Links Job Index: Job Market Hit by Third-Wave of Covid-19 but Recovers Quickly

Links International’s August Hong Kong Job Market Index

Links’ Hong Kong Job Index (JOB:IN) 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.

Job Market Was Impacted by 3rd Wave but Quickly Rallied at the End of August

The third-wave of Covid-19 has caused the Hong Kong job market to drop but the impact was considerably less significant than the first two waves. Even though the number of people infected in the third-wave was higher than the previous two, the labour market remained resilient and rallied towards the end of the month, indicating companies are adapting to situation and business confidence is stabilising.

An overall 5% drop in the number of job postings was seen in August, which was the largest drop since April. However, in the final week of the month, the number of job postings began to increase again. The fluctuation of the job market has been in tandem with the rise and fall of Covid-19 cases in Hong Kong.

From mid-July Covid-19 cases increased exponentially, seeing continuous days of 100+ cases. The high number of confirmed cases carried on into mid-August leading to the government enacting its strictest social distancing measures and many companies reimplementing work from home arrangements.

Even though this has been the worst wave of Covid-19 in Hong Kong in terms of numbers, the job market reaction has been relatively muted. The 5% drop pales in comparison to the 16% decrease in April, indicating businesses are better prepared for the situation and adapting to the impacts of the pandemic.      

With Covid-19 cases dropping towards the end of the month, the labour market reacted positively with a 3% jump in the final week of August, and we expect this trend to continue until October assuming the Covid situation continues to improve. Job application rates increased as job posting numbers reduced, indicating that unemployment rates may increase slightly or remain level in August.

Source: Links International Job Index
Source: Links International Job Index

Marketing, HR and Sales Functions Suffer but Claw Back Losses at Month’s End

The most affected functions in August have been Admin & HR (9% decrease in postings), Marketing & PR (8% decrease) and Sales, CS & Business Development (10% decrease). IT was the only function to see gains with a 2% increase, while finance job postings experienced a 5% decrease. However, both marketing and sales roles saw a strong recovery in week 35.  Key changes to specific roles included

  • The demand for HR Managers was significantly reduced in August while junior HR positions remained relatively stable although at lower than usual levels
  • Demand for Digital Marketing Managers continued to remain at high levels despite the impact of the 3rd Covid wave
  • Demand for senior finance roles decreased significantly in August
Source: Links International Job Index

Unemployment Rate Improves for the First Time in the Year  

As predicted in our July edition of Job Index, the unemployment rate fell by 0.1% from 6.2% to 6.1% for the May to July period, marking the first time in 2020 that the unemployment rate hasn’t increased.

While we expect the unemployment rate to increase slightly in August given the impact of the 3rd wave of Covid, we are cautiously optimistic that the unemployment rate will not increase significantly further in 2020, assuming that the Hong Kong Government announces further meaningful relief measures for businesses.  If the relief announced is not significant, it is likely that unemployment will increase again once the Employment Support Scheme (ESS) finishes in November 2020.

Support from the Employment Support Scheme & Applying for Tranche 2

The introduction of the Employment Support Scheme (ESS) by the Hong Kong government has cushioned the impact of Covid-19 on the labour market. Businesses are able to apply to subsidies to pay for employee wages as long as they keep them during the subsidy period.

Application for tranche 2 of the ESS has begun and will end on the 13th of September 2020. The second tranche covers the period from September to November 2020 and a new penalty clause has been introduced. To learn more about applying for the tranche 2, read our guide or contact our HR professionals now for an in-depth chat.

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