HONG KONG, April 7, 2020 /PRNewswire/ — The demand for talent with innovation and technology skills is set to drive recruitment activity in 2020 across different sectors, as digitalisation becomes an urgent priority for businesses to adapt to the uncertainty over global economic prospects and, more recently, as a key part of business continuity planning in view of the COVID-19 pandemic, according to KPMG’s analysis.
In its fourth year, the annual employment trends survey report, titled Hong Kong Executive Salary Outlook 2020, canvassed the views of 569 business executives, 497 of whom identified as working in Hong Kong.
Increased caution in light of the COVID-19 outbreak will likely lead to more organisations focusing on building robust business continuity plans, with HR professionals expected to be equipped with skills needed to ensure organisational talent can perform its responsibilities effectively and on a sustained basis in unconventional situations.
Murray Sarelius, Partner, Head of People Services, KPMG China, says: “Companies need to be nimble to protect staff and the business. The priority is checking that people are safe and then implementing business continuance plans if they’re available or working out how to react and cope in the new environment.”
The move to digitalise services and conventional processes is reflected in the innovation and technology sector’s strong intention to hire new talent (52% of respondents), an increase on last year from 44%. The survey also finds 92% of respondents in this sector receiving a bonus in 2019, indicating the sector’s rising profitability.
C-suite executives and HR professionals name ‘open-minded management culture’ (33%), ’embracing change’ (32%) and ‘agile and flexible workforce management’ (30%) as being the more important elements needed in a workplace.
Michelle Hui, Director, Executive Search and Recruitment Services, KPMG China, comments: “Working from home has become a matter of health and safety, and it means companies must manage risks that encompass compliance, cost, capacity, capability and connectivity. We see more business leaders calling for a reassessment of the HR function and how it can respond to the changing dynamics of the business.”
In the financial services sector, corporates have continued their embrace of digitalisation evidenced by the announcement of new virtual banking licences in the first half of 2019 by the Hong Kong Monetary Authority. This milestone has already created dozens of opportunities in general corporate functions, including HR, risk, compliance and finance, with hundreds more positions to follow.
For the professional services and public sectors, employment outlook remains relatively stable, with 23% and 26% respondents expecting headcount to increase in 2020 respectively. Forty-six percent in professional services also reported an increase of more than 10 percent from their salary review in 2019, indicating considerable efforts in that sector to retain talent.
In contrast, wary sentiment is pronounced in the consumer markets sector and real estate sectors, which are expected to significantly reduce hiring in order to keep business going, with 41% and 27% respondents forecast headcount reduction this year as compared to 18% and 8% in 2019 respectively. Frontline operational staff will be directly affected as people reduce social outings and their in-person patronage. However, the impact of COVID-19 could be more difficult to predict for the real estate sector, depending on whether it is able to diversify property usage away from shopping outlets and commercial office space and explore data centres and warehouse centres.
Hui says: “As firms face challenges in meeting regulatory requirements on licensing, compliance and anti-money laundering, salaries are continuing to rise for compliance professionals in banking and the insurance sector. Market volatility has also fuelled demand for rigorous credit risk management as well as risk management professionals.”
This year’s survey has seen a slight increase in the desire for ‘job security’ as a driver for seeking a new job (up from 19 % in 2019 to 21 % in 2020), higher tolerance of work load and work pressure (down from 26% in 2019 to 22% in 2020), less demand for work flexibility and work-life balance (down from 35% in 2019 to 30% in 2020). This change may in part reflect less inclination among candidates to take risks in their job search. Consistent with Hong Kong executives’ sentiment in 2003 when the city faced SARS, this trend may be more strongly represented with increasing concerns about the economic impact of COVID-19 and measures taken internationally to prevent its spread.
Thirty percent of respondents changed employers in 2019, but the actual salary increment for switching jobs may not have been as high as the overall group of respondents had expected. According to last year’s survey, 71 percent of respondents expected a salary increment of 20 percent or more when seeking job opportunities. However, only 32 percent of respondents had indeed received such a pay increase when they moved to a new job in 2019.
A large number of business executives this year (49%) expressed optimism about technology and innovation job opportunities in the GBA, as well as financial services (34%) and professional services (28%). Shenzhen is likely to be the biggest winner of this trend as the GBA’s hub of technology and innovation, with 48% of respondents naming it as their preferred city to relocate for work.
Higher income was the most important driver for Hongkongers seeking new job opportunities in other GBA cities in 2019 (58%), but it is no longer the top reason this year. Instead, 66% of respondents cited better career and industry prospects as their primary motive, followed by travel convenience (60%), broader work exposure (59%) and then higher income in fourth place (48%).
Sarelius comments: “We are seeing increasing demand from clients for design, implementation and ongoing support for equity compensation arrangements. This is a way to attract and remunerate senior talent without significant cash burn consuming capital that can be deployed elsewhere, especially for companies in the technology and new economy sector and those with a growth strategy leading to an IPO.”
About KPMG China
KPMG member firms and its affiliates operating in mainland China, Hong Kong and Macau are collectively referred to as “KPMG China”. KPMG China is based in 23 offices across 21 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Wuhan, Xiamen, Xi’an, Zheng Zhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 147 countries and territories and have more than 219,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG’s appointment for multi-disciplinary services (including audit, tax and advisory) by some of China’s most prestigious companies.
About KPMG Executive Search and Recruitment Services
We are a business unit of KPMG People Services with over 20 years of experience serving clients across a wide range of functions and industries. This sets us apart from the competition, as we are able to draw on the firm’s professional expertise and deep knowledge base.
Working alongside a professional group of advisors, we provide recruitment services as well as insights on the latest human resources and market developments across a variety of businesses and professions.
