Morgan McKinley Hong Kong Hiring Update November 2011

Morgan McKinley | Hong Kong
Hiring Market Update - November 2011

morganmckinley.com

Hiring Market Update | Hong Kong
November 2011

INTRODUCTION

Hong Kong’s strong hiring market of 2010 continued well into 2011 with increased levels of hiring seen
across the board. Demand was particularly high in sales & marketing and technology within the commercial
sector, and risk & compliance within the financial services sector. The insurance hiring market was also
robust with actuaries, underwriters and claims specialists remaining highly sought after.

Hong Kong’s GDP slowed to 5.1% year-on-year in Q2 2011, a decline from 7.1% in Q1. There was a
significant drop off in hiring volumes in Q3 11 within the financial services sector as the European debt crisis,
poor U.S. economic data and a decrease in mainland growth affected global markets and Hong Kong
significantly. The commercial sector remained relatively buoyant however, with continued growth in the
consumer goods industry (specifically retail and luxury brands) due to demand from local and mainland
consumers.

Though the outlook for Hong Kong’s economy is clouded by the instability of global financial markets, we
anticipate this period of low visibility will be short lived. Once the markets regain strength we expect there to
be a bounce-back in hiring.

We recently surveyed over 1,050 senior level operational and HR managers working across the financial
services and commercial sectors in Asia Pacific. As part of our ongoing commitment to keep our clients and
candidates up to date with the latest trends in the recruitment sector, we asked them about their hiring plans
for 2012 and the challenges they expect to face in the Hong Kong market over the coming year.

In this Hiring Market Update you will find a summary of our findings. To make it as relevant as possible to
you, the results have been separated into two sections: financial services and commerce & industry. We
trust that you will find this information useful and we welcome your feedback. We would also like to take this
opportunity to thank our valued clients for their support in 2011 and wish everyone a very prosperous 2012.

Nick Lambe | Managing Director | Morgan McKinley Hong Kong
T: +852 3907 3931 | E: nlambe@morganmckinley.com

Australia | China | Dubai | France | Hong Kong | Ireland | Japan | Singapore | UK morganmckinley.com

November 2011

KEY FINDINGS

Financial Services

The majority (75%) of senior level operational and HR managers working in financial services
institutions in Hong Kong are concerned that current global uncertainty will significantly affect Asia
Pacific as a growth market.

More than half (60%) of employers believe headcount restrictions will be a major factor influencing
hiring levels over the next 6-12 months.

Recruitment strategies appear mixed, with 35% of companies planning to reduce headcount in some
areas and hire in others, 29% focused on hiring only and 26% still unsure of their plans for the period.

In line with last year’s survey results, talent attraction and talent retention are seen as the main
personnel challenges for the coming year. Managers plan to focus on reward & remuneration and
training & development to address these issues.

Commerce & Industry

Senior managers surveyed across commerce & industry were less concerned (45%) about global
market conditions affecting growth in Asia Pacific than their peers in the finance sector (75%).

Almost half of employers surveyed said they would look to hire within the next six months, with a further
23% unsure of their plans and 20% implementing job cuts in some areas and hiring in others.

Of those companies planning to increase their ranks, half believe that hiring volumes will be similar to
2011. Positively, 38% anticipate their hiring volumes will be higher in the next 12 months, compared to
the previous 12 months.

Mirroring the results of the financial services survey, commerce & industry managers cited talent
attraction and talent retention as the main human resources challenges on the horizon.

Pleasingly, the percentage of employers concerned about handling redundancies was low at 5.4%
(compared to 24% for Hong Kong financial services managers and 14.5% for Singaporean commerce &
industry managers).


November 2011

FINANCIAL SERVICES

Market Trends

In our recent survey of senior level operational and HR
managers working across a range of financial services
institutions in Hong Kong, the majority (75%) are concerned
that current global uncertainty will significantly affect Asia
Pacific as a growth market.

At the time the survey was undertaken, one of the prime
concerns was that contagion of the eurozone debt crisis would
pull the global economy into a double dip recession. Although
EU leaders formalised a deal to tackle the crisis in late
October 2011, Italy has since overtaken Greece as the prime Do you believe that current global uncertainty will
significantly affect Asia Pacific as a growth market?
threat to stability. The escalating crisis was the main agenda
item at the recent G20 Summit and should continue to dominate headlines, and finance professionals’
concerns, over the coming weeks.

Due to the uncertain economic landscape, it is not surprising that almost 60% of managers believe
‘headcount restrictions’ will be a major factor influencing hiring levels over the next 6-12 months, followed by
‘market conditions’ (56%) and growth, restructuring and other internal change factors (40%).

Recruitment Prospects

Job cuts and hiring freezes are pushing more and more Americans and Europeans to look east for career
opportunities. In fact Hong Kong was identified – alongside Singapore and New York – as one of the top
three destinations for those looking to further their careers with a move abroad, in a separate survey
Morgan McKinley conducted with 560 financial services professionals in London.


November 2011

Although job creation in markets such as Hong Kong is faster than in the west, the region has not been
unscathed by the financial crisis. People with experience in more mature markets are warned against the
misconception that they will ‘walk into’ a job in Hong Kong. Whilst this is certainly the case for niche skill
sets it may not ring true for all types of professionals.

Cultural and linguistic skills are more crucial than ever given the increased focus on domestic growth in
China and south-Asian countries. Chinese nationals returning home after studying or working abroad are
the most sought-after employees; they are culturally attuned and are also perceived as being less costly to
hire than someone from abroad, as well as easier to retain.

Our survey found that 43% of managers predict that hiring levels across their organisations will be lower in
2012 than in 2011, with 40% expecting levels to remain steady. Recruitment strategies appear mixed, with
35% of companies planning to reduce headcount in some areas and hire in others over the next six months,
29% focusing on hiring only and 26% still unsure of their plans for the period. Of those planning to bring
new staff on board, almost all respondents (97%) indicated that they would be offered permanent positions.
It appears that the bulk (79%) of this recruitment will be driven by replacement hiring.

If further hiring is likely to take place over the next 12 months, what do you think is likely to drive it across your
organisation?


November 2011

Challenges for Hiring Managers

In line with last year’s survey results, talent attraction (50%) and talent retention (47%) are again seen as the
main personnel challenges that will need to be addressed by financial services employers in the coming year.

Respondents to our survey indicated that they would be considering a range of retention strategies, with
reward and remuneration (37%) and increased training and development (41%) being the two most popular
approaches to tackling this issue. As 44% of employers expect there to be staff reductions in certain areas, it
is likely that only professionals with niche skills sets and/or specialist sector experience that will command
salary increases over the next 12 months. Furthermore, bonuses paid within the financial services sector for
2010-11 are expected to be approximately 25-30% down on 2009-10, or even less in some organisations.

Almost a quarter of hiring managers indicated that handling redundancies would be a challenging part of
their roles over the next 12 months. It was interesting to note that this percentage was considerably higher
than the 13% of managers surveyed in Singapore who indicated job cuts would probably be an issue.

As a hiring manager, what do you think are the main personnel challenges you will face over the next 12 months?


November 2011

COMMERCE & INDUSTRY

Market Insight

Senior managers surveyed across commerce & industry were considerably less concerned (45%) about
global economic uncertainty affecting growth in Asia Pacific than their peers in the finance sector (75%).
Hong Kong’s commercial sector has been relatively buoyant in 2011. In particular, the consumer goods
industry (specifically retail and luxury brands) is booming off the back of fast-growing demand from local
and mainland consumers.

The picture is not completely rosy however. The government is adopting a cautious stance, highlighting
that the state of the financial markets in Europe and the US has overtaken inflation as a chief economic
concern, and that the global slowdown is hurting Hong Kong’s exports. Property is one pillar of the
economy which is particularly at risk; home transactions fell for the ninth consecutive month in September
2011 and property prices fell 3% in Q3.1

These jittery market conditions will significantly affect hiring strategies over the next 6-12 months according
to 45% of Hong Kong managers. Company and team performance will also influence recruitment (41%), as
will growth, restructures and other internal changes (34%).

Recruitment Prospects

Despite apprehension in the market, the
recruitment outlook for the year ahead within
commerce & industry is reasonably positive.
Almost half of managers surveyed said their
companies would look to hire within the next
six months (compared to 29% in the finance
sector). Unfortunately 10% of respondents
only have plans to reduce headcount; double
the percentage recorded for their
Singaporean commerce & industry
counterparts. Do you anticipate that your organisation will be reducing headcount or hiring (or
both) in the next six months?

1
The Standard: Tsang warns again as economy, exports slip, 28 Oct 2011


November 2011

Of those employers that do plan to bring new professionals on board, half believe the volume of hiring will be
similar to 2011. Positively, 38% of respondents anticipate that hiring volumes will be higher year-on-year. It
is predicted that the robust consumer goods industry (specific retail and luxury brands) will drive a large
proportion of this demand.

Challenges for Hiring Managers

Mirroring the results of the financial services survey, managers within the commerce sector cited talent
attraction and talent retention as the main human resources challenges they expect in the next 12 months.
Employers plan to enhance their training and development programmes (60%), increase employee brand
engagement (53%) and focus on performance management (47%) in the hopes of retaining key talent.

Pleasingly, the percentage of employers concerned about handling redundancies was low, at 5.4%. It
appears that more commerce & industry managers in Singapore are bracing for job cuts, with 14.5%
flagging it as a challenge they expect to face in the coming 12 months.

As a hiring manager, what do you think are the main personnel challenges you will face over the next 12 months?

We hope this research has provided interesting insight into future trends within the professional jobs market
in Hong Kong. To discuss any of the points raised or your recruitment requirements, please contact Morgan
McKinley on +852 3907 3907.


Suite 3407 Lippo Centre Tower 2

89 Queensway, Admiralty

Hong Kong

Tel: +852 3907 3907

morganmckinley.com

Morgan McKinley Hong Kong Hiring Update November 2011

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