Hong Kong: The Covid-19 pandemic is causing wage increases

While a new wave of contamination is currently taking place, Hong Kong is also faced with a shortage of workers fleeing very strict detention and quarantine rules. For those who chose to stay, the opportunities to get a golden job became plentiful. “They are more in demand than a year ago. »

Interviews with headhunters, for executives and employees in industry, finance and digital have become frequent. “When there’s a talent shortage, people take advantage of it to raise their salaries,” said Christine Houston, managing director of executive search firm ESGI, which focuses on the financial sector.

An exodus of workers

There are 140,000 more people leaving Hong Kong this year than those who came. This is one of the largest waves of migration the city has seen. The number of new visas issued to foreign financial service workers dropped to 2,569 last year. A decrease of almost 50% compared to 2018, according to calculations based on government data.

And that was before Covid’s Omicron variant penetrated Hong Kong’s defenses, prompting the government to implement the toughest restrictions and social distance measures in the world. The threat of a mass testing campaign combined with a citywide lockdown and long quarantines that made business travel and family visits abroad impossible pushed the foreign workers. Hong Kong Chief Executive Carrie Lam has changed recently. It postponed the trial plan and shortened the quarantine to seven days in hotels for incoming travelers. But the damage has already been done.

Companies were forced to stay

Companies operate with long -term visions. Leaders fear to redeploy a large number of employees to other sites and see the local market lift. More complicated, the companies are afraid to offend Chinese government officials, who have greater influence in the territory after widespread protests in 2019. Many Wall Street banks occupy the glass and steel towers of the central business is drawing up ambitious expansion plans for China’s mainland market. .

In early 2003, life almost stopped with the short-term outbreak of the SARS virus, and the benchmark stock market index hit a 4.5-year low. China launched the red carpet on foreigners the following year and the economy began, prompting a boom that lasted until the global financial crisis.

“It’s a war of talents”

Crypto trading platforms are emerging in Hong Kong, producing unicorns such as Amber Group which has been in existence since 2017 and Animoca Brands, an NFT game development studio based on Blockchain technology since 2014. They are adding to the battle for talent. This sector currently provides at least one in 10 new job vacancies in financial services, said Olga Yung, chief executive of recruitment firm Michael Page. Amber Group raised $ 200 million from investors last month. Its global workforce has quadrupled since February 2021, and it is looking for staff in Hong Kong with backgrounds ranging from traditional finance to human resources and legal services. “Because of our profitability, honestly, we can pay as well if not better than anyone,” Amber Group co-founder and CEO Michael Wu said in an interview, without giving details. . “This is a talent war. »

Cynthia Wu got a small salary cut when she left the Hong Kong stock trader in 2018 for a job in crypto. In the beginning, there were instances where new hires didn’t even show up on their first day on the job, that’s how skeptical this new industry is. He is now the business development manager for crypto startup Matrixport. Although the sector is increasingly becoming part of the financial mainstream and offering competitive compensation packages compared to traditional financial firms, it still faces a talent shortage, he said. Matrixport is looking to expand its team to approximately 40 people.

Sustainable or not, these gold wages?

Wage inflation in the financial industry has been a “significant issue” over the past 15 months and has accelerated this year as a wave of layoffs sparked a bidding war for outstanding talent, says John Mullally, regional manager of Robert Walters in Hong Kong, a company that specializes in recruitment. Another problem is that some people are now overpaid, he added. In the short term, there is certainly an opportunity for people to take advantage of market dislocation, but in the long term, that’s not a good thing. This could expose the winners of outsized salary increases to a sharp reversal if Hong Kong becomes a big draw for expats again, or if companies start moving jobs elsewhere in a big way. size, the headhunter checks. A recent survey by the European Chamber of Commerce in Hong Kong found that almost half of the European companies surveyed planned to partially or completely move their operations and staff out of the city.

A senior executive at a major Wall Street bank in the city, who wishes to remain anonymous, said the influx of layoffs has prompted wage increases of 25% to 35% since June for mid-level workers in sales and trade when they switch companies. But he added that, if Hong Kong leaders decide to leave the “zero Covid” policy without frequent rule changes that have angered locals and expats, the city will once again become a magnet for financial workers. “If there’s a roadmap, and if we’re sure they’re not coming back, I’m telling you that Hong Kong will move on right away and people will start coming back,” he concludes.

SourceBloomberg

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