“Social media has taken all our social engagements online,” Suhas says, adding that the best policy with regards to social media not to post something if one is in doubt about it.
This article appeared in the Classified Post print edition as Employers slash hiring plans for second half.