Hong Kong has moved to address a skills shortage in the city’s financial services industry by announcing new incentives in its budget.
John Tsang Chun-Wah, the city’s financial secretary, delivered his 8th budget on Wednesday at a time when Hong Kong’s financial services industry is undergoing significant change.
In his budget speech, Tsang said he had asked the Financial Services and the Treasury Bureau (FSTB) to consult the industry on manpower training needs.
“There was broad consensus that manpower shortage was particularly acute in the insurance and the asset and wealth management sectors,” Tsang said.
"[The FSTB] also suggested government could help promote the industry, enhance the professional competence of practitioners and train more talent for middle and back office," he added.
As a result, Tsang introduced measures designed to promote the industry to students and the wider community in an effort to increase the number of local professionals.
The Hong Kong government will allocate $100 million for a three-year pilot scheme for insurance and wealth management services.
Under the scheme, the government will collaborate with industry to provide internship opportunities to better explain and market career prospects within the industries, Tsang said.
He added that government and industry would also enhance the contents of continuing professional development programmes for staff and provide financial support to encourage enrollment.
“Tsang is absolutely right to flag the manpower shortage in his budget speech,” Neil Clark, director of Asia-Pacific for eFinancialCareers, told FinanceAsia.
“The size of the local talent pool is struggling to keep up with the continued growth of the financial services industry in Hong Kong, particularly in areas such as risk and compliance,” he said.
Soul searching
The government's move comes amid a bout of Hong Kong soul-searching as its financial services industry – investment banks in particular – reconfigures itself.
Investment banks have been shifting focus and scaling back in certain areas due to regulatory demands following the global financial crisis.
The opening up of mainland China’s markets is also bolstering Shanghai and Shenzhen as alternative financial hubs, heaping further pressure on Hong Kong.
In January, the Financial Services Development Council issued a report outlining the challenges facing the city’s industry.
The report said a lack of industry knowledge and of certain soft skills among many fresh graduates made many firms hesitate to hire and train local graduates.
“In particular, there is a need to improve their language, communication and presentation skills,” the report said.
According to the report, the financial services industry in 2013 accounted for 6.1% of Hong Kong’s employment and about 16% of its GDP.
“As Hong Kong looks to build on its position as a financial services hub in the midst of increasingly complex regulations and rising demand for workers with technical and digital skills, attracting new talent to accommodate the next phase of growth is the biggest human capital challenge,” Randstad, the specialised recruitment company, said in a statement following the budget.
Taking a battering
Hong Kong’s business environment has taken a battering in the past 12 months due to the political tensions surrounding the pro-democracy movement that led to the Occupy Central protests.
Over the 11 weeks of protest, which saw key areas of Hong Kong blocked off, some retailers lost sales and the city’s reputation as a stable place to do business was jeopardised.
In Wednesday’s budget, Tsang said the government would make available $37 million to business owners hit by the protests, in an effort to restore confidence.
He said he would waive licence fees for half a year to help travel agencies, hotels and guesthouses, restaurants, and food stalls. Vehicle exam fees for bus and taxi operators will also be waived once.
A survey by PwC in February said 67% of senior executives ranked Hong Kong’s business environment and its competitiveness as their top concerns.
Close to half (47%) of respondents said the opportunities and challenges brought by the Free Trade Zones (FTZs) in mainland China were crucial.
Measures were announced in the budget to boost other industries but, for the financial services industry at least, the graduate scheme goes some way to addressing the issue of talent shortages.
“The pilot scheme … could help address the manpower shortages in these sectors, enhancing long-term development by tackling the problem at the root,” consultancy KPMG said in a statement following the budget.
