- Population increases and continued economic expansion are likely to keep labour market conditions in Hong Kong buoyant
- Despite economic growth, overall wage pressures have eased in Hong Kong over the
- Growth in Hong Kong’s participation rate has slowed this year, driven by flat youth participation rates and its ageing population
While Hong Kong’s economic growth is expected to maintain its momentum over the next twelve months, wages are expected to grow at a slower rate nearer to historical norms according to the seventh edition of the Hays Global Skills Index (‘the Index’), a report published by recruitment experts Hays in conjunction with Oxford Economics.
This year’s report – titled ‘Investing in the Skills of Tomorrow: Avoiding a Spiralling Skills Crisis’ – examines professional employment markets across 33 countries and markets and measures the ability of companies to access skilled workers, providing a unique insight into the health of the global labour market.
In Hong Kong, the Overall Index score is 4.3, suggesting that its labour market is less pressured than historical norms. The Overall Index score is an aggregate of the seven key indicators which were chosen to highlight supply-side issues, demand-side issues, or both supply- and demand-side issues relating to the hiring of skilled workers.
Although the overall score has not changed, wage pressures in Hong Kong have decreased considerably this year. Wages are expected to grow, but at a slower rate nearer to historical norms. Population increases and continued economic expansion are likely to ease labour market pressure in Hong Kong in the medium term.
Across Asia*, general participation rates have been driven up by improvements in education levels and other socioeconomic factors. This year, however, a slowdown in the growth of labour market participation rates across various age groups has been a major driver of the region’s higher score. Businesses are therefore struggling to find the right talent and continue to suffer from low productivity levels. This particularly resonates with the current Hong Kong employment market, which has one of the highest labour market participation scores in the region, indicating a relatively small talent pool in the workforce.
The ageing population in Hong Kong is likely to start becoming a limiting factor for labour supply in the longer term, with total population stagnation and then decline projected beyond 2050. The lower score compared to previous years in this respect indicates the smaller pool of workers available.
Commenting on the findings of the Index, Dean Stallard, Managing Director at Hays Greater Bay Area said:
“The Index provides us with invaluable information about labour markets and whether the global workforce is equipped with the skills required to flourish in the rapidly developing world of work. This year’s Index has revealed the many issues currently in the labour market globally, such as the growing talent mismatch, widespread productivity puzzle, ageing population, gender pay gaps and the shirking share of the national income for workers.”
“The Asia Pacific’s average Overall Index score, which remained at 4.6 between 2017 and 2018, exposed the alarming signs behind the global lack of growth in productivity and wages. Labour productivity in the region has flatlined in the face of an ageing population.”
“In order to prepare for an ageing workforce, policy makers will need to focus on improving the employability of workers at an older age by facilitating the training necessary to update their skills. While greater international migration would help boost labour supply and address the ageing workforce in some countries, some argue that migrants can only play a temporary role given they too will inevitably age. Certainly, finding other ways to boost productivity will help offset the impact of an ageing population.”
*In Asian countries/ regions in which Hays operates: Mainland China, Hong Kong, Malaysia, Japan and Singapore
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About Hays
Hays plc (the "Group") is a leading global professional recruiting group and is celebrating its 50th anniversary this year. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2018 the Group employed 10,978 staff operating from 257 offices in 34 markets across 20 specialisms. For the year ended 30 June 2018:
- The Group reported net fees of £1.072 billion and operating profit (pre-exceptional items) of £243.4 million;
- The Group placed around 77,000 candidates into permanent jobs and around 244,000 people into temporary assignments;
- 19% of Group net fees were generated in Australia & New Zealand, 26% in Germany, 24% in United Kingdom & Ireland and 31% in Rest of World (RoW);
- The temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;
- Hays operates in the following countries/regions: Australia, Austria, Belgium, Brazil, Canada, Mainland China, Colombia, Chile, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Romania, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA