Mr. ShangkongShort-term contracts have dangers and may not even save money

What can an employer do if he wants to hire more people but cannot add more permanent staff to the payroll, because of a freeze on new hires?

One option is to hire contractors rather than full-time permanent employees, a switch that is becoming more and more popular in the Hong Kong banking world.

With the debt crisis in the euro zone and the disappointing economic recovery worldwide, shareholders have urged banks to save costs, and one quick way to do so is to cut jobs. Given that many banks have their regional head offices in Hong Kong, the city has seen its share of the impact of these cuts.

But the work still has to be done, and hiring contractors rather than full-time staff is a way to deal diplomatically with shareholders' concerns about headcounts.

Conversations with my headhunter friends have made me realise it is more and more difficult to get a permanent job offer, especially for junior and mid-ranking positions, at big banks in Hong Kong.

For example, one of the biggest American banks is looking for a marketing manager, based in Hong Kong, to be mainly responsible for its wealth management business. The length of the contract is just six months, with the possibility of renewal for another six months or more, partly depending on the company's prospects by then.

But what would happen if a bank sent someone to a rival to take up a six-month marketing manager's job just to learn about (or, you could say, spy on) what the rival focused on? Hiring contractors does not sound a safe option in terms of keeping your business secrets. It can be argued that marketing jobs only give limited access to sensitive corporate information, but what about public relations managers and human resources specialists? Such jobs are now also available in the market on a contract basis from six months to one year.