Links International’s 2021 Q4 Hong Kong Job Market Updates
Links’ Hong Kong Job Market updates, provides data-based analysis of the Hong Kong job market based on a number of data sources including Hong Kong Labour Department statistics, HK job posting numbers and response rates in respect of a ‘basket’ of common commercial job types in Hong Kong.
Seasonal Drop Affects Q4 Job Market but Positive Signs Seen Going into 2022
Despite hitting the inevitable seasonal year-end dip in Q4 2021, the Hong Kong job market remained robust and has a promising outlook and candidate-driven market for 2022.
On the whole, 2021 was a great year for the Hong Kong job market, rallying over 75% from January to September 2021. Strong economic performance, government support schemes, and the return of business and consumer confidence initiated a recovery in the market.
As expected, growth plateaued in December as job postings dropped 7.5% from the September highs. The dip signals the start of the seasonal year-end drop where activity in the job market slows as candidates wait for their year-end bonus payouts and don’t commit to career changes until after the Chinese New Year holidays. However, the historically slow time of the year for job postings only created a slight blip in the market, a good indicator that the 2022 HK job market will continue the strong momentum seen in 2021.
The main factors that will influence the job market in 2022 will be how often the Government imposes social distanced measures and lockdowns of businesses with the more contagious Omicron cases and whether travel can resume successfully between Hong Kong and Mainland China.
All Functions Suffer Drop in Q4 2021
Job postings in all functions dropped 6-8% in Q4 with Admin & HR performing the worst at 8%. As the year-end dip impacts all functions, the similar drop across the board comes as little surprise.
| Job Function | October | November | December |
|---|---|---|---|
| Finance | -8% | 8% | -7% |
| Admin & HR | -11% | 6% | -3% |
| IT | -4% | 6% | -9% |
| Marketing & PR | -5% | 5% | -6% |
| Sales | -4% | 4% | -7% |
Unemployment Rates Fall to 4.1% as Severely Affected Sectors Recover
After August, unemployment rates continued to slide for a subsequent 3 months, reaching 4.1% for the September – November period. The positivity from the lack of local cases from July to November is reflected in falling unemployment rates.
| Period | Unemployment Rate | Percentage Increase from Previous Period |
|---|---|---|
| July – September | 4.5% | -0.2% |
| August – October | 4.3% | -0.2% |
| September – November | 4.1% | -0.2% |
The drop of unemployment rates by 0.6% to 4.1% meant around 21,600 people re-joined the workforce since the June – August period, taking total employment in HK to 3,673,300.
| Period | Manufacturing | Construction | Import/export trade and wholesale | Retail, accommodation and food services | Transportation, postal and courier services | Professional and business services | Public administration |
|---|---|---|---|---|---|---|---|
| July – September | 6.8% | 6.8% | 4.1% | 7.2% | 4.8% | 3.4% | 2.0% |
| August – October | 6.1% | 6.4% | 4.1% | 6.9% | 4.8% | 3.3% | 1.9% |
| September – November | 5.8% | 5.6% | 3.9% | 6.3% | 4.8% | 3.0% | 1.7% |
The best performing sector was the construction sector, where unemployment rates dropped by 1.2% in 3 periods. Although the construction and consumer-related sectors improved the most, they are still suffering from higher-than-average unemployment rates.
Considering that the unemployment rate in the construction and F&B sector reached over 11% at its peak last year, the fact that businesses are willing to hire again comes as great news that businesses are growing increasingly confident.
Challenges from a Fifth Wave?
As Hong Kong re-enters social distancing restrictions, uncertainties surround whether the job market and unemployment rates will be negatively impacted. The increasingly restrictive international travel policies and delays to the border reopening with Mainland China comes as a blow for many businesses that rely on cross-border trade and tourism.
The government’s “zero-COVID” policy will mean that any outbreak will be quashed by implementing increasingly stricter social distancing measures. Sectors that are highly susceptible to impacts from the consumer market like F&B and retail will feel the squeeze from the restrictions.
Whether the spread of the Omicron variant in Hong Kong becomes severe is yet to be seen. The upcoming Chinese New Year holidays will mean businesses are unlikely to resume hiring activity till after the break. The early holiday gives the market a chance to bounce back in the second half of Q1 as operations pick up again.
The success of containment will determine the impact on the job market and future unemployment rates. As the job market deals with the seasonal year-end drop and the caution over the spread of Omicron, Job postings are set to remain relatively weak for Q1, however, we are cautiously optimistic that the 2022 job market will be strong provided that the government can avoid continued waves of lockdowns.
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