Human resources experts call for measures to attract global talent back to work in Hong Kong, such as affordable housing, quality education, and better employment packages. Oswald Chan reports from Hong Kong.
The talent outflow from Hong Kong has seen its biggest ever increase since early this year, with the financial services and professional service sectors being the most affected, followed by those in senior management roles in multinational companies, according to global human resources agency ECA International.
A host of factors contributes to the exodus, including the city’s strict social distancing and quarantine measures; concerns for children’s education; relocation of companies; corporations’ flexible work arrangements; as well as loosened visa requirements and attractive work permit programs in foreign countries.
“Hong Kong is certainly losing its appeal to global talent and it will have a serious impact on the local economy,” ECA International’s Asia regional director Lee Quane tells China Daily.
“The restrictions in place and the absence of a clearly communicated strategy for both loosening restrictions and reopening to the world presently makes it difficult for companies based in Hong Kong to attract talent from the Chinese mainland and overseas countries,” he says. “Hong Kong’s relative lack of appeal will hinder its recovery from the pandemic. It will lose out to other economies, notably Singapore.”
We need to make greater efforts to attract new skilled workers and retain our existing highly-skilled workforce if Hong Kong wants to keep its status as a major global city.
Lee Quane, Asia regional director at ECA International
The special administrative region’s Census and Statistics Department said in August that the city’s population stood at 7.29 million by mid-2022 — down 1.6 percent from mid-2021. The fall was attributed to a natural decrease of 26,500 in the number of people (with deaths surpassing births), and a net outflow of 95,000 people (outflow of residents surpassing inflow of one-way permit holders).
Billy Mak Sui-choi, associate professor at Hong Kong Baptist University’s Department of Finance and Decision Sciences, estimates the latest population decrease represents up to 2 percent of the city’s total workforce. And some homegrown professionals in the advanced producer services industry, such as lawyers, accountants and architects, have left the city.
Proper and timely solution required
“But I do not think there will be a large-scale talent exodus from Hong Kong in the future. When Hong Kong relaxes all of its quarantine measures and with the city’s business potential in certain industry segments, such as accounting or the initial public offering business, it may attract another batch of overseas expatriates coming here to work,” Mak says.
Wu Yanhui, associate professor of economics and management and strategy at HKU Business School, believes the talent outflow problem involves mainly the middle class. “The problem can be solved by migrants from the Chinese mainland’s middle class because Hong Kong is still attractive to them. Free flow of human capital between the mainland and Hong Kong can stop the labor shortage problem in the medium run.”
However, in the long run, if the outflow of talent is not dealt with properly, it will have a long-term impact on Hong Kong’s productivity and competitiveness.
Hong Kong already faces an aging population problem, with more old people and fewer young people. So, the outflow of younger people, which is pretty severe, will exacerbate the aging problem in Hong Kong society, Wu warns. “Structurally, if Hong Kong is to maintain a global economy, it needs more people from outside, not just people from the mainland.”
With an aging population and a low birth rate, Hong Kong is increasingly dependent on labor migration to facilitate economic development. “The brain drain risks leaving Hong Kong with an older and less productive population. We need to make greater efforts to attract new skilled workers and retain our existing highly-skilled workforce if Hong Kong wants to keep its status as a major global city,” says Quane.
“The brain drain will affect the well-being and income levels of Hong Kong residents. The economy may suffer both from the lack of direct spending from high-income earners and the lower levels of government income through taxation. This will drag down economic performance and may require the government to rely on income from other sources (such as widening the income tax base to include lower-income earners). This may have a detrimental impact on the economy.”
Economics experts and human resources agencies say the HKSAR administration should implement some tangible policies or measures to attract and retain global talent if Hong Kong is to keep its global city status.
“In the future, the administration has to cultivate proactive policies in areas like housing and the provision of international schools to attract talents. Moreover, Hong Kong needs to provide accurate information for overseas talents so that they can cultivate the right perception in deciding whether or not to come to Hong Kong to work,” says Mak.
“Currently, people are losing confidence in the future. As people’s decisions are based on their future expectations, the urgent task for the SAR government, if it wants to attract talents, is to manage people’s expectations of the future and maintain Hong Kong’s high-quality education opportunities,” Wu says.
“Many mainland students are taking courses in Hong Kong and they are more flexible than local students. They will stay in Hong Kong if the city’s economy and job prospects are good. These graduates can be a source of labor supply,” he adds.
Quane, however, believes Hong Kong’s immigration policy is still attractive to global high-value skilled talent as as foreign employees with work visas have the right to work and to apply for permanent residency after living and working in the city for a period of seven consecutive years and declaring that they wish to settle permanently in Hong Kong. But the government should realign its social distancing and quarantine measures with those of other world cities, such as Dubai and Singapore, to prevent global talent from taking up jobs in those places.
Besides a proactive government policy, employers are urged to improve their employment packages.
Lancy Chui Yuk-shan, senior vice president at ManpowerGroup, Greater China, says employers should “engage employees and make their employees’ happiness a priority”. Companies should embrace the hybrid work mode and use technology to retain workers, while employers should consider offering work-from-anywhere jobs to the right talent to widen their pool of candidates.
Employers can also consider providing a more appealing expatriate package in terms of salary, housing allowance, educational aid for children and travel expenses for visits to home countries to help expatriates keep up with the cost of living, says Chui. The government, on its part, should evaluate the effectiveness of various work programs, such as the Telecommunications Opportunities Program, the STEM Internship Scheme, the Quality Migrant Admission Scheme and the Technology Talent Admission Scheme, and improve on them. The administration could also introduce measures to improve the living environment and tackle social issues, such as housing supply, to retain talent.
Hong Kong companies may have to raise their salary offers for overseas candidates to encourage them to relocate to Hong Kong instead of other locations which may offer a more attractive living environment. But “this would increase the cost of doing business in Hong Kong for many companies already suffering from years of poor economic performance,” says Quane.
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