Hong Kong came 16th on Grant Thornton’s Global Dynamism Index (GDI) 2013, which ranks 60 of the world’s largest economies across five areas of “dynamism” – defined as changes in an economy which are likely to lead to a faster future rate of growth. In Asia-Pacific, China, Singapore, South Korea and Malaysia all finished higher.
Hong Kong’s highest scores were for its business operating environment, while its joint lowest came both in science and technology and, most worryingly, labour and human capital.
Daniel Lin, managing partner at Grant Thornton Hong Kong, explains why the latter factor is so significant. “People drive businesses and human capital takes the longest time to develop. You can change the government and policy tomorrow, but adjustments to the education system can take decades to take effect,” he says.
Given that this is the first year that Hong Kong has been surveyed for the GDI, it is difficult to know whether its performance is improving or worsening. The latest local official unemployment statistics, however – which, from May to August, remained steady at a seasonally adjusted rate of just 3.3 per cent – are also causing concern, no least for Peter Yu, general manager and director for Hong Kong at Randstad.
“The tight labour market directly impacts the ability of companies to fill graduate training programmes, increases leadership and management change, and affects growth planning, competitiveness and more,” Yu says.
He adds that an imbalance in supply and demand in the labour market is due to a range of issues. “These include labour-market flexibility, government policy, economics, culture, and indeed, education, including the likes of corporate training and development programmes and professional vocational training,” he says.
Lin believes that employers who fail to develop the skills of their staff are a more significant part of the problem than an underqualified talent pool.
“In Hong Kong, we have over 17,000 students graduate a year. There are also a large number of graduates from overseas universities that return to Hong Kong. Overall, therefore, there is in the region of 20,000 graduates a year on the market for local employers to choose from. There must be good people [to choose from] among these graduates, many of whom are from top universities in Hong Kong and around the world.”
Once local employers have found the right people, the challenge then, Lin says, is to “engage, train and retain them”.
He also believes that it would be highly beneficial if there was a more open-minded view of the abilities that Hongkongers have. “If the economy was more diverse and not so focused on industries such as property, financial services and retail, there would be more opportunities for those whose skills don’t fit these categories. It’s not easy for people interested in, say, the creative industries, to find a job,” he says.
Lin recommends that businesses employ a more diverse workforce in terms of gender and background. They should also hire and train talented people whose qualifications may not perfectly fit the positions available.
Companies can still import the skills they need, a situation helped by the fact that Hong Kong is still an appealing place to which to relocate.
“Oversees talent is still interested in moving to Hong Kong not only because of its diverse culture, English-friendly environment, strong service sector, above-average salaries and low income tax rates, but also because it is seen as a good entry point into Asia,” Yu says.
However, the city is not for everyone, he adds. “The soaring cost of accommodation, the lack of affordable, high-quality international schooling and the rising levels of pollution can be significant considerations for both home-grown and overseas talent who take a longer-term view. It really depends on the circumstances of the jobseeker involved. For example, such factors pose less interference to young, single urban professionals when considering relocation,” he says.
China will also continue to have a strong influence on the career choices of the city’s skilled workforce. “With Hong Kong’s continuous integration [with the mainland], both economically and culturally, I think we’ll see more and more local graduates looking for jobs across China,” Lin says.
This option, however, is only open to those with the right qualifications and experience. “To work on the mainland, a Hongkonger still needs to get through a stringent visa application process,” he says.