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Employers 'try before they buy'

Published on Friday, 05 Mar 2010
People queue for a walk-in interview in Hong Kong. As the economy recovers from recession, companies are increasingly turning to hiring staff on short-term contracts lasting from one month to a year.
Photo: Martin Chan

While Hong Kong's job market has begun expanding again after a year of contraction, a fundamental change has occurred in the nature of jobs available, with companies becoming increasingly inclined to hire contract staff.

A salary survey by recruitment firm Robert Walters shows that the recruitment market has had a good start this year, with more middle-to-senior-level appointments being sourced.

Matthew Bennett, managing director of Robert Walters Hong Kong, says many companies are now looking to fill vacancies because they are unable to cope with renewed economic growth after cutting staff and freezing hiring. He expects salaries to increase by 8-10 per cent for top-achieving staff.

But it is unlikely that employment will fully recover to pre-recession levels before the end of the year. "Although we are in a period of recovery, I still think it will be a cautious recovery," Bennett says.

A lasting impact of the recession has been the shift in the nature of jobs. Many of the new jobs being offered are based on short-term contracts that last anywhere from one month to a year.

Sommer Owens, contract division manager at Robert Walters, says there has been a seven-fold increase in the number of contract positions compared with a year ago. "It's become an accepted part of business. Companies see it as giving them flexibility, a middle ground between hiring permanent staff and not hiring at all," she says.

The conditions of short-term contracts vary, Owens says. Some offer nearly all the benefits enjoyed by permanent staff, such as health insurance and a pension plan, while others treat contractors more like freelancers, who typically receive no benefits at all.

She says employers like to be able to "try before they buy". "Firms will take a contractor that they would not normally offer a permanent job to. It gives them a foot in the door," she says, adding that by taking up a contract position job-hunters may gain access to opportunities. they wouldn't otherwise have.

But not all contracts are created equal, so people who are thinking of taking up a contract position should be aware of the terms and conditions.

Winnie Ng, head of employee practice at law firm Minster Minter Ellison, employment practice, says that an employee who is continuously employed for more than four consecutive weeks and at least 18 hours a week is entitled by law to minimum statutory benefits. granted by the Employment Ordinance.

They should make sure that they are receiving all the benefits they are entitled to, including annual leave, holidays, sick leave and allowance, and maternity leave. They should also ensure that the contract is for a fixed term to avoid dismissal during the contract period.

Contract blues

Flexibility offered by a contract position may come at the expense of job security.

Tiffany Cheng, 25, was hired two years ago to be a graphic designer at a multimedia start-up. Her contract was for one year. It was extended for three months and then for another four months.

But there was little incentive to commit to the job. “You always worry about the contract and wonder ‘do I need to start searching for jobs?’. You won’t have a good portfolio if you can’t
get your projects done before the contract ends,” she says.

Her final contract was not renewed and she now works for a university – also on contract.


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