The recent wave of emigration from Hong Kong is leading to a shortage of skilled workers and impacting businesses of all sizes, according to the findings of the Chamber’s recent survey.
A total of 38% of respondents said they had been adversely affected by the loss of emigrating workers to varying degrees, ranging from “medium” (24%), “high” (12%), to “very high” (2%) (Figure 1).
More than half (58%) of respondents indicated that they expect the emigration-induced turnover rate to stabilize in 2022. However, some 35% of respondents were less optimistic, with 31% and 4% respectively anticipating a worsening or significant worsening in the turnover rate (Figure 2).
Middle-aged employees were more likely to emigrate as respondents indicated that “30-39” and “40-49” were the two dominant age groups leaving Hong Kong (Figure 3).
Businesses are in danger of losing their “backbone” should the emigration phenomenon continue, as middle management and first-level management, in terms of organizational hierarchy, were the two groups more likely to depart compared to those in rank-and-file and senior management positions (Figure 4).
The loss of talent, which spans such occupations as engineering and technical services, finance and accounting, as well as information technology are the job main types that are suffering from emigration (Figure 5). The increase in professionals leaving Hong Kong would undoubtedly have major economic implications on the city.
Many of those who have decided to pack their bags belong to the middle-class, who are in search of better quality of life elsewhere. This is reflected in survey responses, where career prospects were accorded lower priority compared to children’s well-being and political considerations, which were cited as the key motivating factors for staff to quit their jobs and leave Hong Kong (Figure 6).
When asked to rank the top challenges to their businesses as a result of emigration, respondents identified loss of skills and knowledge as top concerns. This is followed by increased vacancies, as well as extra workload for existing employees in that order (Figure 7).
The ability to continue with business as usual was especially concerning for SMEs, with “disruption to daily operations and customer relationship” being cited as the second most important challenge.
Large companies are tackling the issue head-on, with 61% opting to “strengthen succession planning and recruitment efforts” while 51% said they would “increase automation and digitalization.” By comparison, only 28% and 35% of SMEs indicated that they would make similar investments respectively (Figure 8).
At the same time, big corporations were prepared to up their budgets with 39% and 37% of respondents considering “increasing pay and benefits” and “retention planning” respectively. The corresponding response by SMEs were respectively 13% and 11%.
Hong Kong can ill afford the loss of human capital, especially in the face of an ageing population and a historically low replacement rate. Given the importance of human capital in the city’s service-driven and knowledge-based economy, there is real cause for concern if the current rate of brain drain is not curtailed.
Companies, which are already besieged by the pandemic, will also have to contend with the financial costs of hiring and training new employees, not to mention hidden costs such as time cost and lack of business growth.
In the immediate term, the Government’s primary objective will understandably be to bring the pandemic under control. As and when conditions improve, policymakers’ focus and attention should be to restore confidence among the international community by promoting Hong Kong as an attractive place to live, work, study and raise a family.
A lot of work will have to be done to recover lost ground as companies and personnel relocate away from Hong Kong over a variety of reasons, which also include those relating to the policies to fight Covid over the past two years.
Wilson Chong, wilson@chamber.org.hk