Current State of Hong Kong’s Talent Market: Talent Outflow and Countermeasures

In recent years, Hong Kong has been facing unprecedented challenges in the labor market. Amid changes in the economic environment and rising geopolitical tensions, a significant outflow of the labor force has become apparent. In this article, we will detail the current state of Hong Kong’s labor market, explore the causes behind this talent outflow, and introduce the countermeasures being taken by the government and businesses.

Current Situation of Hong Kong’s Talent Market — Talent Outflow

Hong Kong’s macroeconomic environment has been on a downward trend since 2017, and geopolitical tensions and economic uncertainty have further negatively impacted exports, investment, and consumer sentiment.

Especially, the most serious population outflow in the past 60 years has occurred. Between 2020 and 2023, about 530,000 people had a net outflow, mainly consisting of a decline in the young working population. Compared to the pre-COVID year 2019, the labor force in 2023 decreased by 170,000, with a particularly significant drop in the age group of 25 to 39 years old. According to the data, the labor force aged 15 to 24 decreased by 83,800 people, and the labor force aged 25 to 39 decreased by 143,500 people. In contrast, the labor force aged 60 and above increased by 95,800 people.

Causes of Talent Outflow

Strict COVID-19 prevention regulations
Hong Kong introduced extremely strict anti-epidemic regulations to curb the spread of COVID-19. These regulations lasted for a long time and had a major impact on the city’s overall economic activities and business operations. For example, the period before companies could resume normal business operations was prolonged, and international travel was severely restricted. As a result, many companies experienced a decline in revenue, and while it became difficult to secure and retain talent, they were also forced to cut costs to maintain business sustainability, leading to many workers losing their jobs. In such a business environment, it became difficult to find new business opportunities, and many professionals and technicians chose to move to other countries or regions.

Impact of the National Security Law
The National Security Law, enacted in 2020, has caused anxiety among many citizens and businesses. With the introduction of this law, concerns have spread that freedom of speech and freedom of the press may be restricted, prompting many companies to consider relocating to other regions in order to adapt to the changing business environment. As a result, many highly skilled professionals have left Hong Kong.

Education Environment Promoting Patriotic Education
In recent years, an educational environment promoting patriotic education has been established in Hong Kong. This has raised concerns about children’s education for some families. In particular, parents who prefer international educational institutions or Western education systems are increasingly choosing to relocate to other regions for the sake of their children’s future. As a result, not only teachers but also families with children are increasingly leaving Hong Kong, and it is expected that there will not be many cases where children who have lived abroad for a long time return to Hong Kong to work in the future.

Increase in Immigration Acceptance by Western Countries
Western countries such as the United Kingdom, Canada, and Australia have been actively accepting immigrants from Hong Kong. These countries especially welcome talent with advanced skills and professional expertise, and they have significantly increased immigration approvals for Hong Kong residents. For example, the United Kingdom has offered a special immigration program for holders of the British National (Overseas) passport (BNO), and tens of thousands of Hongkongers have used this program to immigrate.

In fact, according to surveys on immigration trends, many respondents answered that they “plan to immigrate within two years,” citing pessimism about economic development, the education system, and the political environment as main reasons. Additionally, over 30% of Hong Kong’s population is elderly, and amid the ongoing trend of a declining birthrate and aging population, the impact of immigration on the talent market continues. Experts predict that the number of immigration inquiries remains steady at 400 to 500 per month, and immigration is expected to continue for the next 3 years.

Due to these factors, it is unlikely that talent will return in the short term, and Hong Kong’s strength—its talent pool—is becoming diluted. To improve this situation, the government needs to strengthen efforts to attract talent from both within and outside the region.

Hong Kong Government’s Response Measures

The Hong Kong government is implementing comprehensive measures to actively attract and secure talent from both domestic and international sources. The Chief Executive stated in 2022 that “the labor force in Hong Kong has decreased by 140,000 over the past two years,” acknowledging that the outflow of population is a serious issue. In response, the Hong Kong government has introduced various programs focused on attracting and retaining talent with advanced expertise.

Top Talent Pass Scheme (TTPS)
As a key measure, the Hong Kong government is issuing a new two-year visa to foreigners who meet any of the following conditions:

• Those with an annual income of HKD 2.5 million or more
  Aimed at attracting high-income professionals to revitalize the economy
• Those who graduated from one of the world’s top 100 universities and have more than 3 years of work experience
  By prioritizing individuals with high academic qualifications and practical experience, the government seeks to secure a highly skilled workforce
• Those without work experience, but graduated from one of the top 100 universities (with an annual cap of 10,000 people)
  By targeting outstanding young graduates as well, the aim is to attract talent with future growth potential at an early stage.

As of March 2024, nearly 72,000 people have applied for this program, 59,000 have passed the screening, and 44,000 have come to Hong Kong. This result significantly exceeds the government’s initial target of 35,000. In addition to setting a clear target group, the rapid visa issuance process and comprehensive support system have contributed to the success of the program. Due to the high approval rate and the speedy procedures, the program has become attractive to applicants, and the fact that the Hong Kong government provides comprehensive support for incoming talent and creates an environment that allows them to quickly adapt to life and work after migration is reassuring for applicants.

Other Talent Attraction Measures
Apart from the Top Talent Pass Scheme visa program, traditional visa programs are also used for talent attraction:

• General Employment Policy (GEP): Employment visas are issued for a wide range of occupations, accepting individuals with diverse specialized skills.
• Quality Migrant Admission Scheme (QMAS): Targeting individuals with outstanding skills in specific fields, it provides expedited visa issuance and employment support.
• Admission Scheme for Mainland Talents and Professionals (ASMTP): Special visas are issued for outstanding talents from mainland China, encouraging contributions to Hong Kong’s industries.
• Immigration Arrangements for Non-local Graduates (IANG): Employment visas are issued to foreign graduates who studied in Hong Kong, enhancing talent mobility within the region.
• Technology Talent Admission Scheme (TechTAS): Actively attracting individuals with expertise in science and technology fields to promote innovation.

Through these initiatives, Hong Kong effectively attracts highly skilled talent, reinforcing the foundation for sustainable regional economic growth. Looking ahead, the government is expected to introduce additional measures to stay competitive in the global talent race.

Points for Companies to Consider in Talent Acquisition

To secure talent in Hong Kong, companies must adopt a variety of strategies, such as leveraging senior professionals and enhancing workplace flexibility, to support sustainable talent acquisition and foster a better working environment.

Utilizing Senior Talent
In Hong Kong, where the cost of living is high, a growing number of seniors are choosing to remain in the workforce to bridge the gap until pension benefits begin. While senior talent offers the potential for stable employment and valuable expertise, it is essential to consider their health, family responsibilities, and assign roles that align with their physical capabilities. Adjusting work conditions and creating an inclusive work environment can enhance motivation and productivity among senior employees, contributing to a more resilient and diversified workforce.

Workplace Flexibility
A survey conducted by Randstad highlights a strong demand for flexibility in both work location and start times, especially among Generation Z. The findings reveal that 55% of respondents sought “flexibility in work location,” while 65% wanted “flexibility in work start times.” Moreover, 29% of respondents identified a “lack of flexibility in work arrangements” as a reason for leaving a job, with the highest rate observed among Generation Z (ages 18–25) at 41%. In the post-pandemic landscape, workers have increasingly prioritized work-life balance, underscoring the importance of implementing flexible work practices.

Effective Utilization of Limited Labor Resources

To respond to the shifts in values brought about by the pandemic and the evolving needs of the workforce, reforming human resource management is essential. Conventional, one-size-fits-all HR practices make it difficult to attract and retain talent. By embracing diverse talent and flexible work arrangements, companies can pave the way for sustainable growth.

Specific Measures

1. Introduction of Diverse Work Arrangements
   ・Implementation of flextime systems
   ・Promotion of remote work
   ・Flexibility in working hours
2. Review of Welfare Benefits
   ・Enhancement of childcare support systems
   ・Support for senior employment
   ・Health care support
3. Reform of Performance Evaluation Systems
   ・Introduction of merit-based systems
   ・Establishment of fair evaluation criteria
   ・Implementation of evaluation systems that accommodate diverse work arrangements
4. Embracing Diversity
   ・Promotion of Diversity & Inclusion (D&I)
   ・Advancement of women’s participation
   ・Establishment of systems to accept foreign workers

Amid these efforts, it is vital to make the most of Hong Kong’s limited labor resources and pursue sustainable development. By advancing flexible work options and fostering a diverse workforce, companies can strengthen their competitiveness and drive long-term success.

Summary

In summary, Hong Kong is experiencing a significant talent outflow driven by factors such as strict COVID-19 restrictions, the National Security Law, shifts in the education landscape, and expanded immigration opportunities in Western countries. This departure of skilled professionals presents serious challenges to the city’s economic resilience. In response, the Hong Kong government is proactively working to attract top global talent through initiatives like the “Top Talent Pass Scheme.” To navigate this evolving business landscape, companies can make the most of Hong Kong’s limited labor resources and pursue sustainable growth by leveraging senior talent and implementing flexible work arrangements.

References:
1）「調查：兩成港人計劃移民　45%冀兩年內實行」, on.cc, https://hk.on.cc/hk/bkn/cnt/finance/20200920/bkn-20200920160823229-0920_00842_001.html
2）「Hong Kong residents now eligible for special UK visa」, BBC, https://www.bbc.com/news/uk-55847572
3）「Top Talent Pass Scheme」, Immigration Department, https://www.immd.gov.hk/eng/services/visas/TTPS.html
4）「Visas / Entry Permits」, Immigration Department, https://www.immd.gov.hk/eng/services/index.html#tab_b_1
5）「businesses need to step up, millennials and gen z are fundamentally changing the employee-employer power dynamic」, randstad, https://www.randstad.com.au/businesses-need-to-step-millennials-gen-z-fundamentally-change-employee-employer-power-dynamic/