.Hon. Matthew Cheung Kin-chung GBS, JP Secretary for Labour and Welfare Hong Kong Special Administrative Region Government

Thanks to continuous economic development and prosperity over the years, Hong Kong is today one of the very few places across the globe that enjoys a very low unemployment rate. Despite this, labour shortages and an ageing population are posing other challenges to many businesses that necessarily affect their operations and increase overall labour costs. To address these issues, companies need to attract a new and younger workforce on the one hand while also trying to retain veteran employees.

According to data from the Labour Department (LD), the share of the Territory's workforce with post-secondary education reached 35% in 2013, up notably from 27% in 2003. This also translates into a robust 3.8% per annum growth in terms of the size of this educated workforce in contrast to 1.1% recorded for the total labour force.

Echoing in part the compositional shift towards higher quality jobs with better pay, labour earnings (covering employees at all levels) saw a cumulative increase of 40.1% between 2003 and 2013, exceeding the 30.8% rise in nominal wages (covering workers up to the supervisory level only).

The LD findings also reveal that the unemployment rate for younger persons aged 15-24 fell noticeably to 7.5% between February and April 2014 from 9.1% a year ago while those aged 15-19 hit a six-year low of 8.9%. While the labour force participation rate of young people (aged 15-24) dropped from 44.9% in 2003 to 38.9% in 2013 as a result of enhanced educational opportunities, there are now more avenues available for young people to combine work with education in order to pave the way for achieving their longer-term career objectives. This is borne out by a notable increase in the proportion of young voluntary part-time employed persons. In 2013, about one-fifth (19.7%) of workers aged 15-24 were voluntary part-timers, compared to 7.9% in 2003.

With the local labour market remaining relatively tight in recent years coupled with the effects of the Statutory Minimum Wage implementation, the earnings situation of younger workers has improved noticeably. The LD reports that the median employment earnings of full-time employed persons aged 15-24 rose to $10,500 in Q1 2014 from around $7,000 during the same period in 2004. This is a cumulative increase of 50% compared to the 36.4% in overall median earnings of full-time employed persons.

Leveraging the talents of a younger workforce
"A manpower shortage is not only an issue of ‘quantity' but also about ‘quality'," says Matthew Cheung Kin-chung, Secretary for Labour and Welfare. "Training is all the more essential for the next generation to possess education and skill levels that fit both their personal aspirations and our Territory's future development needs."

"Young people generally are more creative, energetic, outspoken, fast-learning and enjoy having fun," says Cheung. "These attributes, if suitably unleashed, are conducive to their career advancement."

In such a fast-paced society like Hong Kong, Cheung points out that young people with good time-management skills certainly have an edge over their counterparts. "While most young people are adept at handling a variety of communication technologies, the importance of carrying out effective face-to-face communication and establishing interpersonal relationship are sometimes overlooked." He stresses that these capabilities are highly essential in order to move up the career ladder.

"Furthermore, the ability to manage one's emotions and deal with adversity are also indispensable nowadays for coping with keen competition and the various challenges in the workplace," he explains.

Having understood the strengths and weaknesses of the younger generation, Cheung suggests that employers should develop strategies and tactics to best leverage their talents for future business development. "It is advisable for employers to be more attentive to the individual needs of their young employees and communicate with them more frequently to enhance mutual understanding."

Moreover, he points out that it is desirable to provide young employees with more coaching and on-the-job training to help them improve their work skills. Constant feedback and positive reinforcement are important today in helping younger workers develop their potential and rise to challenges. "Most importantly, we should let youngsters see their clear, long-term prospects of career development for the future," he says.

The Youth Employment and Training Programme (YETP) is one of the LD's key initiatives that provides a platform not only for job search but also for one-stop, diversified pre-employment and on-the-job training for young school leavers aged 15 to 24 whose educational attainments are at the sub-degree level or below. This includes courses on motivation plus on-the-job training for six to 12 months to help them gain valuable work experience, sharpen work skills and improve interpersonal communication abilities.

The LD has also been actively exploring cooperative arrangements with various employers and organisations to launch more targeted pilot projects under the YETP that are open to fresh school leavers and those (aged 15 to 24) who may have graduated several years ago.

Under these pilot projects, employers are provided with financial incentives and encouraged to offer training opportunities to young people. They can also opt to recruit suitable staff to meet their manpower needs. The "Service Industries Traineeship Scheme - Retail", one of the pilot YETP projects, is tailor-made for the retail services industry with its dual training and work modes of operation.

Extending the retirement age
One way to mitigate the negative consequences of an ageing population and shrinking labour force is to extend employees' working lives. In a consultation paper released by the Civil Service Bureau in early April 2014, a framework for extending the years of service for civil servants, which embraces a range of retirement and employment initiatives, has been proposed. The objective is to keep pace with the demographic changes of society while flexibly addressing the various operational and succession needs of individual grades and departments of the Government.

"As the largest employer in Hong Kong, we in the Government believe that the proposal would help set an example for other employers to follow," says Cheung.

He points out that extending the retirement age would also help ease the pressure of a shrinking workforce and facilitate greater inter-generational skills transfer. "However, there is the possible downside of slowing down the promotion prospects of the younger generation in those industries not facing acute manpower shortages as mature workers stay longer in the labour force. We need to strike a reasonable balance," he adds.

Emphasising good people management
To attract potential manpower to join and remain in the labour force, Cheung says that the key is to integrate a proper "people-oriented" good people management system into each and every human resources management process. "This ranges from adopting a talent-wise recruitment policy to build an inclusive workplace and engaging employees with fair and reasonable employment terms to keeping the employment conditions of staff under review and seeking improvements where appropriate."

"Creating a family-friendly corporate culture as well can definitely help unleash the untapped power and efficiency of a workforce and foster a desire to remain with the company," adds Cheung. "A supportive working environment also enables mature employees to balance business responsibilities with the desire for a less hectic working life."

In the face of keen competition for talent arising from a persistently tight labour market and an ageing population, Cheung concludes that human resources professionals who recognise the importance of good people management and offer wholehearted support in this respect will be the winners in the employment market.