Education and labour market flexibility have created a more balanced labour market in Hong Kong, but wage pressures threaten stability, according to the Hays Global Skills Index. Can Hong Kong deliver the high-skills needed?
The Index assesses the efficiency of the skilled labour market in 30 countries, or its ability to supply skilled labour. The Index scale ranges between 0 and 10, with the higher the Index score the greater the difficulty for employers in findings skills. A score greater than 5 indicates skill shortages; 5 or less indicates few signs of skills shortages.
The score of 4.1 for Hong Kong suggests employers are, for the most part, able to meet the demand for skills with appropriate candidates. But upwards pressures on wages are a clear indicator that highly-skilled professionals remain in short supply.
“The current economic landscape is looking a lot more positive, with Hong Kong’s economy forecast to grow by 2.8 per cent in 2013, up from 1.5 per cent in 2012,” says Marc Burrage, Regional Director of Hays in Hong Kong.
“Education flexibility and labour market flexibility have led to downward pressure and a more balanced labour market.
“But while the unemployment rate for the year is forecast at 3.5 per cent, employers continue to struggle to attract highly skilled and experienced professionals.
“It is a bitter paradox caused by employers being unable to find the highly-skilled skilled workers they need, particularly in more technical areas such as IT, construction and engineering.
“Skills gaps can manifest themselves through wage pressures, a talent mismatch and/or supply. Our Index looks at all three areas.
“Of concern in Hong Kong are the scores for overall wage pressure and wage pressure in high-skill industries, which are threats to the balance of the labour market.
“Hong Kong’s ‘overall wage pressure’ score of 8.7 shows the country is expected to face overall wage pressures above historic norms. We expect to see growth in wages across the whole economy, after allowing for inflation.
“Real wages economy-wide are anticipated to rise by 3.9 per cent in 2013, an increase over last year’s 2 per cent and likely in recognition of increasing productivity among employees.
“There is also a widening in pay differentials between high and low-skill industries, as the score of 5.6 for ‘wage pressure in high-skill industries’ shows.”
According to Hays, in Hong Kong the top five skills in most demand are:
- Internal Auditors
- Engineers (Product and Manufacturing Engineers and Registered Structural Engineers)
- Risk & Compliance experts
- Network Security Consultants
- Commercial and Corporate Bankers
Hays warns that economic conditions alone do not explain why employers find it hard to recruit the right talent, despite unemployment. “The job market needs to deliver the talent necessary for businesses and ultimately societies to thrive,” says Marc. “It is critical for education authorities and businesses to work closely to ensure educational systems are designed to provide students with the skills that their future employers require.”
About the Hays Global Skills Index
The Hays Global Skills Index is a composite figure based on seven indicators. Three indicators explore the supply of talent, namely education flexibility, labour market participation and labour market flexibility. One looks at talent mismatch. The final three are wage pressures indicators, looking at overall wage pressure, wage pressure in high-skill industries and wage pressure in high-skill occupations.
A score of 5.0 indicates a balanced picture for labour markets, a score close to 0 indicates less intense competition for vacancies, and a score close to 10 shows severe difficulty in finding skills.
The Hays Global Skills Index can be viewed at www.hays-index.com/2013
Hays, the world’s leading recruiting experts in qualified, professional and skilled people.