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HK hiring expectations rise

Carol Ko | July 9, 2009
Employers optimistic that Asia's recovery will begin by year-end

Mark Carriban, managing director, Asia, Hudson, comments: Hiring expectations are rising again in most sectors. However, expectations are still much lower than a year ago and it is too early to say that the green shoots' are here to stay.

Sharp fall in hiring expectations over past year

A look at the year-on-year change in hiring expectations puts this quarter's upturn in perspective. Expectations in all sectors are much lower than this time last year. In the third quarter of 2008, 42 per cent of respondents planned to increase hiring, while the corresponding figure for this quarter is 22 per cent. In the same period, the proportion of respondents forecasting staff reductions has risen from 1 per cent to 12 per cent.

High level of optimism about Asia's economic recovery

Respondents were asked when they expected Asia's economy to begin recovery, given the current market climate. Overall, 28 per cent expect recovery to begin by the end of this year, a much higher figure than for the other markets surveyed in Asia. A further 31 per cent anticipate recovery by mid-2010, while only 18 per cent say they are unsure, far fewer than in the other markets. This suggests a high degree of optimism about the economy.

Motivation and retention are the most critical people-related issues

Employee motivation and retention are seen as the most important people-related issues to be addressed over the next 12 months. Across all sectors, 19 per cent of respondents mention these issues. Career development and communication are also seen as key issues, being cited by 15 per cent and 14 per cent respectively. Remuneration and reducing headcount are not seen as particularly important: they are mentioned by just six per cent and four per cent respectively.

Trend towards lower starting salaries for new managerial staff

Across all the sectors surveyed, 37 per cent of respondents say the current economic climate means they can negotiate lower salaries for new managerial staff. When this question was last asked, in the third quarter of 2008, the corresponding figure was just 13 per cent. This suggests that the balance of power in salary negotiations has moved decisively in favour of employers. However, there are some variations between the sectors and skilled candidates in niche roles still command high salaries.

Extent of reduction in new managerial staff is limited

Where employers are able to negotiate lower salaries for new managerial staff, the extent of the reduction is likely to be fairly limited. Overall, 36 per cent of respondents say they can reduce starting salaries by five per cent or less, while 41 per cent are achieving reductions in the range of six to 10 per cent. Just three per cent are able to make savings of more than 20 per cent. This suggests that most candidates are sufficiently confident to refuse positions with salaries significantly lower than their expectations.

 

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