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Author: Vicki Fan, CEO Hong Kong, Mercer
As the first cycle in the zodiac calendar, the Year of the Rat is one that signifies new beginnings. As many sectors reflect on a challenging 2019, and as instability and uncertainty continue into 2020, the question hanging on all our minds is – is the new beginning one to a brighter day or a bumpy ride?
Employers across Hong Kong’s industries are keeping a close eye on the market and planning their people agenda accordingly. In a recent survey, almost two-thirds of our clients told us that they expect business and financial performance in 2020 to be similar to that of last year. To manage potential risk, many are taking a conservative approach to investments, with 61% of businesses indicating their budget allocation for recruitment would be reduced in 2020.
In the face of what seems to be a cautious forecast, where are the bright spots? Cross-border opportunities continue to be at the top of the agenda, with many organisations leveraging a regional approach to growth as they seek to balance risk in specific markets including Hong Kong. Digitalisation remains a beacon, with innovation and cost efficiencies at the core of the digital agenda. We know that 82% of Hong Kong’s executives anticipate significant disruption in the next three years, with technology transformation a major driver.
In the face of growth opportunities, businesses should be mindful of the implications of digitalisation on the workforce. For many organisations, the digital agenda is closely connected to the people one. While the current economic conditions have put pressure on HR budgets, employers will need to balance carefully the short-term tactical needs, with the more strategic, growth-oriented and sustainable ones. Businesses that don’t invest now in preparing, evolving and upskilling their current workforce for what will drive success in the future will be hard pressed to meaningfully innovate and transform.
The issue of legacy continues to be a challenge to business success, particularly in well-established organisations with a complex operating infrastructure. Many businesses struggle with change management, which has traditionally been treated as a technology issue and relegated to IT. More and more we are seeing businesses take ownership of change, and clients are increasingly partnering with us to tackle change as a holistic business-driven initiative. Often, the tools to implement change exist, but successful change is dependent on the readiness of organisations and a practical, incremental roadmap that maximises value-add and minimises disruption.
Whether it’s marketing strategies, digital and innovation, or strong workforce planning, it’s clear that doing much of the same in 2020 isn’t going to cut it if the aim is to achieve growth. By investing in the right changes and balancing immediate pressures with future opportunities, 2020 might just bring brighter times to businesses that are ready for it.