Hong Kong companies are back in the mood to hire, especially in the consumer and information technology sectors, as the city embarks on its economic recovery following the border reopening with mainland China, according to a report by KPMG.
Two in five senior executives in Hong Kong expect to increase their headcount this year, according to KPMG’s salary outlook survey, which polled over 1,300 professionals across six sectors in Hong Kong and mainland China.
The six sectors covered in the January survey were consumer markets, information technology (IT), financial services, professional services, real estate and the civil service.
“The worst time of the pandemic is already behind us,” said Peter Shiu Ka-fai, who represents the retail industry constituency in Hong Kong’s legislature. “There is a strong demand to hire more people, and the manpower crunch is one of our biggest challenges. A [salary premium] of up to 20 per cent is no surprise for companies trying to attract new hires.”
The rush to fill vacancies pushed the city’s unemployment rate down to a three-year low of 3.3 per cent during the December-to-February rolling period, according to the Census and Statistics Department.
The consumer market sector, which covers restaurants and cafes, retail shops and hotels, is most in need of hiring, with 45 per cent of employers hanging up the “hiring” sign, compared with 28 per cent last year, KPMG said. Frontline staff and customer-facing roles are most urgently in need of filing, the survey said.
Staff in the consumer market sector were also better paid, receiving 2.4 months’ wages as bonus on average in 2022, up from 1.5 months in 2021, KPMG said. The industry benefited from the easing of social-gathering restrictions in Hong Kong and the distribution of consumption vouchers by the government, KPMG said.
A government initiative to pump HK$550 million (US$70.5 million) into throwing mega events from the performing arts to sports events and conferences – as well as a “Hello Hong Kong” charm offensive – also helped to attract business and leisure travellers back, bringing relief to the consumer sector, the survey said.
Uniqlo, the Japanese fast-fashion chain, raised the salary of 2,400 of its Hong Kong-based employees by up to 24 per cent in February, underscoring the dire need for labour as the city braced for the return of shoppers.
Visitor numbers to Hong Kong rose to 1.46 million last month, the first time the monthly data had surpassed the 1 million mark since the Covid-19 pandemic was first reported in 2020.
The IT sector is also experiencing a boom, after local authorities promised HK$16 billion in funding to turn Hong Kong into a global innovation and technology hub, featuring investments in artificial intelligence (AI), quantum technology health and life science.
Over 83 per cent of IT employees expect salary increases this year, compared with 62 per cent last year, KPMG said.
“We see a gap, as people in their late 20s to early 40s are emigrating out of Hong Kong,” said Jerry Chang, managing director of executive search firm Barons & Company. “There’s an obvious [need] for middle-ranking managers because of emigration and lack of skilled talent among engineers or software engineers, so [there is] pressure to increase salaries for certain positions.”
The Covid-19 pandemic has left a severe labour shortage in its wake, as people all over the world reconsider their life and job choices. For an immigrant society like Hong Kong, three years of harsh quarantine rules and closed borders have made it particularly hard for expatriates, putting further weight on employers that rely on overseas talent.
“Expatriates returning home, and reduced numbers being seconded into Hong Kong contributed to the tightening of the talent pool in Hong Kong,” said Murray Sarelius, head of people services at KPMG.
Still, the financial sector is less optimistic when it comes to hiring and bonuses, as the world of brokers and investment bankers are yet to recover from the drought of deals, initial public offerings and acquisitions during the pandemic.
Only 35 per cent of financial sector respondents expect to see more hires this year, KPMG said, in contrast to Mercer’s report in November that found Hong Kong’s bankers looking for a 4.5-per cent raise in 2023.