Economic briefing
In 1997 Hong Kong signed an agreement with China that promised Hong Kong would enjoy a ‘high degree of autonomy’ in all matters except foreign and defence affairs. Subsequently Hong Kong has a free market economy highly dependent on international trade and finance. Economic strengths include a sound banking system, virtually no public debt, a strong legal system, rigorous anti-corruption measures, and close ties with mainland China.
Demographics
Hong Kong is one of the most densely populated areas in the world, with 6,300 people per square kilometre. However, it also has one of the world’s lowest birth rates.
Legal lowdown
“Hong Kong has long pursued a laissez-faire economy. As such, employment law is perhaps less regulated than other jurisdictions,” reports Hong Tran, employment and benefits partner at Mayer Brown JSM. The main employment legislation is the Employment Ordinance (EO). “Criminal sanctions and civil remedies apply for breaching the EO,” says Tran.
Key legislation includes: a minimum wage of HKD32.50, which is reviewed every two years; both employer and employee being required to contribute at least 5% of income (capped at HKD30,000) monthly to a pension; and the Employees’ Compensation Ordinance, which covers the payment of compensation to injured staff.
Long hours culture
Out of 71 global cities listed in UBS’ annual Prices and Earnings study, Hong Kong rated worst in terms of overtime, with staff working for 38% longer than the global average. In response to this long hours culture the government has established a Standard Working Hours Committee.
From the HR frontline
“The culture in Asia is that everyone is trying to better themselves; people work long hours partly because the time zone requires it,” explains group HR director at GKN Monique Carter, formerly regional HR director, Asia Pacific at AkzoNobel.
“There is an increase in willingness from Hong Kongese employees to join a Chinese company with a strong brand and cash rich balance sheet. This is a move away from the past trends to join Western brands and being prepared to work overseas in pursuit of career progression,” she adds.
Important things to know, she says, include that: the vast majority of employees are actively looking for or passively open to job offers; higher salary is the key driver for job changes; work/life balance and flexibility are key to retention in the City; benefits like extended holiday allowance matter; and career progression and training opportunities are among the top drivers for employees seeking new opportunities.
