The instability of the European and the US economy has caused multinational companies headquartered in the region to take a cautious approach to hiring.

Commenting on the current global economy, Prof. Raymond So Wai-man, Dean of School of Business at Hang Seng Management College does not think highly of the economy. He says, "I would say it's even a bit gloomy. As we can see, the eurozone is currently undergoing a debt crisis, so everybody should be happy if we don't see negative growth in Europe in the coming quarters. For the US, the economy is still facing the potential of a slow-growth path, whilst Hong Kong's growth is also low, lower than two percent. Even in the strong economy of China, as we can see recently, some problems arise as the economy is slowing down a bit with a decrease in industrial production."

Prof. So points out that the unemployment rate is relatively low in Hong Kong, so there won't be storm and rain in the job market in the short term. However, the problem of talent shortage persists, and he believes that the situation will continue in the coming quarters.

"To sum up, the overall economic and employment outlook is not that poor. The economy may not sour, but I won't say it is very positive. There's nothing to cheer about. I believe organisations will be acting more cautiously in terms of hiring. The employment market in Hong Kong looks set to remain cautiously steady," says Prof. So.

Although Prof. So's anticipation of the economy is just so-so, Mr. Anthony Thompson, Senior Managing Director of Michael Page International expresses optimism about the prospects of Hong Kong's employment market.

"Generally there are still lots of activities driven by positive news from Mainland China in Hong Kong, though there's been quite a lot of press about the slowing growth in China. And also in Asia overall it is impacting some industries and sectors. The economy is still strong and is impacting industries and sectors in the region. A lot of multinational companies are going to invest in China," he says.

However, Mr. Thompson admits that negative impact exists within the financial services sector due to the concerns about the economy in Europe and the US. "It's causing a reasonable level of caution, but it's not going to affect other industries. Not to mention the financial services sector, the market overall is reasonably robust. We've been here in Hong Kong for over 18 years, and the activity level we have at the moment, that is the number of jobs are high," he adds.

No doubt there are some difficulties in Europe and the US. For European and US organisations with offices in Hong Kong, will their hiring strategies be affected? Mr. Thompson answers, "Despite the strong business conditions in Hong Kong, the instability of the European economy has caused multinational companies headquartered in the region to take a cautious approach to hiring. Companies where decisions are made outside the region could be affected by global hiring freezes. That is a concern."

"The positive side," he adds, "is that lots of the multinational companies are still very interested in growth, and one market they can invest with confidence is China, and particularly places like Hong Kong, which has all the advantages as a comfortable gateway to China. Undeniably Hong Kong has hugely benefited from the growth of the
nation."

In Hong Kong, the retail industry is lourishing due to the large number of ainland travellers to the city.

Most Promising Industries
Mr. Brien Keegan, Director – Hong Kong of Randstad Hong Kong Limited agrees that the solid growth in China is beneficial to the employment market in Hong Kong where the consumer and retail industries are flourishing due to the large number of mainland travellers to the city. "Tourism from Mainland China is growing, resulted in a particularly positive retail and luxury brand market. In fact, Hong Kong's presence in this area is rising as headquarters for luxury brands in Europe are increasing their presence in Hong Kong, China and Asia."

Apart from the retail and luxury brand sector, Mr. Keegan says that the construction industry is promising too as more projects for public infrastructure will take place in Hong Kong, creating a large number of job vacancies for the job market. In the meantime, since many insurance companies are looking to capture the opportunities of the emerging economy, Asia is now becoming an insurance hub and many regional roles are being placed in Hong Kong.

Most Sought-after Talents
When it comes to the type of talents that organisations are craving for, Mr. Keegan says, "Multilingual candidates are having competitive advantage. And talents who can manage knowledge information, business, and can drive revenues will continue to be sought after. In the future, we are going to have a skilled knowledge workforce, specialist skills continue to be in demand across a range of sectors in Hong Kong. Knowledge rich roles like project managers, multilingual sales, communications managers will be important."

Mr. Thompson says, "Looking at the world of finance, there will be continued demand for individuals who have skills within sales and compliance and governance, whilst talents who have the ability to generate revenue are highly sought after, that could be within services industry, manufacturing, consumer products or IT&T." He also highlights the strong demand for HR professionals, whose role is getting more strategic.

Overall Positive Sentiment
According to Michael Page's latest research, most employees have reported that they are confident about the strength of their professional job market with 42 percent saying it is strong and 40 percent average. 30 percent of survey respondents looking for a pay rise of 16 percent or above.

"We are surprised that the majority of employees are very confident about the job market. Most employees felt that there are opportunities for them to make a move and to increase their salary. I think for the most part that's correct. The market we expect to be relatively similar as in the previous quarters. If you are a talented candidate there will be many opportunities to consider. Generally for the majority of industries in Hong Kong, market sentiment is reasonably positive, the level of hiring activity is rolled up. There are clearly some concerns about the financial services sector as the nervousness in relation to Europe, but the general sentiment is pretty positive, so should there be no big change in a global scale, we are expecting to remain positive and Hong Kong is probably one of the best places in the world to be working, given the kind environment."

He also expects to see headcount increase. "Certainly there are still many progressive organisations who look at growth and the advantages of Asia being a very positive place to be compared to other parts of the world. I think the headcount increase will be more conservative than the market in like 2007 or 2008. But much of the organisations exist to increase headcount because they want to grow."

Mr. Keegan says, "There is a bit of nervousness around where we can attract talents and ways to increase workforce productivity. With unemployment at record low and demand for skilled professionals high, our findings show filling critical vacancies created by increased turnover or business expansion is already a key productivity challenge for more than one-third of Hong Kong employers. And key talent retention also raises concern given the issue of employee trust."

Trust and Intangible Benefits
As Mr. Keegan explains, less than half the organisations surveyed rate their current leadership capabilities as good and just 4 percent as excellent, highlighting the importance of strengthening leadership in most Hong Kong organisations. Employees confirm the need for improvement, with 61 percent rating their managers' ability to motivate and inspire their team as average or poor. More noteworthy is that trust has declined over the last 12 months — 38 percent of employees do not trust their organisations' leaders as compared with 32 percent in 2011.

"Employee trust is a key factor that affects a talent's decision for whether go or stay. It's therefore important to build up trust in the workforce. And intangible benefits are also essential elements in engaging talents."

Mr. Keegan points out that in the past organisations mainly focused on tangible benefits such as monetary return. However, today's talents not only look at the salary, but also intangible benefits like corporate culture, development opportunities and communication of an organisation. Leaders should work to develop a culture of trust and accountability where employees are engaged with higher productivity.

In view of the ever-changing economic and employment landscape, there are three key business concerns for the majority of organisations:

There will be continued demand for individuals who have skills within sales and compliance and governance in the world of finance.

Key Concern I: Employer branding
Mr. Thompson says, "Candidates are becoming more interested in the organisations they work for. They could be looking at the corporate social responsibility policy of an organsiation, how tech-savvy is the organisation to embrace social networking, growth plans and security of the business…All these are getting more important because candidates are wanting to see not just what the job is, but what could be in one year or two years.

He suggests that organisations should make sure they have a good corporate image to represent themselves as successful employer branding has a considerable impact on the attraction and retention of talents.

Mr. Keeagan adds, "A positive employer brand provides clarity around job security. The No. 1 factor that globally people look for is financial health and security of an organisation. According to our research, those who believe they are succeeding in attracting top talent certainly put it down to the strong reputation of their employer brand (41 percent), or strong industry appeal (21 percent). The employer brand certainly supports and creates a work culture where intangible benefits such as mission, pride, status, job satisfaction increase retention and employee satisfaction."

Key Concern II: Cost Control
All organisations, particularly in times of uncertainty, look at cost control, Mr. Thompson says. "There's obviously some concern over cost, and that links to the pressure to reward people in a challenging market. Therefore, remuneration and benefits, compensation and benefits, and looking at things like salary review, bonus plan will continue to be a focus." Due to the focus on cost control, the demand for talents within the HR related area is very high, especially those who can help with recruitment and retention strategy. "Given the organisations continue to be cost cautious, maximising the output from talented people is a focus at the same time. Organisations need to ensure that people feel rewarded and satisfied in their role, because it is very costly to replace talented people. So retention is a major focus for most progressive organisations. I think in many respects HR practitioners are going to be more important in Hong Kong and are given more responsibilities as a true business partner, and their strategic advice is gaining more weight."

The growing popularity of social networking urges organisations to embrace the irresistible trend.

Key Concern III: Social Networking
We all witness the growing popularity of social networking. It is having great impact on our daily lives, not to mention the workplace. Mr. Thompson says, "There's a great difference between organisations with social networking policy and those who haven't got one. Social networking is not going away. It is having a greater role to most employers. Organsiations should ensure they have effective practical social networking policy in place, and organisation that can embrace social networking will definitely enjoy a competitive advantage."

He holds that the challenge for employers is to ensure social networking is more positive to their organisations instead of causing issues. "HR people need to have strong understanding of social networking: what it means to the organisation and the people, and how they are going to implement policies that are practical.

War for Talent Continues
Speaking of the widely discussed war for talent, Mr. Thompson expects it will continue, and will even be more serious. "The market continues to be quite strong. If you are a very good candidate, you would have a lot of opportunities to consider. So it's very important for employers to recognise and make sure they are doing everything possible to keep their best people, and make sure they can see a long-term career in the organisation. When looking to recruit, it's important for employers to make sure they are putting their best foot forward and selling their opportunities to candidates as well, because the best candidates could be very choosy. So the war for talent continues, and I expect for very strong candidate the competition will continue for many months to come."

Mr. Keegan points out the problem employers encounter when finding their ideal talents, "Employers always look for the perfect person for the role who is out of pool. You have to be aware that sometimes the talent you want may not be available in the market. In this case you may consider using an HR organsiation to find what you are searching for.

Even you have found the talent that you think is 100 percent an ideal person for the role, he/she may be ideal for a short time and will soon get bored and move on to something else. So employers need to be mindful if they are attracting people at one door, and the talents are leaving at the other door."

Final Hints
In conclusion, Mr. Thompson and Mr. Keegan share their final hints. Mr. Thompson says, "To talk about employers, I would suggest that they need to understand the role of HR has become far more important. If they are not already using their HR specialists as business partners, they should. From an HR perspective, it is really important for organisations to realise that it's not just salary that is driving the decision of candidates to join or remain in an organisation. They are interested in career development, employer branding, and the long term potential within the organisation."

Mr. Keegan advises, "The workforce is ageing. From our research we see more than half (53 percent) of the interviewees believe the ageing workforce will have a negative impact on their organisation over the next decade. Therefore, planning for the future of work is crucial. Besides workforce planning, care for employees and employer branding are also the key areas for us to look at. Organisations should have more frequent review. Not only to attract talents in traditional ways, but also to embrace the trends of social media, which is changing the way we find talents."

References:
1. Employee Intentions Report, Michael Page International Hong Kong, 2012/13
2. Randstad World of Work Report 2012/13