The world economy looks like it might be in for a rough ride, but through shrewd management, the pain on all sides may be lessened, according to a recent regional survey.
Much of the concern, particularly for those in human resources (HR), pertains to hiring strategies for the new year. While many may decide to scale back expansion, Sydney-headquartered consultants Talent2 suggests that Hong Kong companies could well continue to hire, albeit on a more flexible or "contingent" basis. This approach is already in wide use in the United States and Europe, it adds.
The company's latest APAC Market Pulse Study included a survey of over 700 senior business executives in Hong Kong, Singapore, Australia, New Zealand, Japan, and China. The findings show, encouragingly, that over half - 55 per cent - feel better prepared for looming volatility and how best to cope with it from an HR perspective.
"We are seeing lay-offs in the region, but HR departments are behaving in a more strategic manner," says Gina McLellan, Talent2's managing director for Asia. "Companies are reducing headcounts in some departments, but hiring in others. It's not like 2008, when the sky simply fell in. Lessons have been learned from the GFC [global financial crisis]."
In terms of how businesses are responding in each region, again the situation varies. In Hong Kong, 39 per cent are maintaining recruitment and training, while 45 per cent are looking to cut costs. In China, the majority - 61 per cent - are more upbeat and are maintaining recruitment and training, while in Japan, just over half are looking to cut their costs.
A salient point that has emerged from the survey is that business managers can see more clearly the benefits of creating greater flexibility in the workforce. While the use of contract staff is considered the best way to reduce risk in these unpredictable times, other options being eyed include having staff working more flexible hours - according to 27 per cent of the respondents - and reducing the hours and pay of full-time staff (chosen by 17 per cent of those surveyed).
In all, 39 per cent of Hong Kong business managers said that employing staff on a contract basis is the best way to tackle the current level of uncertainty. The majority of these (76 per cent) cited the ability to quickly scale operations up or down as the main benefit of the approach.
Despite this, 89 per cent of the city's workforce continue to be comprised of permanent full-time employees,
a figure that is expected to decrease in coming years, as businesses become more pragmatic in their hiring.
"Many businesses consider contract employees as the best way to meet fluctuations in demand during volatile times," says McLellan.