Hong Kong or Singapore? What the Talent market has to say

Hong Kong or Singapore

by George Silver

Asia is an increasingly important focus for companies wishing to diversify geographically and enter into new markets. Hong Kong and Singapore have long been the locations of choice for western companies’ Asian HQ, and the two city-states have been competing for decades to be Asia’s ‘Best Place To Do Business’.

There are many reasons to choose either location depending on the nature of your product and who your customers are. For example, Singapore is considered the de-facto financial and services hub for ASEAN whereas Hong Kong is considered a gateway into China.

The cost and ease of doing business are important factors when it comes to locating operations. Both rank highly in these aspects with Singapore 1st and Hong Kong 5th for ‘world’s easiest place to do business’. (World Bank Report, Doing Business 2015) Hong Kong (2nd) ranks higher than Singapore (3rd) in terms of ‘most competitive economy’ (2015 IMD, World Competitiveness Yearbook) and is top ranked for ‘world’s freest economy’ (Singapore 2nd ) (Heritage Foundation’s Index of Economic Freedom).

But what does the talent market have to say?

There are different factors that may influence how attractive either city is for professional expatriates. Salary is certainly one of them; with Singapore boasting the highest base salary levels at senior management levels in APAC, with pay levels 10% higher than Hong Kong, which has the second highest.

Whilst salaries in Singapore are certainly higher, Hong Kong is catching up. The city is expected to overtake Singapore in terms of highest executive pay due to the strengthening of the Hong Kong Dollar vs the Singapore Dollar. Salaries in Hong Kong stay comfortably above those in Mainland China with base salaries three times higher than in the mainland, with pay for senior management in Shanghai around 10% lower than in Hong Kong, reflecting the increasing competition as well as the underlying talent shortages in Shanghai.

Immigration policy has also impacted the talent market in different ways for both locations. In recent years the majority of immigrants settling in Hong Kong were one-way permit holders coming from the mainland, with 40,500 such immigrants settling in the city in 2014 alone. However, the education level of these new workers was relatively low, with the percentage of those with a degree reaching 16% in 2011 compared to the local population at 27.7%. On the other hand, Singapore’s immigration policy favours smaller numbers of immigrants but who generally have a high level of education, with the proportion of people with degrees at 81.8%, meaning Singapore has a more established local and resident talent pool.

However, the outlook is looking more and more positive for attracting foreign talent in Hong Kong, with measures implemented in 2015 by the Hong Kong Immigration Department making the procedure easier for employers to hire foreign professionals. Hong Kong also has a much more developed start-up ecosystem, with much in the way of skilled technology talent with proven experience in start-up businesses, often overlooked by large organisations.

Other than salary, quality of life in each city certainly affects the type of talent attracted. Hong Kong is generally perceived as a more dynamic and vibrant city, attractive to young professionals. Singapore on the other hand, with its better air quality and education system, is perceived to be more attractive to those with a family. Singapore is considered to be an easier place to adapt to when relocating elsewhere as the city is considered modern and westernised with English as the language of communication. In Hong Kong however despite the use of English being prevalent in business, Mandarin and Cantonese remain the most spoken everyday languages overall.

Indeed perception seems to be a key factor and with those I have spoken to in the market there appears to be an overall preference for Singapore. The impression many people had was that Singapore is more world facing, multicultural, business friendly and more politically and economically stable. On the other hand, Hong Kong was seen as an unfavourable location due to poor air quality as well as fears over the political encroachment of Beijing into the city.

I find these results interesting, particularly as they contradict with my own impression that Hong Kong is a more exciting, dynamic and cultural city and a more appealing location to relocate to. That said my preference may change according to my future life choices.

Whichever city companies choose to base their operations, there will undoubtedly be a talent pool from which to build a team from. However, careful planning should go into relocation in order to make you gain access to the best talent and reduce business risk. At Write Research we have helped clients to understand the challenges of relocation as well as the experiences of those who have undertaken the task themselves. We’ve worked across APAC, EMEA and the Americas and are always seeking new challenges to solve for our clients. If this is a challenge you are currently facing please do not hesitate to get in contact with me.

In the meantime, I would like to invite your thoughts on this issue: If you were to relocate where would you go to and why?

ABOUT THE AUTHOR: George solves business challenges with the best talent and insight. He is an expert on talent for the healthcare & life science sector and reducing leadership risk, with 5 years of experience in APAC. PULSE comments and articles are his own views. George Silver is a Global Industry Executive for Healthcare & Life Science at the talent & insight consultancy, WRC www.writeresearchcompany.com

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