Many economies around the world have to contend with high unemployment rates and a lacklustre economy. Here in Hong Kong we have basically had full employment for the past decade. The latest data released by the Census and Statistics Department (C&SD) showed that between November 2017 and January 2018, unemployment fell to 2.9% and underemployment fell to 1%, the lowest level since 1997.
While the lowest unemployment rate for 20 years is something we should rightly be proud of, it also means businesses find it extremely difficult to hire new staff to grow their businesses. Worse yet, many companies tell us that they are increasingly frustrated at not being able to hire or retain badly needed hands to even sustain their operations. This has the unfortunate side effects of adding to the pressures and demands on staff, and in some cases a deterioration of service where staff are spread too thinly.
In his Budget Address last month, Financial Secretary Paul Chan said: "A shortage of workforce and talent has also impeded the economic development and competitiveness of Hong Kong."
The most recent C&SD labour force statistics showed that the food and beverage, retail and healthcare sectors suffered from constantly high vacancy rates, with combined total vacancies surpassing 27,000. Two of Hong Kong's key industries, import/export trade and financial services, were also dogged by severe manpower shortages. The data showed that the average monthly vacancies in the import/export trade stood at around 6,200, and 5,500 in financial services.
By the Government's own projections, Hong Kong's labour force participation rate will start declining as more baby boomers start to retire in the coming years. Our pillar industries already have to contend with too few hands, and as more people drop out of the labour force to retire, sectors that are already extremely short of manpower, like elderly care and healthcare, will suffer even more.
The big question, however, concerns whether Hong Kong would be able to meet the demand for talent as we go about nurturing the innovation and technology sectors, especially the biotech, artificial intelligence, smart city and fin-tech industries, as outlined in the Chief Executive's Policy Address and backed by $50 billion in the Budget.
The Government initiatives to develop new and untested innovation and technology sectors are welcome and forward looking. But for these plans to succeed, we must address the question of growing our talent pool as they will provide the backbone and support that these sectors will be reliant upon. Where will we be able to attract this talent from and compete with others fighting for the same talent, such as Silicon Valley and Singapore?
Our past attempts to woo talent under the General Employment Policy, and the Admission Scheme for Mainland Talents and Professionals, tell us that we have to be far bolder. As we have seen from other economies, pouring money into hardware does not guarantee success. All the money in the world would be of little use if Hong Kong cannot attract and nurture talent to develop these ventures into viable and commercial enterprises. Ultimately, we need to overhaul our labour importation policy, urgently.