Number of job vacancies dips in second quarter but Hong Kong is weathering the economic storm felt in other major economies A generally cautious mood has put a dampener on Hong Kong's otherwise robust economic fundamentals, leading to a slower growth in the number local jobs in the second half of the year, according to market watchers. Latest statistics from the South China Morning Post/admanGo survey, which tracks job vacancies advertised in Hong Kong's six major recruitment publications on a monthly basis, show that recruitment grew by 11 per cent for the second quarter of this year, compared with the same period last year. A total of 79,152 advertisements were posted during the period. However, this is slightly less than the 18 per cent growth experienced in the first quarter of this year. Taken together, in the first half, the number of jobs grew by 15 per cent, compared with the same period last year. This is also less than the 22 per cent growth witnessed in the first half of last year. 'People are still cautiously optimistic,' said Joanne Yim Oi-kwan, chief economist at Hang Seng Bank. She said the decrease in growth reflected growing caution in the market. Hong Kong's economy was externally dependent, so the number of jobs in the second half would hinge on what happened in the United States and other markets around the world, she said. She expects job growth to slow for the rest of the year. This will mostly likely come from the import and export sectors, which are affected by the credit crisis. The retail and wholesale sectors were still generating new jobs for the time being, but she said that with retail sales growth slowing, there might be a chance of a slowdown in hiring in these sectors. The survey showed that among the major industries the greatest growth was in the hotel and catering sectors, where the number of vacancies advertised shot up by 47 per cent, from 3,905 jobs in the second quarter of last year, to 5,759 this past quarter. Also growing in demand were jobs in the banking, finance and investment sectors, which recorded a 31 per cent growth in the number of jobs posted, from 3,402 in the second quarter of last year, to 4,454 during the same period this year. Non-profit organisations recorded growth of 63 per cent, health care 54 per cent, and education and training sectors 20 per cent. Declines were recorded for manufacturing (down 14 per cent), trading (16 per cent), and clothing, fashion and accessories (5 per cent). By job function, there were significant jumps in demand for engineers, surveyors and architects (up 45 per cent), and lawyers and compliance officers (10 per cent). Demand receded for accounting, finance, and insurance (5 per cent), merchandising and purchasing (23 per cent), product and logistics operations, and sales (both by 6 per cent). Guy Day, managing director, Asia at recruitment firm Ambition, said: 'There's a sense of procrastination generally in the job market from candidates and employers, as more time is taken to arrive at a hiring decision.' He said that the length of the hiring process had doubled and was more thorough. Whereas the hiring process for jobs with salaries of HK$20,000 to HK$35,000 used to take two to four weeks in the first half of last year, it now took four to five weeks to complete. Lengthening in the hiring process had occurred in middle-management jobs, with salaries of up to HK$70,000, which now took up to six to eight weeks, compared with as short as four weeks during the first six months of last year. Senior roles, with a salary of up to HK$150,000, now took more than 12 weeks to complete, up from about eight weeks in the first half of last year. Mr Day said hiring cycles were longer because more decision makers were involved and there had been cases where the hiring of junior positions required video or telephone conferences with senior executives in overseas corporate headquarters. Employers have also tightened their hiring requirements and are less willing to compromise on their search criteria. On the upside, he said that job cuts in the US had not been mirrored in Hong Kong and there were no signs that this would happen in the foreseeable future. Employers were also increasingly looking at contractual employment as a stop-gap measure in the cautious economic climate, he said. This had been adopted especially by companies in the financial services sector. 'For [job seekers], the good news is that there are still opportunities out there. We are not in a deep, dark recession in Hong Kong, and the conditions are significantly better than they are in the United States, for example. 'It's not all doom and gloom. There is a lot of uncertainty and caution in hiring decisions and this is translating into candidates in their willingness to make a transition willingly as they did last year,' he said. On salaries, Mr Day said that high performers, who had stayed with their organisations, had pay rises well in excess of inflation. Organisations would have to take into account whether they would raise salaries across the board in line with inflation, but this was far from certain. Some high-quality candidates making a move were still able to command a premium of at least 15 per cent over their previous jobs because of a continued shortage of people with the right skills, he said. Anthony Thompson, managing director, Hong Kong and Southern China, at recruitment firm Michael Page International, said the drop in growth of job advertisements was consistent with growing caution in the market. However, he also noted that the continued growth, in spite of the gloomy climate in other parts of the world, reflected Hong Kong's robust economic foundations. 'I think things will stay as they are. It's not going to be quite as buoyant as last year, but it is still a very progressive growth-oriented economy. Most organisations, with the exception of some of the US and European investment banks, are still hiring in a progressive fashion,' he said. He believes that there will be a shift away from hiring in the financial services sector, into manufacturing, particularly related to consumer goods. But he said that while front office investment banking hiring was expected to cool, demand would remain for other segments of the industry. In contrast, Ian Strutton, head of banking and finance practice at rival firm Talent2 in Hong Kong, predicts that the pent-up demand for jobs in the financial services sector is expected to result in strong performance across different sectors in the industry. This will include positions in investment banks and asset management companies. An exception is for hedge funds. 'Generally, the industry is very conservative with one or two exceptions that have been beefing up their headcount in Asia for the past eight months. The type of people they are hiring take a fairly long process to bring them on board so they haven't stopped that,' he said.