Hong Kong’s hiring market to remain soft as employers are concerned about challenging economic outlook: KPMG

Jobseekers in Hong Kong should not get their hopes up in case they are looking to land a job or switch employers, as companies are pessimistic about the overall economic outlook.

Slightly over a quarter of companies expect to raise staffing levels this year, compared with 37 per cent last year, while some 16 per cent expect to reduce headcount because of a slowdown in business activity in the city, according to a KPMG survey on Thursday.

While hiring sentiment in the real estate sector was the poorest followed by financial services, the overall outlook was generally low across most industries compared with last year, according to the consultancy’s annual Executive Salary Outlook, which surveyed more than 1,100 executives and professionals.

“Overestimating the bounce-back from the pandemic, headwinds facing the property sector and the mainland’s slow economic recovery have led to a slowdown in hiring,” KPMG said. The impact was particularly felt by the property, financial services and consumer sectors, the report added.

Innovation and technology, however, remained the most buoyant in terms of increasing headcount, reflecting the sector’s growth momentum and support provided by the government.

Artificial intelligence and other new technologies present this sector with strong growth prospects, KPMG said.

Nearly half the hired candidates in the sector came from mainland China, boosted by Hong Kong’s visa scheme to attract talent, according to the report. Knowledge of the Chinese market was among some of the crucial skills needed in the workplace.

As a result of the poor prospects in Hong Kong, nearly three quarters of jobseekers were not averse to relocating within the Greater Bay Area. The top three factors enticing professionals were better career and industry prospects, higher pay and exposure to a greater breadth of work.

“The talent landscape in the Greater Bay Area is poised to become more diverse and comprehensive,” said Kitty Lu, director of executive search and recruitment at KPMG China. “Going forward, professionals will need to be not only technically proficient, but also innovative, collaborative and adaptable, to meet market needs in the region.”

Hong Kong’s consumer sector could see reduced staffing levels this year. Nearly a quarter of respondents expect to cut jobs this year, a sharp spike from 8 per cent in 2023. The softer sentiment comes from a drop in post-Covid spending, according to KPMG.

The Hong Kong Tourism Board estimates spending per overnight visitor could shrink by as much as 16.4 per cent to HK$5,800 (US$740) this year from HK$6,939 in 2023. This is despite a forecast of a 35 per cent increase in visitor numbers to 46 million in 2024.

“Employers are closely monitoring their people costs due to decreases in consumer traffic,” said Roy Pang, human resource director at Imaginex Management, one of the participants in the survey. “Going forward, actions such as store consolidations may be considered, which would contribute to the tightening of overall headcounts.”

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In 2023, the proportion of respondents reporting a job change reached a three-year low, reflecting a combination of market uncertainty and challenges in matching talent with job positions.

Some 43 per cent sought new job opportunities in 2023, but only 15 per cent actually changed roles. This was less than the 23 per cent who switched jobs in 2022. This points to challenges around companies failing to match talent with job positions and employees lacking the specific skills sought.

While professionals looking to make career moves may need to upskill to meet the needs of the market, decision-making, data analytics, communication skills and business awareness are the most crucial capabilities in the workplace, according to KPMG.

“As organisations transform and new technologies emerge, we are seeing more professionals looking to upskill to ensure they are future-ready and able to add value in the workplace,” said Kate Munroe, the head of people and change advisory at KPMG China.