Hong Kong firms’ recruitment drive to remain subdued as Covid-19 pandemic weighs on economy, KPMG says

Companies in Hong Kong will remain conservative in hiring new employees while salaries will mostly stay frozen even as the economy is likely to recover this year
Companies in real estate and financial services to lead the headcount recovery, with activity likely to pick up in the third quarter

Coronavirus Hong Kong

Nadia Lam

Published: 7:30am, 29 Apr 2021

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Companies in Hong Kong will remain conservative in hiring new employees while salaries will mostly stay frozen even as the city’s economy is likely to recover from the coronavirus pandemic-induced recession this year, according to KPMG.

“Most key professions expect to remain at similar pay ranges as the previous year,” said Michelle Hui, director of executive search and recruitment services at KPMG China. “Generally, employers have tightened their headcount and salary budgets through a number of approaches, such as sharing the workload among team members rather than hiring new people.”

Employers are also more open to hiring less experienced candidates to take on similar roles rather than increasing the pay for specific positions when making new hires, Hui said at a media briefing on Tuesday to release the accounting and consulting firm’s fifth annual employment trends survey.

The city’s unemployment rate rate rose to 7.2 per cent in February, the highest since 2004 as the job market continues to remain under pressure from the Covid-19 pandemic that has hit the retail, tourism and food and drinks sectors hard. Hong Kong’s economy shrank by 6.1 per cent last year, the most on record.

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International ratings agency Fitch, however, forecast that growth in Hong Kong will recover to 4.5 per cent this year, alongside a rebound in the global economy, following two consecutive years of contraction.

“Companies are still very careful and cautious in their estimates,” said Jerry Chang, managing director at the recruiting firm Barons & Co. “While companies are not actively firing people, they are actually letting people naturally leave, and then they don’t replace them and just wait so that they could control their cost at the moment and ensure things are still functioning as efficiently as possible.”

He also said that new recruits will have to take on more responsibilities than they did in the past until more resources could be allocated.

Chang anticipates hiring activity to pick up in the third quarter, while KPMG expects companies in real estate and financial services to lead the headcount recovery.

The KPMG survey, which was conducted in January, recorded responses from 702 business executives based in Hong Kong and mainland on their views on the job market and career opportunities in the city and the Greater Bay Area.

The consumer industry still faces challenges, with only 24 per cent of Hong Kong respondents expecting an increase in headcount and 37 per cent anticipating further decreases.

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Hong Kong’s retail sector has been severely affected by the downturn, with sales plunging by 24.3 per cent last year, following an 11.1 per cent decline in the previous year.

The survey found that more than half the employees had no change in salary and the actual bonus payment was lower than the already reduced estimates in 2020 because of the pandemic.

In the wake of the economic uncertainties, more business executives – 65 per cent versus 52 per cent in 2019 – were willing to relocate from Hong Kong to other Greater Bay Area cities, according to the study.

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