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Hong Kong’s retail challenge: Staff turnover and a shortage of workers

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“The wider adoption of technology, and targeted staff training are needed for a competitive edge.”

This was the key takeaway from the latest study on the issues facing companies in Hong Kong’s retail sector.

A shortage of staff and a high turnover rate of employees are considered the major hurdles facing Hong Kong retailers today. The industry also needs to undergo a significant transformation to win over customers and attract prospective talent.

Those challenges, both linked to manpower issues, were second only to high rent (79%) as the biggest hurdle retailers faced.

The just-released report – Minding the Retail Gap: Hong Kong’s talent challenges and future strategies – surveyed 281 retailers with operations in Hong Kong and was conducted jointly by KPMG and the Hong Kong Retail Management Association (HKRMA).

Anson Bailey, head of consumer and retail for Hong Kong at KPMG China, was blunt in his assessment of what will happen if retailers fail to adapt.

“The next generation of talent in Hong Kong needs to be nurtured, and we need to upskill at all levels. If traditional businesses stand still, they are finished,” he said.

Embracing new technology is seen as crucial to the ongoing success of Hong Kong’s retail sector.

“The new era of retail enabled by the latest technologies is essential not only to the customer experience, but also to Millennials setting their sights on careers in the industry,” said Annie Yau Tse, chairman of the HKRMA.

“The bulk of visitors to Hong Kong are Millennials from Mainland China. Most of these people are tech-savvy, so embracing technology will be vital to meeting the wishes of shoppers from across the Greater Bay Area.”

A total of 72% of respondents said the most difficult positions to fill were front line customer service staff and retail salespersons.

Those surveyed said that reinforcing staff training would be their top strategy in the next two years (64%). That was closely followed by providing higher staff incentives (57%), adopting technology-enabled services and/or automation (53%), and hiring more mature or older employees (52%).

“The retail industry is a pillar of Hong Kong’s economy, and its workforce is vital to its continued success. Retaining those who work in retail, and making the industry more attractive to prospective employees, are high priorities,” concluded Alice Yip, head of consumer and industrial markets for Hong Kong at KPMG China.

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