Labour Issues

Op-Ed / Column

Time to act on the worker shortage


At a time when many economies around the world are struggling to provide employment for their population, in Hong Kong we seem to have the opposite problem.

Many businesses are finding it increasingly difficult to hire people. The airport needs thousands of workers of all types to serve the growing number of passengers flying in and out of Hong Kong.

Hoteliers tell us that they can't find enough housekeepers, waiters or cooks, and we all know how difficult it can be to catch an overstretched waiter in a restaurant or salesperson in a shop.

But how acute is the shortage? Data from the Census and Statistics Department show the most severe shortages are in the trading and retail sectors with almost 20,000 vacancies going begging, followed by the social and personal services with 17,330 jobs.

Vacancies in the tourism and F&B sectors have been growing the fastest, with 15,546 positions remaining unfilled, an increase of 40.9percent for the first quarter of this year compared to the same period in 2012.

The finance and insurance sectors, part of our pillar industries, have seen vacancies grow by 10.9percent for the same period.

The net effect is that wage inflation as a result of competition for available and capable bodies is pushing up costs, and companies' development plans are being impeded.

In addition, the quality of service in Hong Kong is on the decline.

This was the message we heard time and again at a recent chamber forum on services. Employers didn't point fingers at staff. Many commended staff for managing the extra workload while they advertised for workers.

Some skeptics may say it is merely a ploy by some unscrupulous employers to take advantage of their employees. Of course, there will always be a few bad apples, but most employers will admit that they not only want to hire more staff, they must expand their workforce or else business will stagnate.

Another consequence is declining productivity, increasing mistakes and a higher risk of accidents. This last point is particularly worrying. Hospitals have long complained that they are understaffed and need more trained doctors and nurses. The fact we are suffering from a labor shortage when much of the global economy is stagnating is all the more worrying.

Our economy grew by just 1.5 percent last year, and 2.8 percent in the first quarter this year. If businesses can't hire enough staff when the economy is down, how will they be able to cope once things start picking up?

The data from the department show the problem seems to be worsening. In June 2013, the number of vacancies in Hong Kong stood at 100,188 - an increase of 7.8 percent on a year earlier - the highest on record. Chief Executive Leung Chun-ying pointed out last week that our domestic workforce is expected to start contracting by 2018, driven by our low birthrate of just 12.8 births per 1,000 population, and graying population.

There is no simple fix to our labor shortage. Companies are having limited luck in attracting workers, even offering higher salaries. Some department stores have resorted to increasing staff salaries twice a year so they do not lose existing workers, which is having the side effect of rapid wage inflation.

Obviously staff cannot continue to work longer and longer hours indefinitely to make up for the shortage, nor can companies keep increasing salaries to retain staff, both of which are undesirable and unhealthy for staff and businesses.

It is time to start seriously examining our labor strategy - including increasing female and youth labor participation rates, importing labor and extending the retirement age - to address the shortage. Shirley Yuen is chief executive of the Hong Kong General Chamber of Commerce

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