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Leaders in Hong Kong are aware that reduced talent supply may escalate their bottom-line costs, according to a new study* by Korn Ferry . 

In fact, forty-six per cent of leaders surveyed in Hong Kong agreed that skilled talent shortages may limit their growth. 

Forty-six per cent and 65 per cent of Hong Kong’s and Mainland Chinese’ c-suite believe their organisations are safe from the talent crunch in 2030, vis-à-vis 52% of leaders worldwide. Although 74% of leaders in Hong Kong said they think technology will surpass people as their greatest value creator between 2018 and 2030, 58% still ranked people (workforce, talent and skills) among their top priorities when developing and executing their company’s strategy. This is in line with their aggressive plans to grow headcount to prepare for business growth: 84% of organisations intend to increase headcount by an average of 27% by 2020 to 38% by 2030. 

“The explosion of technology has vastly hastened the pace of business development. Flexible forecasting and business modelling are now more relevant than the traditional models, such as five-year plans,” said Michael Distefano, President, Asia Pacific, Korn Ferry. “While scenario planning is critical to business growth, this rarely extends to a ‘people plan’. As skilled workers become the lever of growth in the new economy, organisations must shift this mindset to become more agile and adopt a long-term approach when devising their talent strategy.” 

“Out of the 20 economies in our initial research, Hong Kong is predicted to be hardest hit by talent shortages as a percentage of its economy,” said May Knight, President, Asia Pacific, Korn Ferry Advisory. “Though many companies in Hong Kong are already sourcing skilled talent internationally, it is not a sustainable solution in the long run. Hence, it is vital for companies to continually evolve their talent management strategies to maintain a strong talent pipeline.”

Looking ahead, organisations in Hong Kong are predicting that digital skills will be highly relevant to their success. The top five roles leaders view as critical are: Information security, Digital analytics, Big data analytics, Digital product development and Digital marketing.

To deliver their strategies, 90% of leaders in Hong Kong have a formal forecast for their skilled talent needs. But only 2% of Hong Kong leaders have plans that extend through to 2030. Although Hong Kong leaders are anticipating which roles will be most impactful in the future of work, 74% say they find it easier to create action plans around technology and other tangible assets, citing a perception that companies underestimate talent shortages as an organisational risk and short leadership tenures as contributing factors.

C-suite in Hong Kong say they would mitigate talent shortages by paying a salary premium to attract skilled talent; investing in their employer value proposition; reconsidering where they focus their organization’s growth strategy, investment, and geographic footprint; increasing their use of outsourcing and offshoring; and implementing mass retraining throughout their workforce. 

The study also reveals a misplaced sense of optimism across Mainland Chinese organisations on their ability to meet their skilled talent needs for the future:

      65 percent of business leaders are confident their organisations can meet the talent needs of the future, despite potential talent deficits of 6.7 million workers by 2030. Only one in ten (10 percent) leaders have a formal forecast for the skilled talent they need to deliver their strategy that extends as far as 2030.

·         A huge majority (90 percent) of executives believe they will need more highly skilled workers as a percentage of their workforce, only 35 percent believe there will be a deficit of these most-scarce employees by 2030. 

Even as leaders in Hong Kong bet on tech, they also recognize that its ability to drive business will rely on human skills, with 78% of them agreeing that technology itself will create the need for more highly-skilled jobs. 

Globally, organisations are gearing up to prepare the workforce for the future, although technology is a distraction for some:

·         When it comes to retraining their workforce, almost all (93 percent) business leaders in China and nearly three-quarters (73 percent) in the U.S. agree that companies’ ability to continuously reskill and redeploy their workforce will be critical to success.

·         Business leaders prioritize technology over talent, with 74% of executives saying by 2030 tech will overtake people as their biggest value creator.

·         Attitudes towards technology vary widely across different regions. Half (50 percent) of US business leaders believe technology will make people largely irrelevant, whereas in China only a quarter (25 percent) hold this view. The UK falls in the middle but is still more people-positive than the mean average, with 39 percent of all leaders taking this stance.

·         Less than half of leaders in the UK consider technology to be a priority at all (48 percent), with only Singapore leaders showing less concern for digital development (44 percent). At the other end of the spectrum, 39 percent of Indian business leaders named technology as their top priority.