Asian job mart defies feeble recovery

The economic recovery has been very uneven: feeble in the West and in Japan, and so rapid in the emerging Asia-Pacific economic powerhouses that many analysts are now fretting about inflation and overheating economies.

Few areas illustrate the growing divergence as well as the job market. In the United States and Europe, if companies are adding jobs, they are doing so with the utmost caution — and some are still shedding workers. Finnish mobile phone giant Nokia that once seemed invincible, recently said it would cut 1,800 jobs, amid intense competition.

Danish wind turbine manufacturer Vestas announced that it would eliminate 3,000 jobs, mostly in Denmark, but that it would maintain employment levels in China, where it recently opened a research and development centre.

In the United States, where policy makers are working to forestall deflation, Internet communications company Clearwire announced plans this month to reduce its work force by 15 per cent, to about 3,600.

The contrast with much of Asia could hardly be starker. On Friday, Royal Bank of Canada announced the establishment of a new trading floor in Hong Kong, where it now employs 100 people.

The bank has increased its capital markets division in the Asia-Pacific region by more than 26 per cent, to more than 330, since January. Last month, PricewaterhouseCoopers said it planned to double its work force in China to more than 20,000 by 2015.

Announcements of that type have been a near-daily occurrence lately in the Asia-Pacific region — so much so that across much of the region, many employers have a new worry: a labor market that is now so tight that it can be tough to find the right people.

Finding experienced workers “is a challenge,” said Morton’s Restaurant group chief executive Christopher Artinian, which recently opened the first location of its upmarket steakhouses in Shanghai and expects to open several more in Asia in the next few years.
In Taipei, the W Hotel, which is due to open in February, recently held a talent auction in a trendy nightclub — mock cocktails and DJ included — in an unconventional bid to attract applicants for the 490 positions it needed to fill. The hotel’s management has signed up about 200 employees so far and hopes the approach will help reduce turnover. Staff retention is a huge challenge for employers in a region where it is common for employees to change jobs frequently.

And many of the banks that are expanding their operations here speak of intense competition for everything from client relationship managers to compliance staff and systems operators.

“Everyone we’re speaking to is expecting to grow next year,” said Matthew Hill, managing director for Hong Kong at the job agency Ambition, referring to employers in the region. “There’s a lot less concern here about how the economy is looking, and increased pressure for international companies to maximise the opportunities that Asia presents.”

The unemployment rate in the United States is hovering just below 10 per cent, and President Barack Obama has billed his current trip around Asia as a mission to improve business for US companies. In Spain, unemployment is about 20 percent; in Greece, the figure is more than 12 per cent.

Even in Germany, whose economy has proven more energetic than many had expected and is adding jobs, unemployment is about 7 per cent. Compare that with the situation in Asia. Recruitment began to pick up again during the second quarter of 2009, when much of the West was still in the grip of recession. In the financial hubs of Hong Kong and Singapore, the unemployment rate stands at about 4.2 per cent and 2.1 per cent, respectively. In South Korea, which was host to the G-20 summit, 3.6 per cent of people are out of a job. And in Australia, the jobless rate was 5.4 per cent in October.

The unemployment rate in China stands at 3.5 per cent, though economists debate whether the figure is really that low. But employers are nevertheless finding it tough to fill positions, including blue-collar jobs. Employers in many cases had to give workers significant pay increases amid a wave of strikes this year. Hiring intentions in many important Asian cities are now at or near their all-time highs, according to a quarterly survey conducted by employment service Hudson. Nearly two-thirds of companies surveyed in Hong Kong and mainland China, and 58 percent of respondents in Singapore, said they planned to add people this quarter, Hudson reported last month.

By contrast, a survey by the European Commission for October showed that even while economic sentiment for European businesses had improved, consumers were more pessimistic about their job opportunities in the coming months and were saving more.
The hiring in Asia has been especially frenzied in the financial sector. Local and international companies alike have been rushing to grab a slice of the Asian pie, which is growing as wealth levels rise and Asian companies become more active on the capital markets.

Hong Kong alone could see about 5,800 additional financial services jobs this year, and 7,200 more in 2011 — taking the total to nearly 1,96,000 — according to Kinsey Allen International, an executive search firm that specialises in the sector. In 2003, the financial sector employed about 1,46,000 people in Hong Kong.

The luxury and hospitality sectors, too, are hiring as hotel operators and retailers race to expand their presence. All that is helping to push up salaries and bonus expectations, employers and headhunters report.

“There is no doubt that the jobs market in Asia has got hotter as the global financial crisis rolled over,” Australia and New Zealand Banking Group chief executive Mike Smith said, last month. This, he added, “has put pressure on remuneration levels.”

The recruitment firm, Robert Half, which focuses on hiring for financial services companies, found in a survey that one in five finance industry employers in Hong Kong would pay “whatever it cost” to recruit the best finance and accounting talent.

More than 90 percent said they saw a shortage of skills in the current market, and 58 percent said there was a “major and chronic shortage,” Robert Half said last month. The firm’s survey covered 1,600 professionals in Hong Kong, Singapore, Australia and New Zealand. Separately, a survey of nearly 950 real estate professionals, published by the Royal Institution of Chartered Surveyors during the past week, showed that average salaries in the booming Asian real estate sector had shot up 22.4 per cent this year, to nearly $96,000 per year.

In some areas, “job candidates are finding they have three, four, five offers on the table,” said Hill. “Our guys are interviewing 50 to 100 per cent more job candidates than in London — but still there are not enough candidates. Demand is definitely outstripping supply.”

For now, the market is not quite as tough — from an employer’s point of view — as during the heady days of 2007.

That is helping to keep a lid on average salaries, despite the spikes seen in some areas. “Companies are still taking a disciplined approach to hiring plans, and to managing salaries,” said Mike Game, who heads up Hudson in Asia.

Residual nervousness about the global economy means that employers are still setting the bar high in hiring. Most clients “want 9 out of 10 boxes ticked” when it comes to candidates’ qualifications, said Paul Endacott, managing director at Ambition in Singapore.

During the precrisis crunch of 2007, many settled for 7 out of 10, he said. But there is a finite supply of experienced professionals with the desired cultural background, language skills and other qualifications, while demand, it seems, is insatiable.

All that, experts agree, is likely to intensify the crunch in the future and cause salaries to rise — bad news for already worrisome inflation pressures in much of Asia, but good news for consumers and job seekers.

“The talent shortage is not as bad as it was in 2007, but it will get more difficult to recruit, going into 2011,” said Hong Kong-based Robert Half’s managing director Andrew Morris, adding “There’s no better place to be looking for a job than in Asia.”