With thorough knowledge of Hong Kong's economic developments, Mr. James Tien Pei-chun, GBS, JP, Chairman of the Hong Kong Tourism Board and Hon. Chairman of the Liberal Party points out that many organisations are still cautious with the economic environment.

"As a leading bank recently announced its downsizing plan, many hesitate about whether they should continue to invest that much in staff development. Influenced by the global economic climate, the prospect of Hong Kong's economy is uncertain. The Europe's debt crisis is under the spotlight and we are still not sure whether Germany and France would be able to tackle the debt crisis and save the whole Euro's region. For the United States, the economy is getting worse with the unemployment rate reaching over 9 percent. Since the Anti-Wall Street movement is spreading to cities across the United States and even to the whole world, we can see there are growing hostile sentiments towards those who benefited most from the economy in recent years, such as the middle and top management of organisations," he says.

Mr. Tien believes that the trend against high-income earners will affect all the countries around the world. It is expected that the governments will no longer implement policies in favour of the senior management and highincome earners. He also expresses concern for the growing disharmony between white collar workers and blue collar workers, and suggests that white collar workers may have to lower their expectations in various aspects including salary.

"I don't think the situation will get worse as Hong Kong's unemployment rate is still low at 3.2 percent, and large corporations are not likely to reduce salary, management and training costs."

Work-life Balance
In addition to his commitment to Hong Kong society on public affairs, Mr. Tien has extensive experience in the commercial and manufacturing sectors, and is currently Chairman of the privately held Manhattan Holdings Limited. Speaking of staff management, Mr. Tien suggests that all organisations, regardless of the scale, should value employment relationship, which is the basis for an engaged workforce.

"Certainly it is important to large corporations, but SMEs also need to maintain good relationships with the working people, as workers today have higher expectations for their jobs, such as promotion prospects and learning opportunities," he says.

Key Trends by Sector
As for the key salary and hiring trends in the fourth quarter of 2011 and the next year, we have divided industries into two groups – Financial services and non-financial services, whilst the non-financial services area is being subdivided into sectors including Information Technology, Retail & FMCG, ospitality & Tourism, Human Resources and Legal.

Financial Services
On the financial services side, Mr. Bennett reveals there wasn't a huge change in people-base salary in 2011. This is due to big changes in 2010 in the financial services area during which employees' compensations were geared to their base salaries rather than their bonuses, with their base salaries increasing significantly in 2010.

"I believe that the industry will probably remain stagnant as a number of banks have not reported right profits, or they haven't met their expectations this year, so I think the salary level in the banks remain stable. We might see increases from anywhere to 3-5 percent on payroll, which is just to keep up with inflation," he continues.

Dr. Raymond Lee, Executive Chairman, Hong Kong Financial Services Professionals Association also expects that the salary level of the financial services industry will be growing with stability, but he anticipates that there will be higher increases in payroll.

"We can see a shortage of talent in the sector where banks compete for talent with higher salaries. I believe that this trend will continue. For general positions, I expect that the increase of salaries would be 8-10 percent on average. As for sales positions, it would be around 10-20 percent," says Dr. Lee.

Non-financial Services
Commenting on latest trends in the non-financial services sector, Mr. Bennett says, "I would expect payroll to increase from 3-5 percent across the board. We did see increases in 2011 and this has to do with the market's rebounding from the economic downturn."

Another issue that raises public concern is work-life balance, says Mr. Tien. "Long working hours, which is very common in Hong Kong offices, prevents people from pursuing worklife balance. In recent years, more organisations in major cities worldwide are aware of the importance of worklife balance. In Hong Kong where many white collar employees often work long hours, work-life balance policy is still not widely implemented. I think that it is time for Hong Kong to look at the issue seriously as it is losing its competitiveness when compared with Singapore or Shanghai."

"We are happy to see that the Legislative Council is now having discussion over the implementation of paternity leave for male employees by way of legislation. I think that the government should encourage the business sector to carry out more family friendly measures, which is also one good way to engage the employees,” he adds.

Hardware vs Software
From Mr. Tien's perspective, government's policy and employment market trends are closely connected. "The latest news of Hong Kong's stock market and property market reflect that the citizens are not optimistic about the prospects of the economy. The main reason behind is that the Hong Kong government has not developed clear policies for hardware development, for example the Kai Tak Airport and the West Kowloon Cultural District."

Mr. Tien points out that besides the new government headquarters, there are nearly no new offices or hotels completed in Central in recent years, which has reflected that the government is not putting enough emphasis on hardware development, and this will certainly affect the investors' interest in Hong Kong. He says, "If we don't have enough hardware, how can we adopt the software (talent) we employed? In other words, it means that there will be no space for talent to display their potential if there is no hardware. I think the government should invest more in the development of hardware, which will create more job opportunities for talent. If we do not develop hardware, Hong Kong's competitiveness will surely decrease."

Mr. Tien suggests that the Hong Kong government consider replanning of old industrial areas like Kwun Tong and San Po Kong to provide more space for the city's development. "To develop hardware creates room for rent decrease, which will help organisations save costs and in return more resources can be used in hiring and developing talent."

When it comes to the challenges facing organisations and HR professionals, Mr. Tien talks about the trend of frequent job change in the working population. "In my company, we tend not to employ jumpy candidates and prefer employing stable staff who will stay in the company for some years. I think organisations, particularly SMEs, won't be able to afford the cost of losing talent that they invest a lot to develop."

Overqualified Job Seekers
Whilst nowadays Hong Kong job seekers tend to be jumpy, they create an interesting contrast to the job seekers in Shanghai. Mr. Tien shares a phenomenon in Shanghai and says, "Now some fresh graduates in Shanghai are not asking for salary in order to get employed. Although Shanghai is commonly seen as a flourishing city with numerous opportunities, many graduates are having a hard time finding jobs. That's why they accept 'zero salary' as long as they are employed and provided opportunities to learn and gain experience. Even their parents support their actions as the parents hope that their children can at least learn something from their work, even though they are not paid. The situation is a bit similar to Hong Kong where there are too many overqualified people but a limited number of job opportunities that cause employment difficulty and shortage of labourers."

Sharpening Generic Skills
With so many overqualified job seekers, what type of talent does Hong Kong need for its future development? "Hong Kong needs people who are more all-rounded with good generic skills. Even professionals like accountants or engineers need general studies. For example, today's HR professionals are no longer administrative, they have to take up more strategic roles to handle new challenges, so whether you are professional or not, you should develop good generic skills to maintain competitive," Mr. Tien answers.

He also holds that the fresh graduates from local universities nowadays are less competitive when compared with graduates returned to Hong Kong from overseas institutions. "If employers employ a graduate who doesn't have the knowledge and skills required for his post, the company will have to invest a lot more to train him up. From the perspective of SMEs, they can't afford the cost."

Managing Gen Yers Nowadays many organisations find it a real challenge to manage the younger generations of the workforce. Mr. Tien thinks that members of the Generation Y, or commonly called the "Post 80s Generation" among local Hong Kong citizens, should not keep grumbling.

He says, "From my experience, every generation has its own difficulty. The 'Post 60s' or 'Post 70s' also experienced a difficult time, so they should not grumble and think negatively. When the economy is good, we may complain about not being able to employ talent we want; when the economy goes down, we are worried about lay offs. I believe the biggest complaint from the Post 80s is the housing issue, and this needs to be solved by the government, not the employers. The employers don't have the ability to tackle it."

To sum up, Mr. Tien mentions three key points as the essentials of good employee engagement practices - work environment, employment relationship, and training and development. "A positive and harmonious work environment encourages employees to work more efficiently. Besides, employers should foster a closer relationship between the working people and the management to build mutual trust and harmony in the workplace. Employers should also ensure that they are giving their staff sufficient training and development opportunities, so that they can learn from their work and enrich their knowledge, skills, and experience," he concludes.