Common Hiring Challenges in Hong Kong and How to Overcome Them

Hong Kong’s position as Asia’s financial hub faces a serious challenge in 2025: a deepening talent crisis. Nearly all C-level and HR leaders (97%) report difficulties hiring the right people, shifting recruitment from an operational task to a strategic threat to business growth.

The problem goes beyond supply and demand. In professional services, 75% of leaders call hiring “unmanageable,” with the public sector (70%) and financial services (59%) facing similar strains.

The Labour and Welfare Bureau projects a shortfall of 180,000 professionals by 2028, underscoring the urgency. Economic headwinds have led to hiring freezes, while employee expectations continue to climb, widening the gap between employers and candidates.

This article explores hiring challenges in Hong Kong, in addition to strategies to attract and retain top talent, leverage government schemes, restructure compensation, and deploy technology that enhances recruitment without losing the human touch.

The Scale of Hong Kong’s Hiring Crisis

Pervasive Talent Shortages Across Sectors in Hong Kong 

As mentioned earlier, the overwhelming majority of professional service leaders have reported “unmanageable” hiring challenges, with public sector and financial services experiencing similar crisis levels. The term “unmanageable” should sound alarm bells, as it clearly shows a breakdown where critical roles remain unfilled, potentially impacting service delivery and strategic objectives across Hong Kong’s most important economic sectors.

Market research corroborates that this pattern extends across the broader Asian region. Hiring managers report moderate to extreme skill shortages affecting 62 per cent of organisations across Asia, with Hong Kong representing a significant portion of this struggle. The widespread scarcity creates upward pressure on salaries and makes talent retention even more difficult as employees become targets for competitors. Government talent attraction schemes act as an implicit acknowledgement that the local supply cannot meet the current demand.

The demographics also compound these pressures. Hong Kong’s labour force participation rate is expected to shrink from 55.2 per cent in 2023 to 51.6 per cent by 2046, reflecting an ageing workforce where experienced professionals retire faster than younger talent can enter the market.

Competition Intensity and Market Dynamics of Hong Kong

The contest for available talent has become intense, with 39 per cent of Hong Kong hiring managers identifying competition from other employers as the primary cause of skill shortages. This competitive pressure shows itself in multiple ways: candidates receive multiple job offers, counteroffers from current employers become standard practice, and salary expectations escalate beyond the usual market rates.

In essence, recruitment has transformed from an employer’s market to one where candidates hold significant leverage in negotiations.

Read more: Hong Kong Business Trends in 2025: What to Expect

Challenge 1: The Compensation Conundrum

Salary Expectation Mismatches

According to the most recent data, there appears to be a significant disconnect between what Hong Kong professionals expect and what employers offer. Morgan McKinley’s 2025 Salary Guide reveals that 63 per cent of employers lost potential hires within six months, specifically because their salary and benefits packages were seen as uncompetitive. This problem intensified as the guide found that 58 per cent of organisations kept their salary ranges static during the second half of 2024.

Overall, the timing could not be worse. Talent shortages embolden candidates to demand higher compensation, just as economic pressures push employers toward fiscal restraint. We would go so far as to say that matching salary expectations will be the biggest challenge of 2025 for Hong Kong recruiters. 

Benefits Dissatisfaction Crisis

Of course, salary represents only part of the compensation puzzle. 67 per cent of Hong Kong professionals express feelings of neutrality, dissatisfaction, or high dissatisfaction with their current benefit packages, and nearly half of all Hong Kong employees will be actively seeking new job opportunities in the next six months of 2025. This widespread discontent suggests many employers have failed to grow their offerings to match changing workforce priorities.

The problem seems to stem partly from employer complacency. Research indicates that the average number of benefits provided by companies has levelled off, representing a missed opportunity for differentiation in an incredibly competitive market. Post-COVID, modern professionals across different generations increasingly value diverse benefits ranging from flexible working arrangements to comprehensive wellbeing programmes.

For example, research highlights that Gen Z employees prioritise paid time-off and performance incentives, whilst Baby Boomers place higher value on cost-of-living adjustments. We believe this generational divide requires nuanced total rewards strategies that move away from one-size-fits-all approaches. Companies that continue offering standardised benefit packages will struggle to attract talent from across the demographic spectrum.

Read more: Understanding the Statutory Minimum Wage in Hong Kong

Challenge 2: Critical Skills Gaps and AI Transformation

High-Demand Specialised Roles

Hong Kong is facing acute shortages in specialised technical positions that drive modern business operations. The demand spans many sectors, with technical workers, finance professionals, various engineering disciplines, including Network, Systems, AI, and Robotics Engineers, plus IT specialists such as Project Managers, Cybersecurity experts, Data Scientists, and Blockchain Developers topping employer wish lists.

Naturally, new industries create fresh talent requirements. The growing emphasis on environmental responsibility has sparked demand for professionals with expertise in green bond issuance and ESG fund management. Additionally, nearly 90 per cent of C-suite executives in Hong Kong have either already implemented AI solutions or plan to do so within the next three years, creating urgent needs for AI-literate professionals across multiple functions.

The challenge also extends to traditional sectors experiencing talent drain. Accounting faces a decline in locally available skilled professionals, attributed to the offshoring of certain functions and professionals seeking opportunities in other sectors. The retail sector grapples with shortages of individuals who can leverage AI technologies to enhance customer experience while keeping the human elements of traditional service delivery.

Skills Evolution and Adaptation Needs

We’ve observed that the rapid pace of change makes adaptability more valuable than specific technical knowledge. The ‘ability to learn and upskill’ has emerged as the top soft skill demanded by employers in Hong Kong, cited by 38 per cent of organisations. This priority most likely reflects the fact that technical capabilities possessed today may quickly become outdated in fast-evolving fields.

AI literacy has become a critical requirement, with Seek finding that 54 per cent of employers now consider it an essential skill during the hiring process. However, a gap exists between the need, and actual current practices – from that same Seek study, only 15 per cent of companies reportedly use AI tools to streamline their own recruitment processes.

The skills shortage creates a dual challenge: finding people with current expertise whilst ensuring they can adapt to future requirements. We believe companies will need to balance immediate needs against long-term capability development, making learning agility a more durable asset than any single technical skill.

Read more: Guide to Payroll in Hong Kong

Challenge 3: Economic Headwinds and Market Caution

The broader economic climate in Hong Kong puts significant pressure on hiring intentions and compensation strategies. The Hong Kong government’s decision to implement a pay freeze for civil servants and reduce the public sector by 10,000 roles, aimed at managing a budget deficit of HK$87.2 million, has created ripple effects throughout the private sector.

This governmental stance has stimulated increased caution among private enterprises. Nearly one in four private organisations (24.4 per cent) now contemplate complete salary freezes for their employees in 2025, while an additional 18.3 per cent consider smaller wage increases than originally planned. More tellingly, 42.7 per cent of surveyed organisations acknowledge that the government’s stance on public sector pay directly affected their thinking regarding salary adjustments.

Headcount plans reflect this conservative mood. A significant 58 per cent of organisations intend to freeze their headcount in the current year, though 23 per cent still anticipate making new hires. The cautious outlook extends regionally, with only 38 per cent of organisations in Hong Kong planning headcount increases in 2025, which is the lowest figure recorded across Asia.

Recent labour statistics show the seasonally adjusted unemployment rate edged up to 3.2 per cent for December 2024 to February 2025, with sectors such as food and beverage services, transportation, and construction experiencing increases during this period.

Strategic Solutions for Overcoming Hiring Challenges in Hong Kong

Compensation Strategy Overhaul

Our research leads us to the conclusion that companies must move past traditional salary-only thinking to create compelling, holistic reward packages. The widespread dissatisfaction with current benefits shows that there is a significant opportunity for differentiation through creative compensation structures. To be successful, employers should now offer flexible benefits that allow employees to tailor packages to their life stages and personal circumstances, addressing the generational divide between Gen Z preferences for performance incentives and Baby Boomers’ focus on cost-of-living adjustments.

Smart companies will conduct regular competitive benchmarking against market realities rather than relying on outdated salary surveys. They recognise that losing 63 per cent of potential hires to compensation issues costs far more than proactive market-rate adjustments.

Government Talent Schemes

Hong Kong offers multiple pathways for accessing international talent through structured government programmes. The Quality Migrant Admission Scheme received 63,471 applications, resulting in 11,848 approvals in 2024, while the Top Talent Pass Scheme processed 51,223 applications, with 41,057 approvals.

The government expanded its “Talent List” effective March 1, 2025, to encompass 60 high-demand professions. Foreign professionals whose occupations fall under this list benefit from facilitated immigration processing, with employers no longer required to provide evidence of recruitment difficulties when hiring through schemes like the General Employment Policy and Admission Scheme for Mainland Talents and Professionals.

Read more: Guide to Hong Kong Immigration and Work Visas

Technology Adoption for Recruitment Efficiency

AI-powered recruitment tools offer legitimate potential for screening efficiency and bias reduction, yet only 22.5 per cent of Hong Kong employers report minimal AI integration in their hiring processes. This cautious adoption presents competitive advantages for early movers who can process applications faster while maintaining quality assessments.

Successful implementation will mean balancing automation with human insight, using AI for high-volume screening while preserving personal interaction for cultural fit evaluation and final selection decisions.

Internal Talent Pipeline Development

Given the current external recruitment challenges, companies will also need to increasingly focus on developing existing employees through upskilling and reskilling programmes. This approach addresses the stark reality that the ability to learn and adapt has become more valuable than static technical skills in rapidly changing industries.

Read more: The Essential Guide to Hiring Employees in Hong Kong

Where to Next with InCorp

When looking at our research holistically, it’s clear that Hong Kong’s talent challenges now demand more than traditional recruitment approaches. The mix of widespread skill shortages, compensation mismatches, and evolving employee expectations requires quick, strategic adaptation. Companies that restructure compensation packages, access government talent schemes, and develop internal capabilities will secure competitive advantages in this constrained market.

Of course, this is much to ask of any organisation to implement internally. At InCorp, we’ve already guided numerous Hong Kong businesses through these talent challenges, helping them access government visa programmes and implement effective retention strategies. Ready to transform your Hong Kong talent strategy? Contact InCorp today to discuss how our expertise can help you attract and retain the talent your business needs.