Serena Ma Hong-yee is a Hong Kong headhunter's dream come true. She is confident, well-presented, speaks English, Cantonese and some Putonghua, and is a graduate in international relations with a few years of work experience. These qualifications sound common for a Hong Kong resident, but the high demand for her skills suggests otherwise. Ms Ma started looking for a job in August and, before the end of the month, she had four firm offers on the table, two of them significantly better than she had expected. The scenario is becoming common as companies scramble to employ the few good candidates that briefly enter the employment market amid the accelerating economy. New figures out this week show that Hong Kong's jobless rate last month improved slightly to 4.1 per cent, the lowest level in almost a decade. The figure is down from 4.2 per cent in August. As skilled workers become harder to find, employers are now warning that the skills shortage will have an impact on corporate profits. 'Historically, it is as bad as it has ever been,' said Gina McLellan, Hong Kong manager of recruitment company Hudson. 'It is dire. Some companies will not be able to deliver on their growth targets. They have got the facilities, they've got the materials and they've got the manufacturing capabilities - they just don't have anyone to do the jobs.' A recent survey of 250 firms by financial and business advisory firm Grant Thornton found that nearly half wanted to increase their workforce next year and a third were worried that a lack of available staff would constrain their growth. 'Clients from different industries have been complaining,' said Daniel Lin Ching-yee, an accountant and spokesman for Grant Thornton. The problem is most acute in the engineering sector, as huge property developments in southern China have drawn experienced engineers away from Hong Kong. The service industry has also been badly hit, with Macau's casino and hotel boom enticing good staff from the Hong Kong hotel industry. 'All you have to do is go out to a hotel and have a cup of tea to notice that the service is really bad compared to what we are used to,' said Mr Lin. Other professional fields are low on talent. Susanna Chiu Lai-kuen, of the Hong Kong Institute for Certified Public Accountants, said firms in Hong Kong were 'chewing up accountants'. She said part of the problem was caused by demand from multinationals on the mainland. Even investment banks are feeling the pinch. Global investment bank UBS recently opened a wealth management training office in Singapore in response to the lack of talent in the region. The office will provide training for existing and would-be wealth managers in the Asia-Pacific region. The talent shortage in Hong Kong is reflected throughout the region. An Economist Intelligence Unit survey this year of 600 chief executives in Asia found that the shortage of staff ranked as their biggest concern. 'Everyone [in the rest of the world] just thinks Asia is going to continue to boom,' said Ms McLellan. 'If you talk to most companies and you ask them, 'What does your US head office think you are going to generate next year?' they will say, 'We've got 50 per cent growth targets', or 'We've got 110 per cent growth targets'. We tell them it is not achievable, but no one [outside Asia] understands that.' Mr Lin warns that many companies in Hong Kong have yet to understand the long-term implications of the skilled staff shortage. 'They really have to face the issue,' he said. 'Most Hong Kong companies are SMEs [small to medium sized enterprises] and they tend not to have any plans; they just deal with issues in firefighting mode and so this has been hitting them quite hard. They think that this is just a cyclical problem and it will go away, but it is going to be affecting businesses for decades.' There are several reasons for the skills shortage. Mr Lin cites the declining birth rate in Hong Kong as a contributor, as well as the shortage of management-level candidates on the mainland which is drawing managers from Hong Kong. Ms McLellan said another theory was that the ageing baby boomer generation was sapping the workforce as children opted to look after their parents. Some firms have commented on the reluctance of the 'spoilt' younger generation to do jobs considered to be unglamorous. The director of careers at Hong Kong University, Herman Chan Ping-kong, said students favoured sectors such as finance over engineering. But by far the biggest reason for the shortage is the extraordinary growth of the economy. Companies appear to be flocking to Hong Kong to take advantage of the buoyant local economy and gain a regional foothold near the booming Asian economies of the mainland and India. As Hong Kong becomes a regional base for these companies, some firms are increasing their headcount here, as well as taking people out of Hong Kong to work in other offices in Asia. Complicating the issue is the strong demand for staff who can smooth the business process for western companies operating in East Asia; those with an understanding of Chinese and western cultures and languages. Employment agencies also say employees need to be able to think outside the box, and some firms complain that the local education system does not encourage this kind of creative thinking. This is why people such as Ms Ma, who appears to have a common skill set, is the ideal candidate for many firms. She speaks Cantonese with her family and understands the Chinese culture, but she grew up in Canada and is familiar with the culture of westerners. To attract this calibre of staff, firms have been raising salaries significantly. In the banking sector, candidates changing jobs this year have been receiving salary increases of up to 20 per cent, according to Guy Day, head of the recruitment company Ambition. As a result, some people are leaving their jobs to chase higher salaries. Recruitment specialists say turnover in some sectors has gone through the roof, and in some cases candidates keep their options open even after they have committed to a new job. 'They will keep interviewing if they think there might be more money in it,' said Ms McLellan. Companies are unhappy about employing people who demonstrate a tendency to 'job hop', but their options are limited. Some firms are employing people who a few years ago would not have got past the first interview, and they are promoting staff to management before they have the proper experience. One option that firms have in a fished-out talent pool is to widen the net, and Hong Kong firms are being encouraged to embrace diversity policies that have long been established in firms in western countries due to concerns over fairness and possible litigation risks. Ms McLellan said banks, in particular, with large staff levels, now recognised the need to consider staff from more diverse racial backgrounds and with disabilities. The other option available to companies struggling to employ the right people is to strive for the all-important 'employer of choice' label, to create a company that everyone wants to work for and no one wants to leave. Mr Day said that, apart from salary rises, strategies becoming more popular were share options, bonuses, training and career development, and opportunities to work abroad. Other initiatives include so-called 'soft' issues, such as a better work/life balance. Sometimes, simply changing a person's title can convince them to stay. A 'supervisor' who becomes an 'assistant manager' may not have more responsibility, but will feel more inclined to show off his business card and less inclined to leave. Mr Day said that, in the final analysis, most staff made a decision to change jobs based on salary. They only see about five to 10 of their candidates retained or 'bought back' by their original company.