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Rethinking talent acquisition strategies to respond to employee driven market

Rethinking talent acquisition strategies to respond to employee driven market

This article was first published in the Hong Kong Institute of Human Resources Journal on April, 2018 issue.

  • With hiring activities in Hong Kong tipped to remain vibrant during 2018, employers can expect to face stiff competition to acquire talent with the skills they need and fill in-demand roles, according to the latest Hudson Talent Trends Asia report.
  • As Hong Kong employers vie for top talent, in addition to meeting pay expectations, providing soft skills training and offering flexible work arrangements can strengthen the overall attraction and retention proposition.

With the first quarter of the 2018 business cycle completed, Hong Kong business confidence appears to be in a positive mode with employers across the board signaling a strong hiring intentions for the rest of the year. The latest Hudson Talent Trends Asia report, conducted in October 2017 to ask employees and employees about their expectations for 2018, (unless otherwise stated, data and statistics in this article are derived from this survey) found that almost half (44%) of surveyed employers reported that they will be increasing headcount this year. At the time the Hudson survey was being conducted, the Hong Kong government had just upgraded its economic growth target after strong stock and property markets and an improved global environment propelled in the economy to faster-than-expected growth. This rebound, after a two-year dip, signals the start of a jobseeker’s market in Hong Kong as employers vie for top talent.

Jobseekers’ market

Against a backdrop of Hong Kong’s extremely low unemployment rate of 2.9% in the three months to January 2018, and employers’ search for talent, employees in Hong Kong are aware that the job market is in their favor and that they have many options.

The Hudson Talent Trends Asia report found that a quarter of employees are currently actively seeking a new job and over half (56%) of employees surveyed were open to new opportunities. Yet there is also an increase in those who are planning to stay in their roles (20%). This probably has something to do with the fact that most employers agreed that they need to pay more to attract and retain their top talent. Hudson’s research also found that 47% of employers agreed that they need to pay more to attract new hires, with 69% of employers reporting they expect to pay more to attract and hire talent than they did a year ago. As a consequence, employees are keeping an eye out for potential change of job options, but as ling as their employers can match a counter-offer, they may be happy to stay.

The financial services sector leads hiring intentions

Buoyed by the stream of new entrants to the Hong Kong financial services market, of the professionals surveyed, the financial services sector has the largest increase in hiring intentions (59%). In this changing environment, increasingly disrupted by technology, employers are looking for professionals with strong soft skills such as stakeholder engagement to help them to navigate through competitive and sometimes uncertain markets. Yet, available talent that possesses these skills is proving hard to find. The main hiring challenges employers face is finding candidates with the relevant combination of soft and technical skills and assessing candidates to determine the likelihood success in a role.

With an improving economy, more hiring managers in the accounting sector are intending to increase headcount in 2018, compared to a year ago. With 96% of employers looking to increase or at least maintain headcount, significant competition can be expected for top talent with in demand skills and experience. In order to remain competitive in the market, hiring managers are seeking talent with the right combination of soft and technical skills and the right cultural fit for the organization.

Meanwhile, as HR continues to play an ever more business-critical role, the percentage of hiring managers increasing HR staffing levels is expected to increase year-on-year, with over a quarter of Hong Kong business expanding their human resources team. As the same time, experienced talent is in high demand as roles become more specialized. For example, organizations are looking for HR professionals who are proactive I understanding business issues and delivering solutions to virtual teams. Finding candidates with the relevant sift and technical skills and the right cultural fit for the team are among the biggest challenges employers face.

Understanding employee expectations and preferences

With over a half of employees surveyed looking for new opportunities, the Hudson’s Talent Trends Asia report examined what attracts employees to leave a role and what fails to keep them in it. The main reasons for leaving a role or the “push” factors were lack of career progression (24.5%), disappointment with salary (22.9%) and bored and need a new challenge (15.5%). Meanwhile,, what attracted employees to a new role, or the “pull” factors were: the right salary (31.8%), career progression (17.9%) and work/life balance including flexible working arrangements (16.3%). When it comes to salary expectations, at their next review, 75% of employees surveyed said that they expected an increase of 1-10% of their base salary. At the top end of expectations, 14.6% of respondents expected a 10% increase or more. The majority, 42.9%, expected an increase of 0-5% while 32.4% expect an increase of 6-10%.

Equipped with knowledge about employee preferences, what can employers do to keep employers engaged and stay with the organization? Alongside salary incentives, the Hudson Talent Trends Asia report showed that employees are focused on their long-term career paths. For employers, providing employees with meaningful ways to advance their career progression can be a useful tool to attract and retain top talent. Employers also need to acknowledge that the traditional ideas around work and career are changing. The notion of a 9-to-5 job at one organization is giving way to a “portfolio” career and the rise of the gig economy. Introducing flexible working arrangements can offer several benefits. For workers, being able to have some control over their own time management can improve job satisfaction. For employers, it can provide ways to attract new talent and help to create a stronger company culture.

Workplace technologies raise employee concerns

The Hudson Talent Trends Asia report also explored employees’ attitudes on digital transformation and its impact on the workplace. Although sectors are affected differently, more than half of employees surveyed in Hong Kong voiced some concerns about the impact of Artificial Intelligence(AI) on their jobs. This is unsurprising, given that by 2025, it is estimated that some 230,000 jobs in the global capital markets alone are set to be replaced by AI, according to research by consulting firm McKinsey in the effects of automation on jobs, skills and wages, predicts that in 60% of occupations, representing at least one-third of work activities could be automated, and 400 to 800 million people could be displaced by automation in the next 12 years. In an era marked by rapid advances in the introduction of the technologies, resulting in many jobs disappearing or being radically redefined, employees need to be equipped with skill sets to handle creative and complex tasks, where humans do a superior job.

Faced with competition from technologies integrated into the workplace, employees are looking for opportunities that will help them advance their careers and provide them with an employability edge. Salary is important, but so too is the employee need to feel ready and equipped for the future. As technology and AI replace repetitive tasks that don’t require out-of-the-box thinking, it will be the “human elements” pf an employee that set them apart from AI and robots. While employers will be able to acquire machines to tackle routine tasks, it will become more difficult to find employees who excel in soft skills. Consequently, if they want to hold onto their top talent, it is important for employers to offer plenty of opportunities for their employees to upskill and refine their soft skills. If such opportunities are not offered, employers shouldn’t be surprised if their employees are tempted to look elsewhere.

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