Since its inception in late 1998, Hudson's quarterly report on the hiring expectations of local employers has been a consistently accurate gauge of Hong Kong's economic health.
For example, in mid-2006, the index peaked at 62 per cent, a clear reflection of the good times then. And it hit rock bottom this time last year, when a mere 14 per cent of respondents said they had plans to recruit, as they grappled instead with cutbacks and freezes necessitated by the financial crisis.
So, with the survey results for this year's second quarter showing a near-record 59 per cent, there is every reason to believe companies have shaken off the recession and are moving to hire.
"In my experience, the expectations tend to correlate very closely to actual hiring," says James Carss, Hudson's general manager for Hong Kong. "There are still a number of risk factors but I would say hiring should increase steadily over the next six months and then plateau - with a period of stability at that higher level."
To support this view, he points to several significant developments. First is the sharp increase in day-to-day recruitment activity. The banking and finance sector is leading the way with a reasonable balance between new front- and back-office jobs.
"There has been a massive difference in the last 12 months," Carss says. "It is not yet at the levels of 2005 to 2007, but we can see it is easier for managers to get headcount approval and make decisions."
He notes that for most employers the speed of the "hiring cycle" is accelerating. Last year, companies may have taken three or more months to fill a middle management or senior role. Now, employers are taking an average of only four to six weeks to get new recruits on board. Besides assessing hiring expectations, this quarter's report specifically asked companies about their policy on counter offers. This is another indicator of the strength of the job market. The feedback across all major sectors showed 67 per cent of respondents are ready to make a counter offer, raising salaries to hold on to good staff.
"It is a clear sign of the marketplace; the best people may get two or three other offers if they start looking around," Carss says.
He says that resorting to counter offers is, at best, a short-term measure and not an effective way to manage an organisation. Various studies have shown that about 70 per cent of staff retained in this way leave anyway within six months.
"Matching pay doesn't necessarily address the real issues," Carss says. "That is why smart companies will have a specific retention strategy to encourage more communication with staff and help meet their job and career objectives."
The Hudson Report for the second quarter showed that 41 per cent of respondents felt employee-morale had improved since the end of the downturn. This figure may seem low, but many employees are still experiencing "battle fatigue" or "survivor's syndrome". They have been through a period of increased workloads, longer hours, less pay and no bonuses. Employers need specific strategies to re-energise staff and restore morale.