The current talent shortage in Hong Kong has severely affected almost three-quarters of all businesses across a broad range of sectors, according to the findings of the HKGCC Talent Shortage Survey 2023.
Sharing the survey’s findings at a press conference on 6 June, Chamber CEO George Leung said emigration was one of the main factors for the talent shortage, and that the authorities need to find a solution to address the issue. Increasing wages and competition to retain employees would only cause a vicious cycle in the labour market, thus impacting productivity, he added.
A total of 74% of respondents surveyed said they were struggling with a shortage of talent. Of these, 61% said they had faced a labour shortage for one to three years. The results showed that the biggest dearth in talent was for junior-level management at 59% (annual base salary range of HK$200,000-HK$500,000). However, the level least affected was senior management (annual base salary range of HK$1.5 million-HK$2 million), with only 1% of respondents reporting a lack of talent.
The pandemic caused an outflow of talent that resulted in the workforce shrinking by 210,000 between the beginning of 2019 and end-2022. A total of 94,100 people left the workforce in 2022 alone. The top three reasons for staff resignations among respondents was the desire for higher pay (79%), emigration (70%), and desire for a better work-life balance (51%). This was followed by a desire for a more senior title/position (37%) and moving to a different career field (34%) (figure 1).
With the city’s business competitiveness depending on talent, the brain drain needs to be urgently stemmed. Difficulty in hiring the required talent to drive businesses forward might force companies to relocate part or all of their operations out of Hong Kong.
On 16 May, the Government expanded the talent list from 13 to 51 job types under the Quality Migrant Admission Scheme, the General Employment Policy and the Admission Scheme for Mainland Talents and Professionals. This was a positive move as the survey showed that 80% of respondents had not applied for the schemes, with 52% saying that the job categories covered were not relevant to their companies, while 21% were uncertain about which scheme to apply for (figure 2).
To address the loss of talent, most companies interviewed said that they have resorted to offering better remuneration packages (83%). Next came investing in employee development (58%), demonstrating the importance of re-skilling and up-skilling to keep employees engaged and unleash their potential. Investing in automation to reduce the company’s reliance on manpower (49%) came third, while 21% said they had relocated part or all of their operations out of Hong Kong. Only 3% said they were considering closing down operations in the near future, while 12% said they would reduce the scale of their operations (figure 3).
Top short term measures for alleviating manpower shortages included recruiting talent from the Greater Bay Area (44%), with respondents stating that a wider and simplified criteria for the talent schemes would attract more non-local talent to Hong Kong. And 37% of those polled said additional government incentives and subsidies should be introduced to assist companies to retain, retrain and attract talent, while 29% believed direct importation of labour for sectors experiencing serious manpower shortage was required.
For long-term measures, targeted education and training initiatives would be needed to assist companies to retain, retrain and attract talent (47%), as well as better facilitation of cross-border commuters from the Greater Bay Area (39%), and more favourable immigration and taxation policies to attract overseas talent (38%). And 28% favoured promoting and facilitating women’s participation in the workforce by increasing the supply of affordable day care centres for children and the elderly (figure 4).
Regarding economic growth, the Chamber raised its 2023 forecast for Hong Kong from 3.8% to 4.2%. The Chamber also revised its estimate for exports to a 2% contraction from the 4.5% growth predicted in early 2023, citing weak global demand. Leung said retail sector growth is expected to slow down while exports continue to be weak, making it difficult to achieve significant economic growth.
About the survey
A total of 196 HKGCC companies responded to the survey, which was conducted in April. Of these, 54% employed more than 200 staff while 28% employed 50 or fewer staff.
Slides can be downloaded here.