While the labour market is performing well, rising wages in high-skill industries linked with a moderate talent mismatch present the main challenges for Hong Kong, according to the Hays Global Skills Index released by recruiting experts Hays in collaboration with Oxford Economics.
Overall, Hong Kong scores 3.7 on the Index, compared to the average of 5.1. The Hays Global Skills Index creates a score for each country between 0 and 10 on the constraints and frictions being faced by its market for skilled labour. This is calculated through an analysis of seven components, covering areas such as education levels, labour market flexibility, and high-skill wage pressures.
A score above the mid-point of 5.0 suggests that employers are witnessing difficulties finding the key skills they need and are suffering market friction, whilst a score below 5.0 indicates a lax labour market in which there are no major constraints on the supply of skilled labour. Within these overall scores however, the scores attributed to each of the seven components can vary significantly, highlighting the different dynamics and pressures faced.
The Index shows that each country surveyed faces specific issues in its skilled labour force. 16 of the 27 countries are currently suffering some degree of labour market tightness, despite the global economic slowdown – an economic paradox.
The unemployment rate in Hong Kong is lower than before the financial crisis, but the health of the economy scores at 7.2 on the Hays Global Skills Index. This is due to the economy operating close to full employment and output, and there’s evidence of mounting inflation, according to the report.
In terms of economic fragility, Hong Kong scores 5.3 with government exports and finances appearing to remain sustainable at the current growth rates.
“Hong Kong has a relatively young population and has high levels of education and labour market flexibility that has enabled employers to source candidates from overseas,” says Marc Burrage, Regional Director of Hays in Hong Kong.
“The common usage of the English language has also helped widen the pool for talent for sectors such as financial services. However, strong levels of economic growth has fuelled demand for staff which has led to high levels of shortages in specific industries and occupations.
“While the young population should give a long-term advantage, it means there are often not enough senior candidates coming through the ranks for the top posts.”
To combat the mismatch of skills availability and demand around the world, the Hays report proposes a long-term three-point action plan for policymakers. First, governments should focus on the skills their economies lack and take appropriate measures to attract the relevant people through targeted immigration. This would in many cases require an overhaul of existing work visa arrangements. Second, employers should be offered fiscal incentives to increase their provision of relevant training. Third, governments should work with employers and educational authorities to implement a series of measures and incentives to persuade young people to acquire the skills that are most needed on both a country and international level.
To see the full Hays Global Skills Index and report, please go to www.hays-index.com/
Hays, the world’s leading recruiting experts in qualified, professional and skilled people.