The deep impact of Covid-19 has prompted many of the city’s expatriates to leave. In a finews.first analysis, Christine Houston looks at how the professional community can recover.
This article is published on finews.first, a forum for authors specializing in economic and financial topics.
There is little disagreement that the effort to contain Covid-19 has had a deep and extended impact on Hong Kong. There is also little question that this has severely affected the working community.
Regardless of whether they are Hong Kong natives or foreigners who have come here, the numerous school closures, travel bans, and lengthy quarantine requirements when re-entering have prompted large numbers of them to leave.
Many of those who have left work in financial services and, as a result, talent has become increasingly scarce. Many professionals are hired at a premium given there are simply too few professionals to fill the roles of those who have departed.
«Hong Kong has become even more attractive than it was before the pandemic»
But the truth is that Hong Kong has become even more attractive than it was before the pandemic. Rents for flats have fallen substantially and are expected to fall further in anticipation of another exodus of residents at the end of the year.
Schools have an excess number of slots for students. That is a large contrast to previous years, thus eliminating a large headache for parents moving to Hong Kong. Debentures at international schools are down, some as much as by half.
Spouses, male or female, are automatically entitled to work and are generally able to find employment quite easily. The crime rate has always been very low, which is a particularly positive facet given that many major cities around the world are currently facing growing rates of criminality.
«Many mainlanders have absolutely no interest in moving to Hong Kong»
There is a prevailing view in some quarters that the vacant jobs will be filled by professionals from the Chinese mainland. However, this is largely wishful thinking by some. China does have a large population, but many senior roles in financial services require specialists with considerable experience, either in other global financial markets or in collaborating with multinational clients and colleagues.
Is there an adequate supply of them, particularly those with this profile? In short, no. While some senior-level jobs in finance in Hong Kong may require Mandarin (Putonghua) – all of them require the ability to communicate in English.
Moreover, many mainlanders have no interest in moving to Hong Kong, a stark departure from, say, 10 or 15 years ago when mainlanders seemed keenly interested in moving to the city. The reasons for this are varied and range from a belief that China is the economic and geopolitical powerhouse from where they can make their mark, to concerns that trailing spouses will not be able to find jobs due to linguistic difficulties, and the lack of an available family support infrastructure such as grandparents, who often remain very involved in the day-to-day life of grandchildren.
«Singapore is becoming increasingly unfriendly for trailing spouses intending to work»
A common refrain is that everyone who has a choice now wants to move to Singapore. But it is a fact that Singapore has become increasingly restrictive when granting visas, aka “Employment Passes”. The city-state simply doesn’t want and can’t accommodate the number of people in Hong Kong who, at least anecdotally, say they want to move there.
It is also becoming increasingly unfriendly for trailing spouses intending to work, and the rules are expected to be tightened further. On top of that, recent arrivals have complained bitterly that housing costs have greatly increased over the last year and that school places are hard or impossible to come by in some of the more well-regarded schools.
Beyond the challenges of moving a couple or a family, there have been reports of frustration by executives who have moved to Singapore being unable to hire the talent they need due to ever-tightening visa restrictions. They are then forced to hire from the local population even though there may be a shortage of talent in a particular sector and/or type of job.
«Employers will have to provide increased annual compensation packages»
As they have always done, firms in Hong Kong will continue to recruit talent from abroad, although it is likely to be a larger challenge in the future. Initially, employers will have to provide increased annual compensation packages. There may well be a return to providing some expatriate benefits quite common 10 to 15 years ago, including tuition assistance, the provision of a school debenture, and home leave, perhaps for the first couple of years at least.
In the shorter term, or until Hong Kong completely lifts the travel obstacles it has in place, the profile of workers coming here from abroad will change if the city is to remain competitive with surrounding countries. Younger executives with no children may be more willing to come since they would not suffer any of the stress that parents have endured, such as being able to have their children return home to visit close relatives.
At the other end of the spectrum, mature professionals whose children are at school abroad and have finished their education may be interested in coming to Hong Kong. Some might even come here to work on an interim or contract basis for two to three years.
«In fact, Hong Kong has continued to not only survive – but to thrive»
Going back to the 1980s, there have been a number of articles that have predicted the city’s demise. The media said it would happen in 1984 after the Sino-British Joint Declaration was signed, promising the handover of the city back to China in 1997. They said so again in 1989 following Tiananmen Square. Ahead of the handover in 1997, «Fortune» magazine published a cover story titled «The death of Hong Kong», lamenting that «the naked truth about Hong Kong's future can be summed up in two words: It's over».
And yet, despite all that, Hong Kong has continued to not only survive – but to thrive. The economy has doubled in size since 1997. And if the current situation is handled appropriately, it will continue to do so, in an environment where ambitious professionals continue to see the city as a place of great opportunity.
Christine Houston is the founder and Managing Director of Executive Strategies Group International (ESGI). Founded in 1998, the firm specializes in global senior-level appointments in the financial services sector with an emphasis on leadership and diversity appointments in Asia. She was previously Managing Partner of TASA/Hong Kong and head of the financial services practice in Asia Pacific. Prior to this, she was a partner at Korn/Ferry in New York. ESGI has a strong relationship with Schulthess Zimmerman & Jauch as its partner in Asia. The firms collaborate regularly on search assignments for strategic clients.
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