Hong Kong is going all-out to attract top talent to the city, but pundits say the priority should be midtier professionals to deal with the city’s acute scarcity of workers in various businesses. Zhang Tianyuan and Jessica Chen report from Hong Kong.
The risks of Hong Kong’s critical dearth of skilled workers, exacerbated by the talent exodus during the COVID-19 pandemic, a record-low birth rate and a rapidly graying population, lurk beneath the city’s veneer of cheerful jobless figures — just 2.8 percent between June and August — signifying full employment has been restored.
But the special administrative region is fighting an uphill battle in striving to lure professionals to the city, with a whopping 100,000 specialists, including lawyers, nurses and bankers — the linchpins of Hong Kong’s economic revival — having left in the past three years, according to veteran businessman and Executive Councilor Jeffrey Lam Kin-fung.
A raft of policies launched to get talent to return to the SAR has fallen short of being the panacea for the labor malaise. The crux of the matter is that the world’s financial hub — whether its economy chugs ahead at 4 to 5 percent annually or stalls — desperately needs fresh hands and midtier professionals across various sectors, while the local authorities focus heavily on wooing blue-collar workers and “top talent” with fat salaries. This puts the most chronic problem of solving the acute shortage of midlevel skilled workers on the back burner.
The SAR’s post-pandemic economic recovery is creating labor shortfalls across wide business sectors, including, but not limited to, the blue-collar workforce. Hong Kong International Airport — once ranked the world’s third-busiest in terms of international passenger volume — had been running at 66 percent capacity as of August, compared with pre-COVID levels. The decline is largely attributed to a shortage of workers.
Having inadequate airport personnel would thwart the long-term growth of Hong Kong’s aviation and tourism industries, warned Lam Hon-kei, a member of the Board of Airline Representatives, as well as Air Canada’s general manager for Hong Kong and southern China. He said about 20 percent of the board’s member airlines have yet to restore air travel to and from the SAR.
Likewise, the tourism sector is facing unprecedented challenges in the wake of the huge number of workers throwing in the towel, plus the growing trend of “quiet quitting”, said Giovanni Angelini, former CEO of Shangri-La Hotels and Resorts.
The SAR government aims to import 6,300 aviation workers as part of its efforts to bring in 20,000 nonlocal laborers. From Sept 4, the Supplementary Labor Scheme has lifted the general exclusion of 26 job categories, including tellers, hair stylists, sales representatives, waiters, delivery workers, warehouse keepers and others, for up to two years.
“It’s a good start focusing on targeted industries,” in terms of importing labor, said Pascal Siu Yat-kui, a researcher at local think tank Our Hong Kong Foundation. “However, the next step should be to understand the sectors that are experiencing labor shortages in different time periods.”
Midlevel workforce dries up
Hong Kong has suffered a chronic brain drain in recent years, losing 210,000 workers between early 2019 and the end of 2022. Another 94,100 people left the city last year, according to the Census and Statistics Department.
“The shortage is seen at most levels of midmanagement, supervisors and front-line people, in particular. The same problem also affects the top management although it’s not too critical,” Angelini said.
ManpowerGroup — a leading global workforce solutions company — holds similar views, calling the worker shortage a “significant concern” for Hong Kong businesses. “These employees are considered the most productive and could become the backbone of future management,” it said. The issue has been exacerbated by an emigration trend, with many enterprises seeing turnover rates exceeding 20 percent.
The views are backed by a study carried out by the Hong Kong General Chamber of Commerce. The study showed that more than 80 percent of companies polled have had a shortage of junior and midlevel employees, with half of them lacking managers with an annual base salary of HK$200,000 ($25,580) to HK$500,000. The chamber interviewed 196 member companies in April.
According to the survey, 74 percent of the firms reported experiencing talent shortages, with more than 80 percent saying the problem has persisted for at least a year.
George Leung Siu-kay, chief executive of the HKGCC, said he hopes the SAR government will adopt a labor importation policy that specifically targets midlevel and lower-level employees, distinct from that aimed at luring specialized talent.
He warned that the cycle of raising wages and heightening competition to retain employees will create a “harmful loop” in the labor market, ultimately affecting productivity. This could have a negative impact on small and social enterprises with limited financial resources, placing them under considerable strain.
Among the talent policies initiated by the SAR, more than 50,000 applications had been received under the Top Talent Pass Scheme, with about 39,000 having got the nod as of this month. More than 3,400 individuals with an annual salary exceeding HK$2.5 million were allowed to work in Hong Kong as of May.
These policies, however promising they may look, obviously, have left the shortage of midlevel professionals untouched. The crux of the problem calls for a holistic solution with long-term plans and short-term “Band-Aid cures” to lift the SAR’s economic growth.
It isn’t helpful that authorities reset the threshold for the Quality Migrant Admission Scheme, allowing eligible professionals to have a single renewal of visa extension up to six years. The renewed program has received over 40,000 applications, with about 10,000 approved as of July. “The top-notch talents, however, are not what the city needs most,” Leung said.
Instead of focusing on midlevel professionals, the government is being overwhelmed with low-skilled workers. Explaining the government’s focus on “competing for talent” and “tackling labor shortage issues”, Secretary for Labour and Welfare Chris Sun Yuk-han said that the local labor force peaked in 2018, and has been declining annually, resulting in a reduction of some 160,000 low-skilled workers in 2022.
Sustainably alleviate shortage
Along with “top talent”, it’s worth noting that the SAR government decided in June to import 20,000 nonlocal workers in the critically affected construction, aviation and transportation sectors to shore up their respective manpower shortfalls.
Importing labor is a short-term solution at best, according to Hendrick Sin, deputy to the National People’s Congress. As official statistics indicate that the supply of low-skilled labor is expected to exceed demand by 2027, it’s believed that, compared to importing labor, it’s more urgent to train and retain local workers. The suggestion rings true, especially when considering the city’s depleting public-housing resources for low-income families.
According to Sin, a multipronged, localized solution is needed to alleviate the labor shortage in a sustainable manner. “In the longer term, tackling Hong Kong’s structural unemployment problem will require efforts to upgrade and retrain the workforce, especially in areas such as information literacy, which is becoming increasingly important in a demand-driven labor market.”
Sin said policy measures, including strong unemployment assistance and job-matching services, are needed to mitigate the impact of structural unemployment.
In addition to the government’s efforts, business sectors have been trying different strategies to attract talent by promoting internships for students from prestigious universities.
In early August, Sin, an alumnus of Stanford University, arranged summer internships at Hong Kong Science and Technology Park; six Stanford students were granted the opportunity.
“Short-term job offers and summer internships are a soft but welcome solution to attract well-educated talent from abroad,” Sin said.
Though the demand for skilled personnel, especially graduates of prestigious universities, is always strong, the demand for low-skilled labor is a different story.
Based on a government report titled “Manpower Projection to 2027” and the latest data from the Census and Statistics Department, Hong Kong could see a surplus of 202,500 people with secondary education or below who are regarded as unskilled or low-skilled workers.
“Hong Kong does not lack workers. Rather, the problem lies in the low labor participation rate,” which hit a record-low 57.7 percent in June, said Terence Chong Tai-leung, an associate professor at The Chinese University of Hong Kong’s Economics Department, and executive director of the Lau Chor Tak Institute of Global Economics and Finance.
He blamed the COVID-19 pandemic, which lasted more than three years, for the work-rate decline, having forced many workers to quit, or lose their jobs, and resort to alternative means for a living.
Lawmaker Aron Kwok Wai-keung, who is also a member of the Hong Kong Federation of Trade Unions, warns that prioritizing quantity over quality in human resources acquisition would lead to irrationality that could have a significant impact on the local labor market, depriving workers of opportunities for growth and development.
Another legislator, Tony Tse Wai-chuen, would like the government to make potential labor forces available, such as housewives and retirees. Allowing those in their 60s or 70s, who are still capable of working, to rejoin the labor force would benefit the economy and businesses, and reduce senior residents’ dependence on social support. It also would be a pleasant way for them to pass the time, he said.
“If a standardized reemployment system could be introduced, pioneered by the government and large companies, and actively promoted to small and medium-sized enterprises and the general public, coupled with appropriate support facilities and incentives, such as tax incentives and appropriate retirement benefit programs, it would help attract more retirees to continue working, leading to a bigger workforce, and helping Hong Kong to ease the labor shortage,” Tse said.
Currently, the government operates the Employment Program for the Elderly and Middle-Aged, aimed at encouraging enterprises to hire job seekers aged 40 or above by providing training allowances for employers.
In formulating talent policies, Chong said the government has to consider Hong Kong’s role globally.
According to ManpowerGroup, Hong Kong isn’t alone in grappling with the challenges of attracting and retaining top-skilled professionals. Global talent shortages have reached a 17-year high, with 77 percent of employers worldwide reporting difficulties in finding the talent they need this year. This figure is more than double that for 2010, which stood at 31 percent.
The SAR authorities have expanded the Talent List from 13 to 51 job types to lure overseas professionals. The new work categories include nurses, doctors, dentists, architects, land surveyors and builders, and practitioners of traditional Chinese medicine.
“How long these situations last will depend on the pace of global economic recovery, as well as the impact of geopolitical factors,” Sin said.
Hong Kong is at a critical juncture in transforming its economic structure and striving to be a world innovation and technology hub. “The city definitely needs information and technology talent,” affirmed Our Hong Kong Foundation’s Siu.
Contact the writers at tianyuanzhang@chinadailyhk.com
