After a positive start to 2011, earnings forecasts for Hong Kong businesses have once again been affected by market volatility.
According to the latest Regus Business Confidence Index, Hong Kong employers polled through September were slightly less optimistic about their revenue prospects than those who were interviewed during the same period a year ago.
Of the respondents surveyed this year, 76.7 per cent said they expected their company revenues to rise in the next 12 months, down 2.1percentage points over 2010. The survey also reported marginal rises in the percentage of respondents expecting their company revenues to remain flat or to decline over the next 12 months.
Despite the decline in forecasts, however, overall confidence among Hong Kong business remains high, relative to the global average as well as that of mainland China, which saw a significant dampening in optimism due to inflation and government concerns over excessively high growth rates.
“Hong Kong has maintained a high level of business confidence, against a backdrop of a global fall. While global uncertainty will have an effect on Hong Kong businesses, I do not foresee a huge change in worker attitudes based on the overall economy,” says Hans Leijten, Regus regional vice-president for Greater China.
In fact, despite slow global economic progress, Hong Kong employment levels are at record highs, with 69 per cent of companies stating that they plan on increasing hiring levels over the next two years.
According to the survey, the most desirable staff sought by Hong Kong companies in 2011and 2012 are freelance (44 per cent) and remote workers (37 per cent), which is largely in line with findings for other markets.
This focus on more flexible employment arrangements, explains Leijten, is also consistent with the growing tendency among Hong Kong companies to refrain from committing to expensive long-term overheads, in terms of office space and equipment.
Leijten says that among the industries that might be most affected by the shift, financial services firms – which “have been considering cost-cutting measures for the past few months” – may witness the biggest changes. “Also, with uncertain demand in Europe and the US, the import-export trade is clearly going to be under pressure,” he adds.
“Overall, we will see more businesses embrace flexible approaches to headcount and how they work. As such, I believe more firms will opt to hire workers on freelance or mobile terms,” Leijten says.