THE HUDSON REPORTcthr.ctgoodjobs.hk/doc/trends/2010q4hudson.pdf · The Hudson Report in Hong Kong. Across all sectors, 65% of respondents expect to grow headcount in Q4 2010, the

THE HUDSON REPORT

EMPLOYMENT AND HR TRENDS OCTOBER - DECEMBER 2010

HONG KONG FROM GREAT PEOPLE TO GREAT PERFORMANCE®

© HUDSON GLOBAL RESOURCES (HONG KONG) LIMITED PAGE 2

INTRODUCTION The Hudson Report is an established and highly respected publication, based on in-depth research. Released quarterly, the report uncovers and analyses the hiring expectations of Asian employers in China (Beijing and Shanghai), Hong Kong and Singapore over the coming quarter and provides insights into a range of human resource issues currently impacting business and the broader Asian economy. Combining robust data on employment expectations with commentary and extensive market knowledge from Hudson’s conversations with employers in Asia, The Hudson Report is the leading source for business leaders on the relevant trends and issues in the Asian labour market.

METHODOLOGY The Hudson Report has established a reputation as a key socio-economic indicator in the Asian market. It captures employers’ hiring expectations for permanent workforces over the coming three months. The Hudson Report’s quarterly findings on permanent employment expectations are built on the premise that the expectation to increase or decrease permanent staffing levels represents a significant indication of employers’ optimism for the growth of their organisations. The Hudson Report combines the expectations of key employment decision makers from all major industries across small (<20 employees), medium (20–200 employees) and large (>200 employees) organisations. For the October–December 2010 period over 1,500 employers were personally surveyed by Hudson recruitment and consulting professionals across Asia in August. Participants in Hong Kong were surveyed from six core industry groups as detailed below:

Banking & Financial Services Consumer IT&T Legal Manufacturing & Industrial Media/PR/Advertising


KEY FINDINGS Hiring expectations remain at a very high level. In this survey of nearly 450 executives across key business sectors, 65% plan to grow headcount in Quarter Four (Q4) 2010, the same figure as in the previous quarter.

This quarter, we also surveyed the importance of reference checking, the prevalence of and reasons for dishonesty in resumes, staff turnover and anticipated company performance.

HIGHLIGHTS Expectations are nearly twice as high as they were a year ago: the 65%

planning to hire more staff this quarter compares with 35% in Q4 2009;

Over 90% of respondents say that checking candidates’ references is very important or important;

Overall, 40% of employers have encountered candidates being dishonest in their resumes, a lower figure than for the other markets surveyed in Asia;

Candidates are most likely to be dishonest about their remuneration package and job responsibilities/achievements;

Seventy percent of respondents have seen a change in staff turnover rates over the past six months;

Nearly one-third of respondents are experiencing turnover rates of more than 10%;

Most respondents express a high level of confidence, with 89% saying that their company’s performance will be excellent or good in the next six months.

“For the second quarter running, expectations are at the highest level ever recorded by The Hudson Report, confirming the strength of the economic recovery. However the buoyancy of the job market means that employers must cope with higher staff turnover rates.” James Carss, Executive General Manager – Hong Kong, Hudson

PERMANENT HIRING EXPECTATIONS

EXPECTATIONS STILL AT ALL TIME HIGH Hiring expectations remain at the highest level ever recorded by The Hudson Report in Hong Kong. Across all sectors, 65% of respondents expect to grow headcount in Q4 2010, the same figure as for the previous quarter. None of the respondents forecast a reduction in headcount this quarter.

IT&T The IT&T sector has the highest expectations this quarter: 70% of respondents plan to hire more staff, up from 64% in Q3. Hiring in this industry tends to lag behind that in Banking & Financial Services as financial institutions are reluctant to undertake major IT projects until they feel confident about the economy. The high level of expectations reflects the fact that the continuing recovery in the financial sector is creating strong demand for IT specialists. Professionals with skills in Cloud Computing, Unified Communications and video conferencing are particularly sought after. Telecoms networking specialists are also in demand.

BANKING & FINANCIAL SERVICES Respondents in the Banking & Financial Services sector also report high expectations, with 68% saying they will grow headcount. The hiring cycle in this sector means that this is lower than the 77% reported in Q3. Most financial institutions undertook substantial recruitment campaigns in the first half of the year and are now planning for next year. The fact that only 1% of respondents forecast a decline, in the run-up to the bonus season, suggests that the market remains very buoyant. There is strong demand for candidates with experience in equities, derivatives, IPOs and regulation.

CONSUMER The Consumer sector reports by far the steepest rise in expectations, from 42% in Q3 to 65% this quarter. The retail sector is booming and most companies are confident that sales targets will be met. Demand is strongest for sales representatives with proven revenue-generating capabilities.

MANUFACTURING & INDUSTRIAL Expectations among Manufacturing & Industrial companies are almost unchanged: 60% say they will boost recruitment, compared with 61% in Q3. After being severely affected by the downturn, most companies in this sector are increasingly confident about hiring. Many employers are seeking candidates with operational skills and experience.

LEGAL Among law firms, 57% of respondents expect to hire more staff this quarter. As in the financial sector, many employers undertook major hiring operations in the first half of the year and have now recruited many of the professionals they need.

MEDIA/PR/ADVERTISING Around one-third (31%) of respondents in the Media/PR/ Advertising sector forecast headcount growth in Q4. This is lower than in the previous quarter, when many agencies were hiring very actively as client companies in many sectors boosted their PR and marketing budgets in response to the continuing economic recovery. Most firms have now achieved a stable headcount level and have no plans to cut staff.


PERMANENT HIRINGEXPECTATIONS OVER TIME

HIGHEST EVER EXPECTATIONS CONFIRM ECONOMIC REBOUND Hiring expectations are now almost twice as high as they were this time last year. Overall, the 65% of respondents forecasting headcount growth this quarter compares with 35% in Q4 2009. Expectations were already rising sharply at that point and the fact that they are now so much higher suggests that many employers are very confident about hiring additional staff.

The steepest year-on-year rise in expectations is reported by the Consumer sector: 65% plan to grow headcount, up from only 17% a year ago. Companies in this sector were just starting to recover from a long period of low expectations in Q4 2009, whereas they are now experiencing a booming retail market.

Firms in the Legal sector have also seen a substantial rise in hiring expectations over the past year. The 57% of respondents who say they will hire more staff this quarter compares with a very low 15% in Q4 2009. A sharp decline in business volume in the wake of the downturn meant that the major international law firms were cautious about hiring but they are now much busier and are actively recruiting new staff.

Expectations among IT&T employers have almost doubled year-on-year, from 38% to 70%. Much of the growth in hiring activity is driven by the continuing recovery in the Banking & Financial Services sector as a large proportion of the positions now being filled require skills and experience in financial IT.


EACH QUARTER, APART FROM ASKING ABOUT HIRING EXPECTATIONS, WE SELECT SURVEY TOPICS THAT INDICATE HOW BUSINESSES EXPECT TO COPE WITH THEIR ENVIRONMENT. THIS QUARTER WE ASKED ABOUT REFERENCE CHECKING, DISHONESTY IN RESUMES, STAFF TURNOVER AND ANTICIPATED COMPANY PERFORMANCE.

REFERENCE CHECKING

MOST EMPLOYERS STRESS IMPORTANCE OF REFERENCE CHECKING Across all the sectors surveyed, more than one-third (36%) of respondents regard checking references as a very important part of the recruitment process. A further 55% say that it is important, while just 2% do not see it as important at all. However, there are some significant differences between the sectors in their response to this issue.

Unsurprisingly, employers in the Legal sector place strong emphasis on the value of reference checking. None of the respondents say that it is fairly important or not important, while 71% see it as very important – almost twice as many as in any of the other sectors. Clients’ expectations of honesty and integrity mean that Legal firms see reference checking as a vital aspect of their recruitment process.

Respondents in the Banking & Financial Services sector also see reference checking as a key issue, with 94% saying that it is important or very important. However, stringent reference checking is more likely to be undertaken during the recruitment of staff for more junior positions. In the case of candidates for senior roles, who can add substantial value to the business, the interview process is critical and tends to negate a reliance on references. Employers in IT&T companies place the least emphasis on reference checking. Just 22% say it is very important, a much lower figure than for any other sector, while 14% say it is only fairly important and 8% not important at all. In-depth interviews play a significant role in this industry and it is easier for potential employers to assess candidates’ technical skills than the softer skills required in some other industries. This tends to diminish the importance of reference checking.


DISHONESTY IN RESUMES

NEARLY HALF HAVE SEEN DISHONESTY IN RESUMES

Respondents were asked if they have ever encountered candidates being dishonest about their background or experience in their resumes. Overall, 40% say they have done so, a lower figure than for the other markets surveyed in Asia. However, the likelihood of candidates being dishonest is much lower in certain sectors.

Respondents in the Banking & Financial Services sector are the most likely to experience dishonesty or exaggeration on the part of candidates, with 46% saying they have done so. The falsification of resumes tends to occur more frequently in the context of relatively junior positions, as inexperienced candidates often feel compelled to claim that they have a solid track record.

The lowest incidence of dishonesty in candidates’ resumes is reported by respondents in the Legal sector. Just 14% say they have experienced this problem. This is consistent with the strong emphasis placed on reference checking in this sector as both employers and candidates recognise the importance of a high level of honesty.

Falsification or exaggeration in resumes is also relatively uncommon in the Media/PR/Advertising sector, where 15% of respondents say they have experienced it. This is a fairly close-knit industry where candidates may be known to potential employers and thus unlikely to feel able to submit false information.


AREAS OF DISHONESTY

MAIN AREAS ARE JOB RESPONSIBILITIES AND REMUNERATION Respondents who have encountered candidates being dishonest in their resumes were also asked about the specific areas in which exaggeration or falsification occurs. Candidates are most likely to be dishonest about their remuneration package and job responsibilities/ achievements. Overall, these areas are mentioned by 52% and 47% respectively.

Candidates in the Banking & Financial Services sector are the most likely to exaggerate their skills and achievements: 58% of respondents have experienced dishonesty in terms of job responsibilities/achievements and 42% in the area of skill sets/specific job knowledge. As noted, these exaggerations tend to be made by candidates for relatively junior positions.

Although candidates for positions in the Legal sector are the least likely to falsify information in their resumes, when they do so, it is almost certain to be about pay rather than ability or experience. All the respondents in this sector who have experienced dishonesty say that it is concerned with the candidate’s remuneration package rather than any other factor. False information about years of experience and academic qualifications is relatively common in the IT&T sector. Among respondents who have experienced dishonesty in resumes, these factors are mentioned by 44% and 28% respectively. Both figures are higher than for the other sectors surveyed. These areas are regarded as very important by employers recruiting for specialist IT roles.


STAFF TURNOVER

MAJORITY EXPERIENCING CHANGE IN STAFF TURNOVER RATES Seventy percent of respondents across all sectors say that the staff turnover rate in their company has changed over the past six months. This is a much higher figure than for the other markets surveyed in Asia. As the market continues to pick up, talented candidates are finding that they have many new opportunities. Retaining key members of staff is becoming a major challenge for a growing number of employers. At 84%, the Consumer sector has the highest proportion of respondents reporting a change in the staff turnover rate, by a significant margin. This industry also has the steepest rise in hiring expectations this quarter, as employers recruit more staff to meet demand in the booming retail sector. Sales and Marketing professionals have a wide range of

options and this is encouraging many employees to look actively for new roles. Legal firms are also experiencing significant changes in the staff turnover rate, with 71% of respondents saying they have seen a change in the past six months. Recruitment in this sector fell sharply during the economic downturn and remained flat for several quarters, severely reducing opportunities for candidates. The major firms are now recruiting again and many professionals are ready to move to new roles. Employers in the IT&T sector are the least likely to have seen any change in the staff turnover rate – just 58% say they have done so. As noted, hiring in this industry tends to rise once companies in other sectors, notably Banking & Financial Services, are ready to undertake large IT projects. This means that the growth in hiring expectations needed to boost turnover rates is only now becoming apparent.


AVERAGE STAFF TURNOVER RATE

NEARLY ONE-THIRD SAY STAFF TURNOVER IS ABOVE 10% Respondents reporting a change in staff turnover in the past six months were also asked about the average turnover rate in their company during that time. Overall, nearly one-third (30%) of respondents say that the turnover rate was more than 10%. The figures for certain sectors are significantly higher. Respondents in the Consumer sector are experiencing the highest staff turnover rates, with nearly half (44%) saying they averaged more than 10% over the past six months. As this sector has the fastest-growing expectations and the highest proportion of companies reporting a change in the turnover rate, this is unsurprising. Talented candidates are

finding it easier to obtain new positions as a result of the continuing recovery in the retail market. Although 40% of respondents in the Legal sector report average turnover rates of just 1-5%, a further 40% say that staff turnover is averaging more than 20%. This figure is extremely high and suggests that lawyers with sought after skills have many opportunities to switch jobs. The Manufacturing & Industrial sector has by far the lowest average turnover rates. Over half (51%) of respondents report rates of just 1-5%, while only 13% say that turnover is more than 10%. This is a much lower figure than for any other sector. As noted, some manufacturing companies are seeking candidates for operational roles but there are fewer opportunities available in other areas.



ANTICIPATED COMPANY PERFORMANCE

STRONG OPTIMISM ABOUT THE FUTURE

Although no respondents in the Legal sector forecast excellent performance, neither does anyone expect it to be average or poor: 100% say that performance will be good. In Q1 2010, the corresponding figure was 72%. Legal firms tend to take a fairly conservative approach to performance predictions but this degree of unanimity suggests a high level of confidence.

Respondents in all the sectors surveyed express a high level of confidence about their company’s future performance. Overall, 89% forecast that performance will be excellent or good in the next six months. This represents a further rise from an already high 78% when this question was last asked, in Q1 2010. None of the respondents forecast poor performance with the exception of the Manufacturing & Industrial sector, where the figure is just 1%.

The sharpest rise in confidence is apparent in the Manufacturing & Industrial sector. Just 59% of respondents forecast excellent or good performance in Q1 2010, compared with 84% this quarter. This confirms the strength of the economic recovery and its impact on manufacturing companies. However, the effects of the rebound do not appear to have reached all areas of the industry: 15% say that performance will be average, a higher proportion than for any other sector.

At 26%, the IT&T sector has by far the highest proportion of respondents who expect their company’s performance to be excellent in the next six months. This is a steep rise from just 6% in Q1 2010. The continuing strong recovery in the Banking & Financial Services sector is creating strong demand for IT solutions, driving demand for both technical specialists and sales professionals.

FROM GREAT PEOPLE TO GREAT PERFORMANCE®

CONTACTS

ASIA Mike Game CEO, Asia Tel: (852) 2528 1191 [email protected]

CHINA Mark Carriban Managing Director, Asia Tel: (852) 2528 1191 [email protected]

HONG KONG James Carss Executive General Manager, Hong Kong Tel: (852) 2528 1191 [email protected]

SINGAPORE Georgie Chong Executive General Manager, Singapore Tel: (65) 6339 0355 [email protected]

HUDSON Hudson (NASDAQ: HHGP) is a leading provider of permanent recruitment, contract professionals and talent management services worldwide. From single placements to total outsourced solutions, Hudson helps clients achieve greater organisational performance by assessing, recruiting, developing and engaging the best and brightest people for their businesses. The company employs more than 2,000 professionals serving clients and candidates in approximately 20 countries. More information is available at hudson.com.

Documents

THE HUDSON REPORTcthr.ctgoodjobs.hk/doc/trends/2010q4hudson.pdf · The Hudson Report in Hong Kong. Across all sectors, 65% of respondents expect to grow headcount in Q4 2010, the