Morgan McKinley Hong Kong Hiring Update November 2011

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Morgan McKinley | Hong Kong

Hiring Market Update - November 2011

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Hiring Market Update | Hong Kong November 2011

INTRODUCTION

Hong Kong’s strong hiring market of 2010 continued well into 2011 with increased levels of hiring seen

across the board. Demand was particularly high in sales & marketing and technology within the commercial

sector, and risk & compliance within the financial services sector. The insurance hiring market was also

robust with actuaries, underwriters and claims specialists remaining highly sought after.

Hong Kong’s GDP slowed to 5.1% year-on-year in Q2 2011, a decline from 7.1% in Q1. There was a

significant drop off in hiring volumes in Q3 11 within the financial services sector as the European debt crisis,

poor U.S. economic data and a decrease in mainland growth affected global markets and Hong Kong

significantly. The commercial sector remained relatively buoyant however, with continued growth in the

consumer goods industry (specifically retail and luxury brands) due to demand from local and mainland

consumers.

Though the outlook for Hong Kong’s economy is clouded by the instability of global financial markets, we

anticipate this period of low visibility will be short lived. Once the markets regain strength we expect there to

be a bounce-back in hiring.

We recently surveyed over 1,050 senior level operational and HR managers working across the financial

services and commercial sectors in Asia Pacific. As part of our ongoing commitment to keep our clients and

candidates up to date with the latest trends in the recruitment sector, we asked them about their hiring plans

for 2012 and the challenges they expect to face in the Hong Kong market over the coming year.

In this Hiring Market Update you will find a summary of our findings. To make it as relevant as possible to

you, the results have been separated into two sections: financial services and commerce & industry. We

trust that you will find this information useful and we welcome your feedback. We would also like to take this

opportunity to thank our valued clients for their support in 2011 and wish everyone a very prosperous 2012.

Nick Lambe | Managing Director | Morgan McKinley Hong Kong

T: +852 3907 3931 | E: [email protected]

mailto:[email protected]



KEY FINDINGS

Financial Services

The majority (75%) of senior level operational and HR managers working in financial services

institutions in Hong Kong are concerned that current global uncertainty will significantly affect Asia

Pacific as a growth market.

More than half (60%) of employers believe headcount restrictions will be a major factor influencing

hiring levels over the next 6-12 months.

Recruitment strategies appear mixed, with 35% of companies planning to reduce headcount in some

areas and hire in others, 29% focused on hiring only and 26% still unsure of their plans for the period.

In line with last year’s survey results, talent attraction and talent retention are seen as the main

personnel challenges for the coming year. Managers plan to focus on reward & remuneration and

training & development to address these issues.

Commerce & Industry

Senior managers surveyed across commerce & industry were less concerned (45%) about global

market conditions affecting growth in Asia Pacific than their peers in the finance sector (75%).

Almost half of employers surveyed said they would look to hire within the next six months, with a further

23% unsure of their plans and 20% implementing job cuts in some areas and hiring in others.

Of those companies planning to increase their ranks, half believe that hiring volumes will be similar to

2011. Positively, 38% anticipate their hiring volumes will be higher in the next 12 months, compared to

the previous 12 months.

Mirroring the results of the financial services survey, commerce & industry managers cited talent

attraction and talent retention as the main human resources challenges on the horizon.

Pleasingly, the percentage of employers concerned about handling redundancies was low at 5.4%

(compared to 24% for Hong Kong financial services managers and 14.5% for Singaporean commerce &

industry managers).



FINANCIAL SERVICES

Market Trends

In our recent survey of senior level operational and HR

managers working across a range of financial services

institutions in Hong Kong, the majority (75%) are concerned

that current global uncertainty will significantly affect Asia

Pacific as a growth market.

At the time the survey was undertaken, one of the prime

concerns was that contagion of the eurozone debt crisis would

pull the global economy into a double dip recession. Although

EU leaders formalised a deal to tackle the crisis in late

October 2011, Italy has since overtaken Greece as the prime

threat to stability. The escalating crisis was the main agenda

item at the recent G20 Summit and should continue to dominate headlines, and finance professionals’

concerns, over the coming weeks.

Due to the uncertain economic landscape, it is not surprising that almost 60% of managers believe

‘headcount restrictions’ will be a major factor influencing hiring levels over the next 6-12 months, followed by

‘market conditions’ (56%) and growth, restructuring and other internal change factors (40%).

Recruitment Prospects

Job cuts and hiring freezes are pushing more and more Americans and Europeans to look east for career

opportunities. In fact Hong Kong was identified – alongside Singapore and New York – as one of the top

three destinations for those looking to further their careers with a move abroad, in a separate survey

Morgan McKinley conducted with 560 financial services professionals in London.

Do you believe that current global uncertainty will significantly affect Asia Pacific as a growth market?



Although job creation in markets such as Hong Kong is faster than in the west, the region has not been

unscathed by the financial crisis. People with experience in more mature markets are warned against the

misconception that they will ‘walk into’ a job in Hong Kong. Whilst this is certainly the case for niche skill

sets it may not ring true for all types of professionals.

Cultural and linguistic skills are more crucial than ever given the increased focus on domestic growth in

China and south-Asian countries. Chinese nationals returning home after studying or working abroad are

the most sought-after employees; they are culturally attuned and are also perceived as being less costly to

hire than someone from abroad, as well as easier to retain.

Our survey found that 43% of managers predict that hiring levels across their organisations will be lower in

2012 than in 2011, with 40% expecting levels to remain steady. Recruitment strategies appear mixed, with

35% of companies planning to reduce headcount in some areas and hire in others over the next six months,

29% focusing on hiring only and 26% still unsure of their plans for the period. Of those planning to bring

new staff on board, almost all respondents (97%) indicated that they would be offered permanent positions.

It appears that the bulk (79%) of this recruitment will be driven by replacement hiring.

If further hiring is likely to take place over the next 12 months, what do you think is likely to drive it across your organisation?



Challenges for Hiring Managers

In line with last year’s survey results, talent attraction (50%) and talent retention (47%) are again seen as the

main personnel challenges that will need to be addressed by financial services employers in the coming year.

Respondents to our survey indicated that they would be considering a range of retention strategies, with

reward and remuneration (37%) and increased training and development (41%) being the two most popular

approaches to tackling this issue. As 44% of employers expect there to be staff reductions in certain areas, it

is likely that only professionals with niche skills sets and/or specialist sector experience that will command

salary increases over the next 12 months. Furthermore, bonuses paid within the financial services sector for

2010-11 are expected to be approximately 25-30% down on 2009-10, or even less in some organisations.

Almost a quarter of hiring managers indicated that handling redundancies would be a challenging part of

their roles over the next 12 months. It was interesting to note that this percentage was considerably higher

than the 13% of managers surveyed in Singapore who indicated job cuts would probably be an issue.

As a hiring manager, what do you think are the main personnel challenges you will face over the next 12 months?



COMMERCE & INDUSTRY

Market Insight

Senior managers surveyed across commerce & industry were considerably less concerned (45%) about

global economic uncertainty affecting growth in Asia Pacific than their peers in the finance sector (75%).

Hong Kong’s commercial sector has been relatively buoyant in 2011. In particular, the consumer goods

industry (specifically retail and luxury brands) is booming off the back of fast-growing demand from local

and mainland consumers.

The picture is not completely rosy however. The government is adopting a cautious stance, highlighting

that the state of the financial markets in Europe and the US has overtaken inflation as a chief economic

concern, and that the global slowdown is hurting Hong Kong’s exports. Property is one pillar of the

economy which is particularly at risk; home transactions fell for the ninth consecutive month in September

2011 and property prices fell 3% in Q3.1

These jittery market conditions will significantly affect hiring strategies over the next 6-12 months according

to 45% of Hong Kong managers. Company and team performance will also influence recruitment (41%), as

will growth, restructures and other internal changes (34%).

Recruitment Prospects

Despite apprehension in the market, the

recruitment outlook for the year ahead within

commerce & industry is reasonably positive.

Almost half of managers surveyed said their

companies would look to hire within the next

six months (compared to 29% in the finance

sector). Unfortunately 10% of respondents

only have plans to reduce headcount; double

the percentage recorded for their

Singaporean commerce & industry

counterparts.

1 The Standard: Tsang warns again as economy, exports slip, 28 Oct 2011

Do you anticipate that your organisation will be reducing headcount or hiring (or both) in the next six months?

http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=116527&sid=34240393&con_type=1



Of those employers that do plan to bring new professionals on board, half believe the volume of hiring will be

similar to 2011. Positively, 38% of respondents anticipate that hiring volumes will be higher year-on-year. It

is predicted that the robust consumer goods industry (specific retail and luxury brands) will drive a large

proportion of this demand.

Challenges for Hiring Managers

Mirroring the results of the financial services survey, managers within the commerce sector cited talent

attraction and talent retention as the main human resources challenges they expect in the next 12 months.

Employers plan to enhance their training and development programmes (60%), increase employee brand

engagement (53%) and focus on performance management (47%) in the hopes of retaining key talent.

Pleasingly, the percentage of employers concerned about handling redundancies was low, at 5.4%. It

appears that more commerce & industry managers in Singapore are bracing for job cuts, with 14.5%

flagging it as a challenge they expect to face in the coming 12 months.

We hope this research has provided interesting insight into future trends within the professional jobs market

in Hong Kong. To discuss any of the points raised or your recruitment requirements, please contact Morgan

McKinley on +852 3907 3907.

As a hiring manager, what do you think are the main personnel challenges you will face over the next 12 months?

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Morgan McKinley Hong Kong Hiring Update November 2011

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