Talent crunch threatens to dull city's financial allure

money-glitz | Staff reporter 15 Nov 2021

A brain drain is threatening Hong Kong's competitiveness as an international financial hub as bankers and fintech experts migrate from the city in search of greener pastures, some experts say.

Others, however, feel that though the challenges are real, they are surmountable.

Kalok Chan, Wei Lun professor of finance at CUHK Business School, points out that with Hong Kong forging stronger links with the Greater Bay Area and the rest of China, the city will continue to have the edge over its competitors as Asia's financial hub.

While Chan is striking a note of optimism, Hong Kong continues to see an alarming decline in its population.

The city saw an outflow of 89,200 residents in the year ended June, leaving its population at about 7.39 million, a decrease of 1.2 percent, the Census and Statistics Department revealed in August.

This came after the city saw an outflow of 100,000 people from end-2019 to end-2020, when its population dropped to 7.47 million from 7.50 million, following the outbreak of social unrest in 2019 and the Covid-19 pandemic in early 2020.

Although the government says the outflow - which includes the movement of residents into and out of the city for various purposes including work and study - is conceptually different from emigration, an executive at a Hong Kong bank says that the situation is worrying as the departure of even a small number of professionals could make it harder to find the right talent.

Another executive at a local bank says one out of four staff who quit over the past year have done so because they are emigrating.

The resignations, which emerged in the fourth quarter last year, became worse over summer and the trend and is expected to continue until next June as it roughly takes a year to emigrate, the executive estimates.

Meanwhile, finance technology experts are job-hopping and demanding pay increases ranging from 20 to 50 percent, he says.

The emigration wave has further slashed the number of skilled workers and professionals in Hong Kong, especially at senior level, leaving local banks facing a talent crunch.

As a result, firms are offering higher packages to woo fintech experts, with a data and tech expert with eight years of experience recently demanding a monthly salary of HK$90,000, the executive says.

HIRING SPREE

Local lenders, meanwhile, are rushing to boost their manpower amid the growing demand for financial services in the GBA, which has a population of more than 86 million.

The Hong Kong and Shanghai Banking Corporation plans to hire 300 to 400 wealth management experts while Hang Seng Bank (0011) also intends to recruit an extra 500 staff, especially for wealth management.

Peer banks including Standard Charted Hong Kong, the Bank of East Asia (0023) and Citibank Hong Kong are also hiring staff to target the wealth market following the launch of the Cross-boundary Wealth Management Connect Scheme between Hong Kong and the GBA.

Edmond So, the general manager at Besteam Personnel Consultancy, says that recruitment for the fast-growing fintech industry has become harder in recent months due to limited supply and rapid growth.

He expects the emigration exodus will start to impact the jobs market early next year.

Global Life Immigration president Eleanor Hui says that the company has been receiving around 30 to 50 inquiries per day - double or even triple the number compared to several years ago - as foreign countries including Canada and Australia ease immigration rules for overseas talents.

And the lower eligibility thresholds and costs for newcomers with skills are being welcomed by Hong Kong professionals, according to Hui.

Canada received around 6,000 applications from Hongkongers for its special immigration plan within three months of its launch in February while Australia granted 4,312 permanent residency visas or immigration visas to people from Hong Kong over the past year, more than double over the previous year and also the highest figure in the past 25 years.

This came after tens of thousands of Hongkongers seized the opportunity to enter the United Kingdom before its "Leave Outside The Rules" policy which ended in mid-July.

Under the policy, those who were yet to get a British National (Overseas) visa, also known as BNO visa, were granted LOTR status at the UK border and allowed to live and work in the country for up to six months.

As many as 47,000 of nearly 65,000 applicants had been granted BNO visas as of end-July, according to the UK government.

The brain drain is considered the third-largest business hurdle for local firms, after cross-border travel restrictions and social distancing measures, says George Leung Siu-kay, chief executive of the Hong Kong General Chamber of Commerce, citing the chamber's earlier survey among its members.

The reasons behind the shortage in human resources also include an aging population and fewer overseas talents coming to the city over the past decade, says Leung.

While pointing out that Hong Kong's ultra-strict pandemic-control measures are driving foreign professionals away from the city, he also warns that Hong Kong will suffer if the talent shortage continues to fester.

STIFF COMPETITION

It is also getting harder to attract talent from the mainland amid stiff competition with the GBA, where salaries have surged.

Leung says information technology experts in the GBA enjoy higher salaries and better prospects over those working in Hong Kong, and as such not many are willing or want to work in the city.

Neighboring Shenzhen is competing with Hong Kong for IT talent, making it harder for the city to attract mainlanders, he says.

To counter the brain drain, Hong Kong's colleges are looking at ways to help bring a new crop of fintech experts to the market.

Chan says the CUHK Business School, which turned out over 2,300 graduates last year, plans to add courses related to fintech and green finance in the future.

The school offers nine bachelor programs and 13 master courses, of which the master of science in business analytics is related to fintech, he says.

However, designing such courses takes time and it is not easy to hire instructors with relevant experience, but a way around would be to invite experts in those fields as visiting professors for now, Chan says.



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