Is there really a talent shortage in Hong Kong? Is Putonghua essential if you want to bag a top position? What about the full expat package? We put these and other questions to a panel of top HR and recruitment authorities to get the insider's take on what's really going on in the local recruitment scene.
We will follow up each theme in forthcoming feature stories, so be sure to watch this space for fresh HR insights. And if you want to share your views, join the conversation on www.classifiedpost.com and on our social media platforms.
Is there really a talent shortage in Hong Kong?
HARPER I believe that in many fields, there is a wonderful pool of talent in Hong Kong. We are also home to some of the best universities and MBA schools in Asia. However, foreign banks with global strategies are looking for talent that is not only experienced in execution, but also able to actively drive and give voice to Asia in the global forum. This is a development area for Hong Kong, as robust graduate schemes, high-potential career passports and inclusive diversity policies need more time to mature to reduce the bottleneck in getting bright professionals recognised as part of a growing talent pool.
MOK Hong Kong is facing a talent shortage and will continue to face it because of a shrinking labour force, a lack of attention given to grooming talent during the economic downturn, and a big wave of retirement among the baby boomers that will come in the next few years.
Looking at the population by age, a large proportion of the workforce is between 45 and 60. This cohort will gradually retire in the coming few years. The workforce size will peak in 2017, but with late marriages and a low birth rate, it will start to shrink beyond 2017. At the same time, we will lose experienced talent that now hold critical positions, so succession planning is definitely a key concern.
Hong Kong is losing its demographic dividend - the notion that nations with younger populations fare better economically. As such, it is important for the city to maintain its competitiveness by enhancing the productivity of its labour force and targeting knowledge-based, high-return sectors such as research and development, testing and certification, finance, and risk management, so as to drive further growth.
THOMAS Within the middle-management to senior-professional levels, there is indeed a talent shortage in particular industries and job-type areas. One of these areas is sales. Organisations are focused on getting their revenue-generating teams productive and are investing in additional headcount, replacement headcount and new leadership to reinvigorate their results.
Sales professionals with a track record within an industry are highly sought-after, as they tend to require minimal training and have technical product knowledge. Sales professionals with experience in selling within Greater China are also highly sought-after. In technical niche areas, such as compliance within banking and finance, talent is particularly short and we search globally for candidates to place within Hong Kong.
Is Putonghua really a must to get a top job?
HOUSTON No, not at all. In many situations I've seen, the insistence on Putonghua is without any basis. One example in recent memory was a case in which we were mandated to help fill an Asia-Pacific senior-level leadership role for which the job description called for a Putonghua speaker. We pointed out to the client that, while they had a business in China, it was much smaller than Korea, their largest business in the region, and that they had recently exited Taiwan. When we asked them why we were asked to find a Putonghua speaker and not a Korean speaker, they did not have an answer.
HARPER This is inevitably dependent on the internal or external stakeholder you are facing off to. Putonghua can be a huge advantage to businesses with a focus on China. Businesses that have robust mobility schemes from their global headquarters will therefore have to work hard to recruit locally to supplement the language skills, and customer or regulator relationships, on the ground in Hong Kong.
WONG Yes. China remains one of the largest markets in Asia-Pacific, so having exposure in China is still important. Putonghua will be a serious advantage when it comes to effectively understanding the culture and practices.
Is the expat package really dead?
BEGO It's on its last legs. The full expat package still exists at the very highest levels, but at the next level down, in modified expat packages offered by a lot of finance and tech companies in particular, the housing allowance has gone and been put into base remuneration instead. It's like a modified local deal at best.
HOUSTON Yes and no. In order to attract non-Asian-based professionals to the region, there is almost always a requirement to offer them benefits which fully pay for their accommodations, schooling and the like - at least initially. Generally, if after a certain amount of time - say, three to five years - the professional opts to stay, employers suggest a change in status. This could be either to "local" or "expat plus" - for example, a package which includes some cash as an acknowledgement of the higher cost of accommodations and schooling.
US employees are the exception since they are required to pay US taxes on income earned outside the US. They are at a disadvantage compared with other nationalities, such as the British, Australians and Canadians who, despite the high cost of living in Hong Kong, find it advantageous to live here at a much lower tax rate than in their home countries.
HARPER No - but recruiters will always say it is to manage expectations.
Do companies really owe their employees 'life balance'?
CERULLO My view is that all companies owe their employees a focus on their well-being as not only does this support the employee's life, but it also has a major positive impact on performance and engagement.
MOK To win in the war for talent, companies need to find better ways to attract and retain such talent. Many studies have revealed that a lack of work-life balance is one of the top five reasons for employees to choose to leave a company. Studies also show that the cost of turnover for one employee can be as much as 18 months of the employee's salary.
Furthermore, employees who do not have work-life balance tend to have high absenteeism, low productivity and poor engagement. It makes a lot of business sense to ensure a good work-life balance for employees, and not only for the well-being of these employees. A workforce that is engaged and healthy - both physically and mentally - is an important factor in corporate success.
THOMAS Relative to many other mature employment markets, Hong Kong is known for its intensity and work ethic, which usually translates to longer working hours. The thing to acknowledge is that the average term of professional employment in Hong Kong is one and a half to two years in each role, which is very short. This could no doubt be lengthened by offering some lifestyle benefits to employees.
We have witnessed a number of organisations offer greater flexibility to their employees that focuses on productivity and outcomes rather than working long hours for the sake of it. The irony is that now in Hong Kong you can often see someone at VP level finish work at 7pm, which would have been unheard of in the early 2000s.
Flexibility, however, in the offering of part-time employment is rare. The younger generation's view of success has a heavy focus on lifestyle elements and health. As they grow into middle management, retention of these people will be based on offering some type of balance.
Do Hong Kong's HR departments take succession planning seriously enough?
CERULLO In a word, no. I believe succession planning, and other strategic HR activities such as workforce planning or internal mobility, are unfortunately not invested in or prioritised as much as other issues. When many employees, senior or junior, find it easier to move roles externally than with their current employer, there's a huge missed opportunity to drive retention and engagement.
WONG I think so. Retaining key talent continues to be at the top of the agenda for many companies. Having a clear succession plan helps to ensure the development and retention of key staff and keeps the organisation healthy.
THOMAS Many HR departments in Hong Kong talk about succession planning and talent pipelining. Our observation, however, is that they are so involved in the essential operational and routine elements of their roles that often the time to think and invest in strategic matters is overlooked.
The investment banks lead the way in succession planning. A number of them openly discuss the issue and have their executive and managing directors evaluated on their plans in this regard. They will often also proactively connect with, and interview, people in the market who may be of interest to them in the future, thereby establishing a relationship.
With an increasing trend towards matrix reporting, managers managing up instead of down and the increasing use of e-mail, will tomorrow's leaders actually know how to communicate?
BEGO They will obviously still communicate, just in different ways. But I've seen offices where e-mails are sent to people sitting three desks away and I find that troubling. Here at Ivey, I try to work with executives to remind them that, despite the increase in the use of social media and the possible need to manage their personal brand, a lot of communication can still be conducted in the old-fashioned way.
CERULLO Communication will always be a critical competency of any successful leader, whether operating in a matrix or a traditional organisational structure. From my experience working for Alexander Mann Solutions, which operates a matrix structure globally, you have an even greater opportunity to develop communication skills in a matrix - whether that's through face-to-face, voice or digital communications.
WONG The trend will continue to be towards communicating through multiple channels. Coaching, for example, can be conducted through internal chat programmes, while acknowledging information can be done via a quick Whatsapp message. Leaders will have to learn to use these channels.
If the members of Gen Y are different in a substantive way, is this difference a good thing?
HOUSTON They are different, but reality has begun to hit them in the face. Gen Y is a term generally applied to youth in the West who were raised in a time of general affluence. However, not only did the world economy change, but there has been an increasing number of individuals from developing economies, such as China and India, coming to the West for education. These individuals have completely different levels of ambition and definitions of happiness from their Western counterparts - for them there has been no attention paid to the concept of "balance".
In short, in many cases, non-Westerners are willing to sacrifice and work harder than many of their counterparts of the same age who have been raised in the West.
BEGO They are different in a substantive way. In many ways, they bring a great level of strength in terms of their understanding and utilisation of technology. The Gen Ys were pretty much the first generation to come into the workplace computer literate.
I think the challenge with Gen Y is that they are sometimes distracted. In my HR capacity, I sometimes meet with the most intelligent people who would say, "Look, I'm on Facebook half the day because I'm bored."
MOK It is advisable to adopt a more open attitude towards this new generation that has its own strengths and characteristics. Its members are creative, entrepreneurial, goal-orientated, technology-savvy, capable of multi-tasking, and are eager to climb the career ladder. If employers can capitalise on these strengths and provide suitable training and coaching, they can develop critical skills to make substantial contributions.
In fact, some older Gen Y employees are starting to take up middle-management positions. They are beginning to see themselves through the eyes of the younger Gen Y employees. This generation of business leaders is important human capital for corporate development and sustainability, and candidates for succession plans. The simple fact is they are our future human capital, whether we like them or not.
Are companies forgetting to develop a corporate culture that engenders loyalty at senior levels?
HOUSTON They are not forgetting so much as they are ignoring this in the pursuit of profit. It's a very short-term view of the world. Companies who complain that employees are no longer loyal must look at their own actions in creating this situation.
THOMAS I believe current-day organisations seek to strengthen the loyalty of their established senior employees. Long-term options, promotion from within and paid MBAs are some of the areas that we see the majority of medium- to large-sized organisations offering.
BEGO There's a difference in where the market was, where it is now and where it's going. I think in the past, especially in the late '90s, there was a real big liberation - employees were moving around a lot and there were increased packages, bonuses and payouts.
In the past few years, I've seen a lot more stability. But companies are not as loyal and are now quicker to let people go. However, there aren't as many opportunities for employees to move to in the market.
I'd look at banking, where they are now deferring bonuses and compensation - even the cash portions. The only way employees in this situation can then move is if someone buys out these deferrals for them and no one's buying them out. Companies are therefore forcing loyalty at very senior levels, but I don't know if it this is a prudent way to do it.