Publications

General

Hong Kong has one of the most unregulated economies in the world. It is expected to grow 4.5 to 5.5% in 2007. The territorys unemployment rate, however, had fallen from 5.6% in 2006 to 4.3% by mid-2007. The four pillars of Hong Kongs economy are trade and logistics, tourism, financial services and professional services.

Even though Hong Kong is now a Special Administrative Region of China, it has maintained its well-established labor laws based on the British system. Also in place are mandatory provident fund schemes. Even though the territory has over 700 registered trade unions, there have been few major labor disputes or strikes.

Hong Kong has a highly conducive business environment. It enjoys low tax rates, has a strong legal system, and is tough on corruption.

Wages and Compensation

Wage levels in Hong Kong are customarily fixed by individual agreements between employers and employees. There is no statutory minimum wage except for foreign domestic workers.

Salaries for local professionals are similar to or greater than those in the United States. This is mainly due to the high cost of living, especially in terms of housing. Almost half of Hong Kongs population lives in rental housing, and there is a high demand for quality apartments and houses.

Companies in Hong Kong generally give out Chinese New Year or 13th month bonuses. The amount is generally equivalent to one months salary or more, and is usually paid in January or February. If a bonus is mentioned in a contract, it must be paid unless specifically noted as discretionary. If an amount is not specified, at least one months salary is standard.

Other Benefits

Hong Kongs Mandatory Provident Fund Schemes Ordinance came into effect in December 2000. It covers all employees between 18 and 65, including part-time workers and foreign employees. Under the scheme, employers and employees each contribute 5% of the employees monthly salary. The fund is transferable and can be carried to an employees new job in the event of a job switch.

There are two main types of medical benefits government subsidized benefits and private health care plans. Under government-subsidized benefits, services are available at relatively low costs. Right now, no contributions are required from employers, but this situation might soon change, given the territorys rising health care costs.

Under private health care plans, employers usually cover the full costs of coverage, although cost-sharing plans are also becoming more common. Generally, employees must help pay the cost of dependent coverage. Some larger companies in Hong Kong also make it a point to arrange contracts with local clinics or medical chains to provide medical care for their employees.

Disability and life insurance benefits are not mandatory. However, many companies include these benefits as part of their medical insurance policies. As for maternity leave, less than half of the companies in Hong Kong pay full salary during this period. Even if full salary is not paid, maternity leave must be granted for a minimum of ten weeks.

While expatriate packages were common in the past, they have become less so in recent years. There is currently no great disparity in the salaries of expatriates and locals in senior positions.

But for expatriate positions, housing, education and home leave can still add up to a high compensation package. Indeed, the pollution in Hong Kong has become so severe that more than half of Hong Kong-based companies have been forced to increase their offers to expatriates put off by rising pollution. Firms either had to offer a higher salary package or disburse higher housing allowances.

Foreign Employees in Hong Kong

As a cosmopolitan city with close to 8 million people, Hong Kong has over 500,000 foreigners. Many are domestic staff and manual laborers from the Philippines, Thailand, Sri Lanka and India. Others are top executives at global firms.

Work permits are usually granted without much delay for professional staff and skilled executives. In 1999, the Hong Kong government implemented the Admission of Talents Scheme. While primarily aimed at Mainland Chinese talent, it is also open to those from other countries. Successful candidates will normally be granted employment entry permits/visas with an initial stay of 12 months upon entry. The candidates may then apply for extensions of stay before their limit of stay expires.

A few years ago, the government introduced a second scheme to let in highly skilled Mainland Chinese talent. Known as the Admission of Mainland Professionals Scheme, it aims to increase the competitiveness of local companies and facilitate the further development of Hong Kong. Successful candidates will normally be granted an initial stay of 12 months upon entry. Extension of stay will be approved if the candidates continue to meet the eligibility criteria. Application for change of employment will generally not be considered in the first year of admission. But this restriction will be lifted one year after admission, provided the candidates continue to fulfill the eligibility criteria, and are employed in jobs relevant to their qualifications and expertise.

Recruiting Trends

Labor Flow From Hong Kong to China - Given Chinas rapid development, many Hong Kong residents have either looked to or already relocated to the mainland for what they see as better and more lucrative job opportunities. One of the greatest attractions of working on the mainland is the higher salary. While average salaries for those working in Hong Kong rose by only 3% in 2006, those who worked in China witnessed a 25% increase. As compared to local Chinese, Hong Kong expatriates are well paid, and the cost of living on the mainland is also significantly lower as compared to Hong Kong. As a result, some Hong Kong residents have even relocated their entire families to the mainland.

Quality Migrant Admission Scheme This Scheme was initiated in July 2006 in order to attract foreign talent to Hong Kong. Even though it is open to all nationalities, the Scheme specifically targets mainland Chinese with exceptional skills or academic qualifications. Especially welcomed are those trained in finance and accounting.

Recruiting Strategies

Newspapers This traditional method is highly effective when it comes to recruiting lower and middle level positions. Many job seekers still turn to newspapers when searching for jobs, particularly the Oriental Daily, Apple Daily, Ming Pao, South China Morning Post and The Standard. The first three are Chinese-language dailies, while the remaining two English dailies.

Websites Hong Kong residents are generally internet-savvy and many turn to the Internet for job listings. Generally, professional level jobs will be taken more seriously if they are posted in English on English-language job boards. While such a method is more immediate as compared to newspaper advertisements, the drawback is that it often attracts resumes from less-qualified candidates. Popular English-language job boards include www.classifiedpost.com, www.monster.com.hk, www.hkjobs.com, and www.jobdb.com.

Personal connections As in China, personal connections are important in Hong Kong, especially networks of personal relationships in the business world. These inside connections can be useful in hiring, and can strengthen the bond between employers and employees.

Recruiting Trends

University Recruiting Universities in Hong Kong generally have very helpful and cooperative career centers that help match employers and employees. Top universities in the territory include University of Hong Kong, Chinese University of Hong Kong, and Hong Kong University of Science and Technology.

MBA Recruiting In recent years, MBA programs with an Asian-focus have become increasingly popular among Hong Kong professionals. An example is the China Europe International Business School (located in Shanghai) which runs classes in English conducted by both Chinese and foreign professors. Many professionals see these programs as a means to acquire more managerial knowledge, as well as to get ahead in their careers.

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