Contact: Tricia Stevenson
Hudson
(852) 2919 6153
tricia.stevenson@hudson.com
For Immediate Release
Employment expectations continue to remain optimistic across Asia, with China
and Hong Kong employment expectations at a four-year high
Comprehensive Hudson Report Released for Quarter Four 2005
HONG KONG – 12 October 2005 – Expectations for permanent employment for the fourth quarter
remain high in all four markets. Expectations in China and Hong Kong are at their highest levels since
1998 and 2001 respectively. This optimism is also reflected in the predictions for increased salaries
over the next 12 months, with the highest salary forecasts for China. The current candidate-short
market has resulted in high levels of staff turnover and poaching is seen as an important contributory
factor.
Hudson, one of the world’s leading professional staffing, outsourcing and human capital solution
providers and a division of Hudson Highland Group, Inc. (NASDAQ: HHGP), today released findings of
its comprehensive quarterly Hudson Report for Asia. With a reputation as a key socio-economic
indicator in the current marketplace since its Asia launch in 1995, the survey has been built on the
premise that employers’ expectations of an increase or decrease in staffing levels represent a
significant indication of their optimism in the growth of their organisation and their industry as a whole.
The Hudson Report represents the expectations of over 2,300 key employment decision makers from
multinational organisations of all sizes in all major industry sectors. The four locations surveyed were
China, Hong Kong, Singapore and Japan.
The latest employment trends
Employment prospects are still buoyant in China, where 68% of companies across all sectors plan to
increase hiring in Q4, up from 63% the previous quarter. This is again higher than in any other market
surveyed in Asia. Construction companies have the highest expectations, with 85% planning to
increase hiring. Expectations are also growing fast in Manufacturing, where 73% of executives
forecast increased hiring, up from 57% in Q3.
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Expectations also continue to rise in Hong Kong, where 52% of respondents are planning to hire more
staff in Q4, the highest level since Q1 2001. As in Q3, the Legal sector is the most optimistic, with
62% forecasting increased headcount. This is partly driven by M&A and IPO activity in China. The
Consumer sector reports the biggest rise in expectations (58%), as a result of rapid retail growth. The
financial recovery continues, with 56% of banking respondents planning to hire more staff.
In Japan, permanent employment expectations remain high, despite a slight dip due to seasonal
factors. Fifty-eight percent of employers plan to increase headcount this quarter, compared with 62%
in Q3. Seventy-eight percent of Healthcare companies predict increased recruitment. Expectations are
growing fast in Legal and IT&T, with 75% and 63% of respondents forecasting headcount growth.
In Singapore, 47% of executives across all sectors forecast a rise in the level of permanent
employment. Although this is a slight decline from the previous two quarters, the employment
expectations are still high. The continuing growth in consumer demand means that the Consumer
sector is the most buoyant, with 53% of executives forecasting headcount growth.
“The employment outlook continues to be positive across the region. Forecasts for headcount growth
are at their highest levels in over four years in China and Hong Kong,” said Gary Lazzarotto, Chief
Executive Officer, Asia, Hudson. “Companies in China are the most optimistic about employment
prospects with almost 70% planning to increase hiring.”
Source: The Hudson Report – Asia, Q4 2005
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Salaries on an upward trend
There is a clear upward movement in anticipated salary trends over the next year. Across all markets,
71% of respondents forecast that salaries will rise in their companies, while only 1% predict a
reduction. Forty-two percent think that salary increases will be less than 5%.
The highest anticipated rise in salaries is in China, where 54% of respondents predict increases of 5%
or more. This is a reflection of the active employment market where companies are having to offer
higher salaries in order to attract and retain staff.
The number of companies in Hong Kong anticipating salary increases is growing. Eighty-three percent
of respondents expect a salary increase over next 12 months, compared with 62% a year ago.
Anticipated salary trends are lower in Japan than in any other market surveyed. Fifty-three percent of
respondents forecast no change and 11% expect rises of 5% or more.
Despite the high levels of staff turnover in Singapore, 27% of respondents say that salaries will remain
the same, while 44% predict rises of 5% or less.
Source: The Hudson Report – Asia, Q4 2005
The hottest jobs in Asia
As in previous quarters, the highest level of demand in all four markets is for sales professionals.
Demand has increased since Q3, with this category accounting for more than 28% of projected hiring.
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Demand for Engineering/Operations/Technical specialists is also high across all the markets. The
continuing recovery in the Manufacturing sector is driving demand for technical skill sets.
Many companies experiencing staff turnover
In a candidate-short market, staff turnover is an issue across the region. In China 88% of companies
across all sectors report that they have experienced staff turnover in the past year. The Manufacturing
and Consumer sectors have the highest levels – 94% and 93% respectively. Media/PR/Advertising
also reports a higher than average levels, at 90%.
Eighty-seven percent of companies in Hong Kong say that there has been staff turnover in their
companies in the past year. Legal firms report the highest level by a substantial margin. The Banking
and Consumer sectors also report higher than average levels.
Compared with the other markets, Japan has a relatively low level of turnover with 74% of companies
reporting that they have lost staff during the past year. This is due partly to Japan’s strong tradition of
job security and partly to the strengthening economy.
Singapore has the highest level of turnover among the markets surveyed, with 93% of executives
confirming this trend in their companies. In the Banking sector, 97% report staff turnover.
Source: The Hudson Report – Asia, Q4 2005
High staff turnover rates across all countries
In China over two-thirds of respondents have experienced staff turnover rates of 5% or more in the last
12 months. These are the highest figures surveyed across Asia.
Hong Kong has also experienced high levels of staff turnover, with 63% of respondents reporting
turnover rates of 5% or more, which is a reflection of the healthy employment market.
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Japan has seen the lowest levels of staff turnover, with 53% of respondents reporting turnover rates of
1 – 5%.
In Singapore, even though the staff turnover rate reported by companies has been relatively high,
almost half of the turnover (46%) falls within the 1 – 5% range.
High levels of staff poaching
Staff poaching is stated as the main contributory factor affecting turnover given by respondents in
Hong Kong, Japan and Singapore. However, concern about limited career progression is the most
important reason in China.
Surprisingly, across the region dissatisfaction with salaries and bonuses is not rated amongst the main
reasons for staff turnover.
Source: The Hudson Report – Asia, Q4 2005
Source: The Hudson Report – Asia, Q4 2005
Finding and retaining staff is the main HR challenge
In the current buoyant market, hiring and retention are seen as the greatest HR challenges in the
coming year. Across all the markets surveyed, 33% of respondents say hiring is the most critical HR
challenge, while 31% select retention.
Hiring staff is particularly difficult in China: 37% of companies across all sectors see this as the main
HR issue.
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Hong Kong and Japan have the highest percentage of companies stating that retention is the biggest
HR challenge – 37%. In Singapore, 32% of respondents from all sectors say that retaining staff is
HR’s most pressing challenge.
Source: The Hudson Report – Asia, Q4 2005
Source: The Hudson Report – Asia, Q4 2005
Hudson
Hudson delivers specialised professional staffing, outsourcing, and human capital solutions worldwide.
From single placements to total solutions, the firm helps clients achieve greater organisational
performance by attracting, selecting, developing and engaging the best and brightest people for their
businesses.
Hudson is a division of Hudson Highland Group, Inc. one of the world’s leading professional staffing,
retained executive search and human capital solution providers. The company employs more than
3,800 professionals serving clients and candidates in more than 20 countries through its Hudson and
Highland Partners businesses. More information is available at www.hudson.com.
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Securities and Exchange Commission, which discussions are incorporated in this release by reference.
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