Links International’s 2022 Q4 Hong Kong Job Market Updates
Links’ Hong Kong Job Market updates provide 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.
‘Overhiring’ in Certain Sectors Comes to a Slow, Companies More Focused on Retaining Talent
Overall, save for one or two jumps, there were decreases in job postings across most industries this quarter. Accounting and Marketing/Public Relations, for example, saw continued drops over the 3 months, while Admin & HR saw no change from September to October – and then underwent a 4% and 14% decline over the next two months. IT and Sales, CS and Business Development on the other hand, saw an increase of 1% and 6% in October, respectively, and then fell again in November and December.
The accounting market was affected by foreign talent leaving Hong Kong amidst right Covid-19 restrictions. Major financial institutions such as Wells Fargo and Citigroup Inc. shifted some of their operations to other Asian cities, causing a huge gap between the demand for and supply of talent. On that note, more job vacancies cropped up – but as Hong Kong opened its borders and expats considering their return to Asia, the number of openings stabilised later in the year. Similarly for Marketing and Public Relations, a surge in postings in early 2022 happened as companies prioritised building a solid online presence for their businesses and hired more digital marketers. As restrictions eased and businesses could easily operate physically again, the demand for online marketing and advertising fell.
As for roles in IT, the start of the quarter saw them increase, but by year- end they plunged once more, and this is likely due to the wave of retrenchments that we have even seen in tech giants such as Amazon and Meta.
Consumption Vouchers that were given in October are believed to have played a part in the increase of jobs in Sales for that month alone. While the decline has been evident since then, it is hoped that the situation will improve from January 2023 onwards as more travellers from Mainland China make their way to Hong Kong and spent on retail.
Job Market Took a Hit, But Will See Promising Growth as HK and China Both Reopen Borders
The decline in job postings especially at the end of the year took place for various reasons:
- an increased demand in industries such as banking and healthcare for temporary workers. The banking industry saw a crypto boom that fuelled a need for talent – however as crypto crashed in mid-2022, the demand dropped. Similarly in healthcare, due to the vaccine drive and Covid-19-related developments in HK, there were many shoes to fill but the need decreased as the pandemic slowly lost its grip.
- job openings had increased in 2022 to fill up vacant positions left by foreign talent who had exited Hong Kong, but some of these were soon filled up by local employees – this in turn caused unemployment rates to keep dropping as a sizeable number of the workforce had left Hong Kong.
- predictions of an upcoming recession in 2023 saw companies across Hong Kong become more mindful when hiring – especially as global giant corporations slashed their own headcount amidst fears of a recession. Efforts were redirected more towards utilising their existing manpower to their best potential as well as hiring only top talent. The silver lining, however, is that the need for workers is expected to go up in Q1 of 2023 as both Hong Kong and China have reopened their borders.
Unemployment Rate Drops for the Eighth Time
While Hong Kong’s unemployment rates had been falling since 2021, it peaked again by February 2022 – largely owing to the devasting fifth Covid-19 wave, tightened restrictions and border controls. However, by May 2022, the numbers started to drop once more and from then, we have seen the figures decrease 8 more times.
Underemployment rates in Hong Kong have followed almost the same pattern – tiny jumps in numbers from February to May, followed by continuous decreases from June onwards.
The decline in unemployment rates that has been encouraging for job seekers has been fuelled by key factors such as Hong Kong reopening its borders and more foreign talent making their comeback. Government initiatives such as wage subsidies through the 2022 Employment Support Scheme and Consumption Vouchers have also contributed to the surge in job openings that began in the 2nd quarter of the year.
By April 2022, job postings across various industries such as Sales, Information Technology (IT), Marketing and accounting had increased – on average by 30%, signalling a high demand for talent in these fields.
Demand for Frontline Workers Surges, Companies Offering More Perks Beyond High Salaries
Towards the end of Q4 of 2023, reports showed that there was a huge spike in job openings for frontline workers in the catering and retail sectors. A South China Morning Post article showed that in December 2022, there were close to 13,000 vacancies in the catering sector, a 230% increase compared to March 2022.
Co-founder of job-search platform Moovup, Geoffrey Yau was quoted as saying that the massive surge is due to the border reopening and relaxed Covid-19 measures, however employers will have to offer more than attractive salaries to be able to fill these positions. In a similar vein, advertising agency DBB Group’s CEO Andreas Krasser said that to resolve the talent crisis, the right path to take is through “dedicated mentorship, proper growth planning, and most importantly, creating environments that don’t interfere with our people’s wellbeing”,instead of fancy titles and promotions.
HK Job Market to See Better Prospects with Borders Finally Reopening
As Hong Kong has slowly opened its borders over the last few months, we’ve seen certain sectors picking up such as Retail Sales which saw a 0.2% increase compared to the same month in the previous year. Tourism also saw noticeable healing as Hong Kong removed many of its pandemic-related restrictions in a phased-manner and reopened its borders with Mainland China.
We can expect to see the full effects of these in the coming months, as the ease of movement and the introduction of new visas to attract overseas and Mainland talent signal Hong Kong’s plans to increase its workforce. While the minimum wage increase from HK$37.50 to HK$40 will impact around 90,000 workers, there will also be wage subsidies amounting to HK$12.1 billion for 1.57 million employees. This is expected to play a crucial role in increasing the demand for workers in the next quarter and beyond.
Although job-cuts might be inevitable if and when the recession hits, employees and job seekers can take comfort with the fact that companies across Hong Kong still plan on retaining their best staff instead of slashing their headcount. A survey by Aon PLC showed that up until last November, 44% of surveyed employers in Hong Kong felt an increased need to retain older employees in the workforce, and that this would be primary focus for them in the next 5 years.
Want more information and updates on the job market? Get in touch with us and check out our blog to learn more! You can also read our previous Hong Kong job indexes here.