Talent risk remains at the top of the list for C-suite and HR professionals in Hong Kong and mainland China, according to KPMG's recent report.
Over the first half of 2020, talent risk rose from twelfth place to become the most significant perceived threat to the long-term growth of the businesses of the CEOs surveyed.
More than half (51%) of C-suite and HR professionals surveyed ranked talent risk as the top risk to future growth, followed by regulatory risk (35%) and operational risk (34%).
Talent risk is generally seen as the most significant risk in all sectors (51%) except financial services (43%) and real estate (44%), where regulatory (54%) and operational risks (56%) take the number one spot respectively for financial services and real estate, and talent risk comes second.
“Organisations may enhance recruitment and retention by embracing flexible work arrangements, as these arrangements are quickly becoming a common expectation and even a preference. The type of flexibility that these options provide can make potential roles more attractive when recruiting. A challenge for HR and operations teams is how to most effectively bridge the gap between the desire to work remotely and the perception among senior management of a possible negative impact on productivity,” Murray Sarelius, head of people services, KPMG China, wrote in the report.
The greatest risk to company’s development
1. Talent risk (51%)
2. Regulatory risk (35%)
3. Operational risk (34%)
4. Emerging/ disruptive technology risk (24%)
5. Cybersecurity risk (23%)
6. Reputational risk (18%)
7. Return to territorialism (16%)
8. Supply chain risk (15%)
9. Environmental/climate change risk (14%)
Headcount expectations and top must-have skills
Compared with the year before (8%), more respondents working in Hong Kong's professional services sector planned to reduce headcounts this year (12%) and fewer respondents (20%) decided to increase their headcounts (2020: 23%).
Similar to last year's result, respondents continued to place analytical decision-making and interpersonal skills (37%) at the top of the list of the skills crucial to their future. The ability to learn and apply new skills has taken on greater importance with the proportion of respondents citing this a critical skill rising to 25% in 2021 from 16% in 2020.
Core elements in the workplace:
1. Interpersonal skills, communication and collaboration skills (37%)
1. Analytical decision-making, data analysis and data science (37%)
3. Commercial sense and business awareness (26%)
4. Mental elasticity, flexibility and openness to change (25%)
4. Learning and application of new skill set (25%)
6. Cross-functional knowledge (21%)
7. Establishing strategic business partnerships (19%)
8. Technological/ engineering knowledge e.g. AI / robotics / IoT (18%)
9. Ethics and compliance (16%)
10. Knowledge of China market (15%)
WFH or not?
Three factors that suggest that remote working will stay:
- C-level executives see talent risk as a leading threat to future growth. Recruitment and retention will become strategic imperatives.
- The survey indicates strong support at all levels of organisations for continued WFH arrangements. Two-thirds (67%) of respondents expect their organisations to be more accepting of WFH arrangements after the pandemic.
- Flexible and remote work arrangements have the potential to both broaden the accessible talent pool and improve the success rate of recruitment processes by making roles more attractive to candidates (61%) and offering employees better work-life balance (59%).
Despite the popularity of remote working arrangements, some barriers have yet to be addressed, including issues with compliance and productivity. Less than half (45%) of respondents say efficiency and productivity have been maintained under WFH arrangements, with more senior respondents showing more concern.
More respondents are willing to relocate to other Greater Bay Area (GBA) cities for work, with two thirds (65%) of Hong Kong respondents willing to make the shift, up from 61% in 2020 and 52% in 2019
The top reasons to relocate within the GBA are the same as in 2020: Better career and industry prospects (62%), travel convenience (60%) and broader work exposures (57%). For the second year in a row, non-monetary factors were the top three reasons to relocate.
The main area that showed an increase in responses this year was business-led moves. Those citing the need to meet the requirements of business demands as a motivation to move increased from 36% to 42%.
Most respondents continue to predict that the sectors that will create the most job opportunities in the GBA will be innovation and technology (63%), financial services (37%), and professional and consulting services (33%).
The Executive Salary Outlook collected views from 702 business executives to take a measure of the employment market and trends following almost 12 months of meeting the challenges created by the Covid-19 pandemic. A majority of respondents (549) work or live in Hong Kong and the rest (153) elsewhere in mainland China. Among the respondents, 57% held leadership positions (27% C-level and 30% department head or equivalent).