The outlook for the 2022 employment market is optimistic, with many more businesses planning to increase their headcounts this year compared to last, according to the Hong Kong Executive Salary Outlook 2022 from KPMG. At a sponsored event on 7 June, two experts from KPMG shared the key findings from the report with members, and discussed the implications for local businesses.
Michelle Hui, Director, Executive Search and Recruitment, explained that the survey – now in its sixth year – showed that more respondents across all sectors were planning to increase headcounts. The trend is particularly notable in finance, which is benefiting from growing demand for expertise in ESG and family offices. The innovation and technology sector is also seeing a boost from the government’s focus on helping the city’s ageing population.
Professional services, meanwhile, saw the biggest year-on-year jump in firms planning to grow their staff. This, Hui said, is partly because increasing regulatory demands and ESG compliance requirements were prompting greater need for professional expertise in these areas.
However, higher staff levels will not be seen across all job types within companies.
“Organizations are particularly focusing on three areas: first, the revenue generators, followed by operations and IT,” Hui said. “As businesses are now recovering after Covid, they are eager to hire more fee earners, more salespeople, and more customer-facing staff.”
Moving on to people movement and salary, she said that the current employment market is active and positive for job seekers.
“The market is competitive, and often candidates have multiple offers, as well as counter offers from their existing employers,” she said.
As the economy has improved, salary and compensation have become the key motivators for job seekers, and businesses are now more willing to pay what is expected to secure the talent they need in crucial areas.
Pay increases are not evenly spread across all workers. While some respondents managed to secure 20% and even 30% pay rises on moving jobs, for most employees the rise was a lot lower. Around half of respondents said that they did not receive a pay rise in 2021.
“The trend in the market is for companies to allocate their limited budgets to those employees who are critical to the business,” Hui said.
Bonuses had on average returned to pre-pandemic levels of around 2.2 months, and the majority of respondents were expecting better pay and bonuses in 2022.
David Siew, Partner, People Services, then gave an overview of what the survey revealed about the manpower outlook for the Greater Bay Area (GBA).
“Most notably, there is an increase in willingness to relocate from Hong Kong to other GBA cities,” he said. In the latest report, 72% of respondents said they would move, compared to just 52% two years earlier. “The upward trajectory is very promising for the GBA.”
The I&T sector in the Mainland is, unsurprisingly, top of the list in terms of job opportunities. But, as Siew noted, there is also demand for staff in financial and professional services, thanks to the GBA expansion plans of a number of global banks.
While the willingness of Hong Kong workers to move across the border is good news for businesses that want to expand across the GBA, the different tax regime on the Mainland often means higher salary costs, Siew said.
“If you are paying HK$100 in Hong Kong, you would need to pay the equivalent of HK$154 in the Mainland to maintain the net income,” he explained.
However, there are fiscal subsidies on offer to incentivize high-end talent, which effectively match the Hong Kong income tax rate. All of the GBA cities have slightly different criteria for these tax refunds, depending on their dominant industries and where their manpower shortages are most acute. So businesses should carefully research these subsidies, so they can take advantage of them where they are available.
In terms of attracting and maintaining talent, salary remains the top concern of job seekers, while career progression is also important. But there are two key areas where the mindset has shifted recently, Siew noted.
“There has been a drop off in concern about job security, as the market is more positive,” he said. “There has also been another 5% uptick in the importance of work flexibility, a trend that has been accelerating in recent years.”
He noted that workers across the board are now looking for more flexibility, except for the C-suite.
In response to an audience question about the “great resignation” issue, Siew said that while some expats were leaving, statistics show that the number of people giving up their Hong Kong employment visas has remained static. However, Covid has affected the flow of people coming in to the city.
“From an international workforce perspective, there has always been a lot of churn,” he said. “Once the gates are open again, I’m optimistic we’ll see a rebound of talent.”