The Evolving Hong Kong Board & Advisory Ecosystem
Mat Gollop • October 18, 2024
Hong Kong's Board & Advisory space is changing, with regulatory developments impacting the likely structure and strategy of future board composition.
At ConnectedGroup we see that the future supply of talent will need to come from a more diverse range of backgrounds and experience to meet the needs of an evolving regulatory framework and rapidly changing economic landscape.
To clarify, there are 3 main types of formal board role categories in listed companies:
- Executive Directors – employees of the organisation in the senior leadership team, some of whom may sit in the board, usually the CEO or equivalent on the main board.
- Non-Executive Directors – board members who are not employees but who represent significant shareholding interests.
- Independent Non-Executive Directors – board members who are not employees and who have no other connection to the business.
It is the 3rd role of INED on which the regulatory changes focus. A very useful ‘Snapshot of INED’s Roles and Responsibilities’ produced by HKEX can be found here.
There are 2 key regulatory pressures:
1. Trimming the Seats: HKEX’s Push to Reduce Over-boarding
Recently, the Hong Kong Exchanges and Clearing (HKEX) has announced a proposal to limit the number of board roles an individual can hold across listed companies. While this number was not restricted in the past, the proposal is that an individual can only hold maximum of six board roles. This is an effort to ensure that the directors can devote sufficient time to each company. These changes will be implemented from 1st January 2025 with a proposed three-year transition period for the changes relating to INEDs. As reported by the South China Morning Post, the "over-boarding" proposal has sparked significant debate among company directors because the proposal would force them relinquish some of their roles.
At the end of 2023, 23 over-boarded INEDs served on the boards of 181 companies listed on the HKEX (approximately 7% of all HKEX-listed companies), and five INEDs held 10 or more listed company directorships. HKEX firmly believes that it will lead to positive outcomes as INEDs will demonstrate better performance for their board roles. At the end of the day, “Independent non-executive directors and other non-executive directors should make a positive contribution to the development of the issuer’s strategy and policies through independent, constructive and informed comments.” (HKEX, Rules en Guidance C.1.7).
2. Board Composition and Gender Diversity
Gender diversity remains a persistent challenge in Hong Kong’s board composition. Nearly 57% of students enrolled in business and management courses are female and women hold over half of entry-level positions. However, their representation decreases as they progress up the corporate ladder. In the financial sector, women occupy only a third of senior management roles. More concerning is their presence in board composition, where women currently hold just 18.8% of directorships among Hong Kong-listed companies as shown in Figure 1.
This disparity highlights the urgency of addressing gender diversity on boards. This is why another key regulatory change is the HKEX's mandate requiring all-male boards to appoint at least one female director by December 2024. It is a part of the broader efforts to improve gender diversity in corporate governance.
By December 2024, Hong Kong’s firms are expected to show substantial progress in enhancing gender diversity on their boards. This shift aims to create a more balanced and inclusive corporate environment, offering equal opportunities for aspiring leaders of all genders. As companies work to meet these targets, the hope is that boards will reflect a fairer and more equitable landscape, ensuring that leadership roles are accessible to talent from diverse backgrounds, ultimately contributing to stronger governance and decision-making processes.
Rethinking Independence
While the major issues have been discussed, independence among INEDs remains a taboo. A problem that was recently observed by shareholder activist David Webb is that “About 90 per cent of Hong Kong-listed companies have controlling shareholders, and these controllers vote to elect the INEDs, so they are only as independent and competent as the controlling shareholders want them to be.” Therefore, to prevent CEOs or significant shareholders from controlling too many governance decisions, HKEX stipulated that listed companies must maintain a specific ratio of INEDs. Furthermore, they have proposed a limit of a nine-year maximum tenure for INEDs aims to address concerns that long-serving directors may lose their independence over time.
Future Developments
On top of the restrictions on overboarding and term limits, and the drive towards improved diversity, there are other developments that may impact the selection of INEDs.
ESG disclosure requirements continue to become more complex and, as a result, the risk factors for organisations increase in parallel. Once regulators begin enforcing on non-compliance, there will be a driver to manage this risk at board level. The more progressive companies who are placing sustainability at the core of their businesses may also look to ensure this knowledge is represented on the board to ensure long-term investments in this space are supported.
Whilst technology has always had an agenda slot, it is likely that the convergence of data, security and AI/machine learning will bring a unique context to managing risks that may need to be more directly represented by knowledgeable individuals on corporate boards.
Conclusion
We observe that across listed and privately owned organisations, board structures, strategy and recruitment are handled in an inconsistent manner. The appointment of new board members should be an ‘arm’s length’ process with a clear definition of the skills and profile needed to create balance and a wide funnel of potential candidates reviewed against these criteria. This is not always the case with referrals for open positions occurring within a closed network.
We also see a lack of talent ‘liquidity’ in both the corporate and NGO sectors. There are candidates interested in both paid and volunteer board and advisory roles but no way of seeking these positions in a centralised way.
To try and resolve this issue, we launched a Board & Advisory talent pool as our first initiative on our ConnectedTalent platform. The platform enables employers to search for talent based on skills and industry experience and candidates to opt in/out of different types of roles. Access will remain free to nonprofits as part of our social purpose and will ultimately be a paid service for corporates. We are currently building the candidate base (register here) and will open in beta mode to employers in January 2025. Employers may register their interest here in advance to be notified.
To discuss board strategy and recruitment, feel free to contact Mathew Gollop, Managing Director at ConnectedGroup – mat@connectedgroup.com
Article by Raphael Deren and Mathew Gollop
Share This Blog
Recent Articles
Talent now transcends the industry barriers in the ESG & Sustainability [ESGS] space, and the meaning of ‘sustainability’ has become more diverse and complex. As a result, we have extracted this function as a dedicated specialism and have spent much of 2024 speaking with a wide range of professionals ranging from Heads of Sustainability down to graduates entering the sector. These conversations and our wider research have given us insights into the trends, challenges and attitudes shaping the space which we have outlined here. Moving forwards, we will continue to share our findings and will launch a quarterly newsletter in November ( follow us on LinkedIn to get the notification). The Last 12-18 months Overview If you have been blissfully ignorant of the employment market situation in Hong Kong (in which case, we envy you!) then you can review our quarterly Talent Insight Reports to get the low down. In short, it has been a difficult period with a much lower volume of employment opportunities in Hong Kong. Economic challenges, such as high inflation and slower growth, along with geopolitical tensions, have impacted the pace of the green transition and the associated job market dynamics. Hong Kong Headcount ESGS has seemingly weathered this period without any significant headcount loss, other than the trimming of a smaller number of senior positions in some larger corporates. Team structures supporting data and reporting seem more mature and embedded, and hence have survived any downsizing. However, investment in wider training exercises or earlier stage projects have more commonly been put on hold. Cost-cutting and fiscal conservatism have proved to be the norm across most sectors. This restraint on new projects and the ability for individuals to make an impact is becoming a leading cause of frustration amongst sustainability professionals. This is one of the biggest reasons for talent to look outward into the market. However, new roles have been extremely limited with a small uptick in hiring only beginning to be seen in the current quarter. Leading by Example One of the key organisations pushing forwards this year has been the Hong Kong Jockey Club, solidifying a core team and outlining the beginning of a journey to pull together disparate projects and articulate their sustainability goals in a more cohesive way. When a major institution such as this sets out a clear vision, it can only be a positive message to the rest of the market. We see that their efforts will likely set the standard for other Hong Kong institutions to follow. The Next 12-18 months Reporting Talent In the short term, we are likely to see a rise in demand for individuals with reporting experience to help organisations transition to HKFRS 1 and HKFRS 2 / IFRS S1 & S2 and the new HKEX standards. Whether this talent is hired on a permanent, contract or consulting basis will depend on the current maturity of the relevant reporting function. Currently we observe that while there are companies who have well-established in-house reporting structures, there is another set of organisations who are lagging, and have been managing by outsourcing their reporting to third parties. With the increasing complexity of mandatory requirements, it is likely that these organisations will need more in-house capacity and resources. The mid-level reporting talent currently sitting in more mature teams/departments are likely to become a prime target for these companies. Salary increases and bigger titles will be an attraction which will likely mean an increased demand in a relatively tight talent pool. One defence against attrition in these functions will be the increased use of automation for ESG reporting and data systems. As these platforms become more sophisticated, it will enable teams to keep up with the ever-evolving HKEX & ISSB/IFRS standards without the need for increased headcount. However, we don’t see this being effective to the degree where these efficiencies will balance the increased talent demand in the shorter term. Strategy & Integration The general sense from professionals in the sector (across all industries) is that there will still be a strong future demand for talent in Hong Kong. This growth is likely to come from the integration end of the spectrum as the need to pull the ESGS goals into the wider business strategy is becoming critical to ensure positive impact is embedded and measured. In this area, we already see major gaps in expectations versus reality. Hong Kong lacks depth in its senior pool (most senior leadership in sustainability are not home grown). At one layer down, outside of data/reporting/compliance, the same problem exists. Organisations are often expecting to find a perfect combination of technical sustainability knowledge, relevant business exposure, plus the change management skills. However, this mix of skills is in very short supply The two solutions to this are either to cast the net wider and recruit globally or, pull talent with the business knowledge and soft skills across and cross-train them. The challenge with the latter is that not everyone in a functional specialism wants to make this shift but, candidates from transformation/change backgrounds could be a key target. Hong Kong’s Role For Hong Kong, whilst it has had a slower start in terms of development in this space, there is an opportunity to play a pivotal role in the regional and global ESGS ecosystem. With both Hong Kong and Beijing governments framing HK as the key place for Chinese firms to IPO in the coming years, the complexity of cross-border and global requirements will lead to increased need for harmonisation of regulations. HKFRS S1 and S2, are designed to fully align with the IFRS S1 and S2 standards and this alignment will help to better integrate Hong Kong businesses with global and Mainland Chinese capital markets. This is an area in which Hong Kong can play a leading role, particularly if the government’s efforts to strengthen its position as a global talent and green financing hub continue to gain traction. With the HKMA’s latest net zero targets for the banking sector, the flow of capital looks like it will continue to advance against a more sustainable agenda. One thing is for certain, corporate sustainability is here to stay and this is not just a listed company issue. The Sandpiper Global Reputation Capital Index report highlights what we see on that ground - that even some larger private organisations are seeing the sense in ensuring their ESG reporting meets the market standards. Key Observations Reporting and data talent will likely be in demand once again as we head into 2025 Experienced strategy and integration talent is in very short supply. Global talent sourcing or cross-functional training are the key solutions. Our Core Services We can support organisations with their ESGS talent agendas in a number of ways: Executive recruitment Retained executive search Contract resources (individuals sub-contracted for specific periods on yours or our payroll) Statement of work driven projects (you have a goal to achieve, and we deliver the team and run the program) Talent management, leadership and wellbeing consultancy Our Value Adds We are happy to assist our clients with additional data, insights and opportunities such as: Salary surveys Case study sharing and strategy benchmarking Webinar and events support/co-creation Industry roundtables Written by Mathew Gollop & Aadya Kapur . For more information, please reach out to Mathew at mat@connectedgroup.com
For much of 2023 and through 2024 we have experienced a period of economic uncertainty in Hong Kong which is worse than anything we have seen since the 2001 dotcom bubble burst and bled into the SARS outbreak in 2002. Social unrest followed by the Covid pandemic, geopolitical instability, and a sluggish mainland economy have all led to a challenging time for jobseekers. Here we try and share some of the responses to common questions that we have been consistently answering. Some of these were addressed in a better market back in 2022 by our MD in this article but, here we look at the issues in the current climate. When Will Things Improve? The short answer is, of course, we don’t know for sure. If we did, it is likely we would be making our money in something easier than recruitment! What we can say is that there is a sense that we are through the worst and, at the time of writing (late October 2024), dropping interest rates and economic stimulus are looking like they should kickstart a recovery. The impact of this on hiring is less likely to become significant until organisations move into their next financial year (commonly January or April) and, even then, we expect the first half of 2025 to remain conservative. Why Do I Not Receive Feedback? Applying for jobs online can feel like throwing your CV into a blackhole and this is the greatest frustration we hear from all jobseekers. The reasons why this has become so prevalent are not 100% clear but it seems to be a combination of factors: Limited resources – employers and agencies are stretched after reducing headcount. With increasing numbers of candidates on the market, there just isn’t the bandwidth to offer meaningful feedback to all applicants. Automation – recruitment automation has focused on screening efficiency but has not improved the candidate engagement process. Headcount anxiety – organisations have budgeted headcount, and roles are posted, but hiring managers remain conservative and don’t move the process forwards. For more commentary on this – see pages 12, 13 & 14 of our recent Talent Insights Report. The best advice we can provide is not to take this personally – it is not an issue that only you are suffering from. This doesn’t make it any less frustrating, but it does hopefully enable you to see it more objectively and less emotionally. Do All Roles Really Need Chinese Language Skills? The reasons why Cantonese has become an increasingly common prerequisite on job descriptions are complex and nuanced. It would need another article to explain why but, here we focus on how to approach this issue if you are a non-Cantonese speaker. Don’t assume that agency recruiters are using this criterion without good reason. External recruiters are driven by client expectations but will do what they can to widen the funnel of potential talent. In this market, employers have very specific requirements that need to be met to justify the cost of recruitment fees and so the influence of recruiters over the screening criteria is limited. If you can resign yourself to the previous point that you may not receive feedback on your application, still apply for roles that state the need for local language skills. If an organisation later relaxes the requirement, then they may revisit your profile. Equally, they may see you as a fit for other roles that have not yet been posted. Language skills can sit on job descriptions in the HR database, but the hiring manager may not see them as critical. Where possible, in addition to making an application, reach out directly to the potential hiring manager (via best guess on LinkedIn or, even better, through referral by personal connection). Our expectation is that, as the markets begin to recover and demand for talent increases, the need for more diverse talent pipelines will become clear. The government has been promoting the need for Hong Kong to position itself as an international talent hub and this will see more momentum as hiring volumes increase. Is There a Better Way to Approach My Job Search? One piece of advice for any candidate in an active job search is that the process itself is an opportunity to expand your network. Consider the value of the network itself, rather than just as a transactional means to and end and use these tips to help you. Create a way to track your progress. A simple format would be a spreadsheet with companies, names, titles and contact information with a note of the date of your last message/call/VC/meeting so that you can follow up at regular intervals. Use any connections you have from past roles and your social network to help with introductions and reach out directly to people on LinkedIn that seem appropriate. Unless there is a specific role you are aware of, don’t ask if someone is hiring as a way of making a connection. Ask for their advice and help to understand and navigate the market. This way they won’t feel like they have to let you down and it will be a more positive experience for them. Include recruiters in this exercise. Nudge them gently every few weeks, ask whether specific jobs they are advertising could be a fit, but remain respectful and polite. Recruiters are handling a lot of frustrated candidate communications in markets like these whilst trying to meet their own targets in an environment where salary reductions and layoffs are common. Treat each meaningful connection you make as a win. You will get more rejections and disappointments than positive results so, see the value in each new addition you bring to your network. You will also see that you have a stronger resource in your next role that you are able to leverage. Anything Else? To close out, here are a few CV tips: If you are not a Hong Kong National but you have a working visa, state this clearly on your resume (suggest at the top, under your name) i.e. ‘Hong Kong Permanent Resident’ or ‘Dependent Visa Holder – No Sponsorship Required’ etc. Don’t include a photo on your resume – this is not a market norm and therefore makes your CV look like an outlier. Make sure your contact details are on your resume in case it gets separated from your e-mail and/or cover letter. Mobile phone number and e-mail address are enough – any more than this is a data risk. You can check our current vacancies here. Feel free to make a general application via infoHK@connectedgroup.com
Hong Kong, August 29, 2024 – Great Place To Work®, the global authority on workplace culture, has selected ConnectedGroup for the 2024 Best Workplaces in Asia™ List . This year’s list features 200 organizations that were chosen after surveying over 2.7 million employees in Asia and the Middle East about their experience in the workplace. In total, the survey results represent the work experiences of over 6.9 million employees across the region. Companies were considered for the list after being selected for local honors on national Best Workplaces™ Lists (ConnectedGroup was selected for the Best WorkplacesTM in Hong Kong 2024 & Best Workplaces in Greater China 2024). This recognition is based on confidential survey data assessing employee experiences of trust, innovation, company values, and leadership. Companies are also evaluated on how well they are creating a For All TM workplace experience, where all employees are welcomed and celebrated no matter who they are or what they do. Companies on the list in 2024 have higher numbers of employees who report a positive experience at work compared to the typical workplace in Asia. When companies build high levels of trust with employees, they are more likely to be prepared for disruption At the Best Workplaces, 89% of employees report that their company celebrates people who try new ways of doing things — 27 points higher than the 62% of employees who said the same at typical workplaces in Asia. When employees say their company celebrates people who try new things, they are 69% more likely to adapt quickly to change and 18% more likely to give extra effort on the job. “Congratulations to the Best Workplaces in Asia,” says Michael C. Bush, CEO of Great Place To Work. “These companies prove that investing in people can lead to better outcomes for business and better outcomes for the planet.” The Best Workplaces in Asia List is published here. About ConnectedGroup Established in 1997 In Hong Kong, ConnectedGroup is a regional executive recruitment, search, and talent consultancy with broad coverage across a range of functional and industry specialisms. Our core services include; Retained Executive Search, Exclusive Contingent Search, Contingent Recruitment, Contract Staffing, Interim Management, Payroll Services and HR/Wellbeing Consultancy. This holistic approach to talent advisory enables an end-to-end view of the key issues and challenges that our clients face and how we can help resolve them. Our strategy is to continue to develop our offering as a 'big boutique' where we combine high levels of engagement and accountability with a comprehensive scope of delivery capability. Our vision is to ‘use recruitment as a lever to improve lives', supported by a mission of 'raising the recruitment industry standard by consistently delivering on our ’ConnectedPledge '. We recruit and measure our employees against the values of being Candid, Creative, Connected and Caring which influences our open and transparent culture whilst encouraging new ideas and focuses us on internal communications that leverage greater benefits for our clients. Beyond our mission and values, we have developed a strong social purpose of 'amplifying goodwill through the connection of talent with great causes' which has led us beyond just considering our professional impact, to focusing on how we can positively influence our communities. We are the founder of www.recruit4good.com - a not-for-profit initiative that aims to provide a job board and career portal at zero cost to the charitable sector. About the 2024 Best Workplaces in Asia List Great Place To Work selected the 2024 Best Workplaces in Asia List by analyzing companies’ workplace programs and surveying over 2.7 million employees across multiple countries in Asia and the Middle East. The responses represent the experience of nearly 6.9 million employees across the region. To be considered, companies must first be identified as outstanding in their local region by appearing on one or more of our Best Workplaces™ Lists in Bahrain, Greater China (including China, Hong Kong, and Taiwan), India, Indonesia, Japan, Kuwait, Oman, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, UAE, or Vietnam during 2023 or early 2024. Companies rank in three size categories: small and medium (50–499 employees), large (500+ employees), and multinational. Multinational organizations are also assessed on their efforts to create great workplaces across multiple countries in the region. Multinationals must appear on at least two national lists in Asia and the Middle East and have at least 1,000 employees worldwide with either 40% of its total workforce, or more than 5,000 employees located outside their headquarters country. About Great Place To Work As the global authority on workplace culture, Great Place To Work brings 30 years of groundbreaking research and data to help every workplace become a great place to work for all. Their proprietary platform and For All Model help companies evaluate the experience of every employee, with exemplary workplaces becoming Great Place To Work Certified™ or receiving recognition on a coveted Best Workplaces List. Media enquiries: Mathew Gollop Managing Director ConnectedGroup +852 3972 5874 mat@connectedgroup.com
In the wake of the pandemic, the job market was thrown into chaos, leading to what we now call the ‘Great Resignation’. Here we explore this mass exodus, the reasons behind it, the subsequent ‘Great Reshuffle’, and the current trend of the ‘Big Stay’, shedding light on the evolving dynamics between employers and employees. The Great Resignation - 2020 & 2021 During the pandemic, the job market was full of uncertainty and mass layoffs; millions lost their jobs, and those who remained employed clung to their roles. However, as soon as life started to return to normal, unexpected shifts occurred that shocked the employment market. Millions of people around the globe started to voluntarily resign from their jobs, leading to the phenomenon known as the Great Resignation - a term coined by organizational psychologist Anthony Klotz. It really began with a socio-phenomenon – grief, anxiety and the realisation that life was short which made people re-evaluate their personal and professional lives. Professionally, the reasons behind this mass exodus were varied. The Personio study highlighted that more than half of those planning to quit cited a reduction in benefits, worsening work-life balance, or toxic workplace culture. Additionally, a Pew Research Center survey found that low pay (63%), lack of advancement opportunities (63%), and feeling disrespected at work (57%) were significant factors. Childcare issues (48%), lack of flexibility in work hours (45%), and inadequate benefits (43%) were also notable reasons. A Microsoft survey of over 30,000 global workers revealed that 41% were considering quitting or changing professions within 2021. In the US, April 2021 saw a record-breaking four million resignations, according to the Department of Labor. These rates were particularly high among mid-career employees and were most pronounced in the technology and healthcare industries. In Hong Kong, the Great Resignation was similarly impactful, with a significant portion of the workforce reevaluating their life priorities and career choices. A survey by Cigna revealed that 37% of employees in Hong Kong had changed jobs in that past year, driven by a desire for better work-life balance and more meaningful work. Additionally, nearly 90% of respondents in Hong Kong reported feeling stressed, with 19% finding this stress unmanageable, highlighting the intense pressure facing the workforce. The Great Reshuffle - 2022 ‘ The Great Resignation’ created a high volume of job openings and staff shortages in some industries and functions. Now people sought “a greater ability for people to fit work into their lives, instead of having lives that squeeze into their work.” – Anthony Klotz . During this period, it became incredibly difficult to retain top talent, and the ‘war for talent’ resurfaced in earnest. As a frantic response, companies started to (in retrospect) over-hire and lure employees with premium packages. Later it became clearer that rather than quitting the workforce altogether, many employees had left to find something more fulfilling that aligned better with their values and lifestyle choices. They carefully chose opportunities that gave them the right pay, benefits and work arrangements in the longer term. Some people completely switched their professions, and some set up their own businesses. Thus, this reshuffling of the workforce led Anthony Klotz to coin “ The Great Reshuffle.” The Big Stay - 2023 Until Today The coming of 2023 brought the era of the ‘Big Stay’. It says something about the way that we have all perceived the passing of time since the pandemic that we so easily call these trends ‘Eras’! Contrasting what was going on 2021-22 where around 4 million workers globally were quitting their jobs, the ‘Big Stay’ denotes the intention of workers to remain in their current jobs for an extended period. The chief architect of this trend is the grim blend of geopolitical tensions along with unfavourable economic conditions. Shift in Power dynamics The current economic circumstances have pushed companies towards cost-cutting measures including mass layoffs. They are essentially “rightsizing” the organisation after the over-hiring of 2022 as we highlighted in our 2024 Q1 Talent Insights Report . Hence, with low demand, the labour supply in the market has been on the increase. This puts employers in a leveraged position where current employees are fighting to keep their jobs. Moreover, switching jobs (which previously came with a promise of a significant pay bump) is now a less attractive and risker option. As expected, given the decline in opportunities, wage increases are notably modest. This shifting power dynamic is well represented in this graphic by EY:
Talent now transcends the industry barriers in the ESG & Sustainability [ESGS] space, and the meaning of ‘sustainability’ has become more diverse and complex. As a result, we have extracted this function as a dedicated specialism and have spent much of 2024 speaking with a wide range of professionals ranging from Heads of Sustainability down to graduates entering the sector. These conversations and our wider research have given us insights into the trends, challenges and attitudes shaping the space which we have outlined here. Moving forwards, we will continue to share our findings and will launch a quarterly newsletter in November ( follow us on LinkedIn to get the notification). The Last 12-18 months Overview If you have been blissfully ignorant of the employment market situation in Hong Kong (in which case, we envy you!) then you can review our quarterly Talent Insight Reports to get the low down. In short, it has been a difficult period with a much lower volume of employment opportunities in Hong Kong. Economic challenges, such as high inflation and slower growth, along with geopolitical tensions, have impacted the pace of the green transition and the associated job market dynamics. Hong Kong Headcount ESGS has seemingly weathered this period without any significant headcount loss, other than the trimming of a smaller number of senior positions in some larger corporates. Team structures supporting data and reporting seem more mature and embedded, and hence have survived any downsizing. However, investment in wider training exercises or earlier stage projects have more commonly been put on hold. Cost-cutting and fiscal conservatism have proved to be the norm across most sectors. This restraint on new projects and the ability for individuals to make an impact is becoming a leading cause of frustration amongst sustainability professionals. This is one of the biggest reasons for talent to look outward into the market. However, new roles have been extremely limited with a small uptick in hiring only beginning to be seen in the current quarter. Leading by Example One of the key organisations pushing forwards this year has been the Hong Kong Jockey Club, solidifying a core team and outlining the beginning of a journey to pull together disparate projects and articulate their sustainability goals in a more cohesive way. When a major institution such as this sets out a clear vision, it can only be a positive message to the rest of the market. We see that their efforts will likely set the standard for other Hong Kong institutions to follow. The Next 12-18 months Reporting Talent In the short term, we are likely to see a rise in demand for individuals with reporting experience to help organisations transition to HKFRS 1 and HKFRS 2 / IFRS S1 & S2 and the new HKEX standards. Whether this talent is hired on a permanent, contract or consulting basis will depend on the current maturity of the relevant reporting function. Currently we observe that while there are companies who have well-established in-house reporting structures, there is another set of organisations who are lagging, and have been managing by outsourcing their reporting to third parties. With the increasing complexity of mandatory requirements, it is likely that these organisations will need more in-house capacity and resources. The mid-level reporting talent currently sitting in more mature teams/departments are likely to become a prime target for these companies. Salary increases and bigger titles will be an attraction which will likely mean an increased demand in a relatively tight talent pool. One defence against attrition in these functions will be the increased use of automation for ESG reporting and data systems. As these platforms become more sophisticated, it will enable teams to keep up with the ever-evolving HKEX & ISSB/IFRS standards without the need for increased headcount. However, we don’t see this being effective to the degree where these efficiencies will balance the increased talent demand in the shorter term. Strategy & Integration The general sense from professionals in the sector (across all industries) is that there will still be a strong future demand for talent in Hong Kong. This growth is likely to come from the integration end of the spectrum as the need to pull the ESGS goals into the wider business strategy is becoming critical to ensure positive impact is embedded and measured. In this area, we already see major gaps in expectations versus reality. Hong Kong lacks depth in its senior pool (most senior leadership in sustainability are not home grown). At one layer down, outside of data/reporting/compliance, the same problem exists. Organisations are often expecting to find a perfect combination of technical sustainability knowledge, relevant business exposure, plus the change management skills. However, this mix of skills is in very short supply The two solutions to this are either to cast the net wider and recruit globally or, pull talent with the business knowledge and soft skills across and cross-train them. The challenge with the latter is that not everyone in a functional specialism wants to make this shift but, candidates from transformation/change backgrounds could be a key target. Hong Kong’s Role For Hong Kong, whilst it has had a slower start in terms of development in this space, there is an opportunity to play a pivotal role in the regional and global ESGS ecosystem. With both Hong Kong and Beijing governments framing HK as the key place for Chinese firms to IPO in the coming years, the complexity of cross-border and global requirements will lead to increased need for harmonisation of regulations. HKFRS S1 and S2, are designed to fully align with the IFRS S1 and S2 standards and this alignment will help to better integrate Hong Kong businesses with global and Mainland Chinese capital markets. This is an area in which Hong Kong can play a leading role, particularly if the government’s efforts to strengthen its position as a global talent and green financing hub continue to gain traction. With the HKMA’s latest net zero targets for the banking sector, the flow of capital looks like it will continue to advance against a more sustainable agenda. One thing is for certain, corporate sustainability is here to stay and this is not just a listed company issue. The Sandpiper Global Reputation Capital Index report highlights what we see on that ground - that even some larger private organisations are seeing the sense in ensuring their ESG reporting meets the market standards. Key Observations Reporting and data talent will likely be in demand once again as we head into 2025 Experienced strategy and integration talent is in very short supply. Global talent sourcing or cross-functional training are the key solutions. Our Core Services We can support organisations with their ESGS talent agendas in a number of ways: Executive recruitment Retained executive search Contract resources (individuals sub-contracted for specific periods on yours or our payroll) Statement of work driven projects (you have a goal to achieve, and we deliver the team and run the program) Talent management, leadership and wellbeing consultancy Our Value Adds We are happy to assist our clients with additional data, insights and opportunities such as: Salary surveys Case study sharing and strategy benchmarking Webinar and events support/co-creation Industry roundtables Written by Mathew Gollop & Aadya Kapur . For more information, please reach out to Mathew at mat@connectedgroup.com
For much of 2023 and through 2024 we have experienced a period of economic uncertainty in Hong Kong which is worse than anything we have seen since the 2001 dotcom bubble burst and bled into the SARS outbreak in 2002. Social unrest followed by the Covid pandemic, geopolitical instability, and a sluggish mainland economy have all led to a challenging time for jobseekers. Here we try and share some of the responses to common questions that we have been consistently answering. Some of these were addressed in a better market back in 2022 by our MD in this article but, here we look at the issues in the current climate. When Will Things Improve? The short answer is, of course, we don’t know for sure. If we did, it is likely we would be making our money in something easier than recruitment! What we can say is that there is a sense that we are through the worst and, at the time of writing (late October 2024), dropping interest rates and economic stimulus are looking like they should kickstart a recovery. The impact of this on hiring is less likely to become significant until organisations move into their next financial year (commonly January or April) and, even then, we expect the first half of 2025 to remain conservative. Why Do I Not Receive Feedback? Applying for jobs online can feel like throwing your CV into a blackhole and this is the greatest frustration we hear from all jobseekers. The reasons why this has become so prevalent are not 100% clear but it seems to be a combination of factors: Limited resources – employers and agencies are stretched after reducing headcount. With increasing numbers of candidates on the market, there just isn’t the bandwidth to offer meaningful feedback to all applicants. Automation – recruitment automation has focused on screening efficiency but has not improved the candidate engagement process. Headcount anxiety – organisations have budgeted headcount, and roles are posted, but hiring managers remain conservative and don’t move the process forwards. For more commentary on this – see pages 12, 13 & 14 of our recent Talent Insights Report. The best advice we can provide is not to take this personally – it is not an issue that only you are suffering from. This doesn’t make it any less frustrating, but it does hopefully enable you to see it more objectively and less emotionally. Do All Roles Really Need Chinese Language Skills? The reasons why Cantonese has become an increasingly common prerequisite on job descriptions are complex and nuanced. It would need another article to explain why but, here we focus on how to approach this issue if you are a non-Cantonese speaker. Don’t assume that agency recruiters are using this criterion without good reason. External recruiters are driven by client expectations but will do what they can to widen the funnel of potential talent. In this market, employers have very specific requirements that need to be met to justify the cost of recruitment fees and so the influence of recruiters over the screening criteria is limited. If you can resign yourself to the previous point that you may not receive feedback on your application, still apply for roles that state the need for local language skills. If an organisation later relaxes the requirement, then they may revisit your profile. Equally, they may see you as a fit for other roles that have not yet been posted. Language skills can sit on job descriptions in the HR database, but the hiring manager may not see them as critical. Where possible, in addition to making an application, reach out directly to the potential hiring manager (via best guess on LinkedIn or, even better, through referral by personal connection). Our expectation is that, as the markets begin to recover and demand for talent increases, the need for more diverse talent pipelines will become clear. The government has been promoting the need for Hong Kong to position itself as an international talent hub and this will see more momentum as hiring volumes increase. Is There a Better Way to Approach My Job Search? One piece of advice for any candidate in an active job search is that the process itself is an opportunity to expand your network. Consider the value of the network itself, rather than just as a transactional means to and end and use these tips to help you. Create a way to track your progress. A simple format would be a spreadsheet with companies, names, titles and contact information with a note of the date of your last message/call/VC/meeting so that you can follow up at regular intervals. Use any connections you have from past roles and your social network to help with introductions and reach out directly to people on LinkedIn that seem appropriate. Unless there is a specific role you are aware of, don’t ask if someone is hiring as a way of making a connection. Ask for their advice and help to understand and navigate the market. This way they won’t feel like they have to let you down and it will be a more positive experience for them. Include recruiters in this exercise. Nudge them gently every few weeks, ask whether specific jobs they are advertising could be a fit, but remain respectful and polite. Recruiters are handling a lot of frustrated candidate communications in markets like these whilst trying to meet their own targets in an environment where salary reductions and layoffs are common. Treat each meaningful connection you make as a win. You will get more rejections and disappointments than positive results so, see the value in each new addition you bring to your network. You will also see that you have a stronger resource in your next role that you are able to leverage. Anything Else? To close out, here are a few CV tips: If you are not a Hong Kong National but you have a working visa, state this clearly on your resume (suggest at the top, under your name) i.e. ‘Hong Kong Permanent Resident’ or ‘Dependent Visa Holder – No Sponsorship Required’ etc. Don’t include a photo on your resume – this is not a market norm and therefore makes your CV look like an outlier. Make sure your contact details are on your resume in case it gets separated from your e-mail and/or cover letter. Mobile phone number and e-mail address are enough – any more than this is a data risk. You can check our current vacancies here. Feel free to make a general application via infoHK@connectedgroup.com
Hong Kong, August 29, 2024 – Great Place To Work®, the global authority on workplace culture, has selected ConnectedGroup for the 2024 Best Workplaces in Asia™ List . This year’s list features 200 organizations that were chosen after surveying over 2.7 million employees in Asia and the Middle East about their experience in the workplace. In total, the survey results represent the work experiences of over 6.9 million employees across the region. Companies were considered for the list after being selected for local honors on national Best Workplaces™ Lists (ConnectedGroup was selected for the Best WorkplacesTM in Hong Kong 2024 & Best Workplaces in Greater China 2024). This recognition is based on confidential survey data assessing employee experiences of trust, innovation, company values, and leadership. Companies are also evaluated on how well they are creating a For All TM workplace experience, where all employees are welcomed and celebrated no matter who they are or what they do. Companies on the list in 2024 have higher numbers of employees who report a positive experience at work compared to the typical workplace in Asia. When companies build high levels of trust with employees, they are more likely to be prepared for disruption At the Best Workplaces, 89% of employees report that their company celebrates people who try new ways of doing things — 27 points higher than the 62% of employees who said the same at typical workplaces in Asia. When employees say their company celebrates people who try new things, they are 69% more likely to adapt quickly to change and 18% more likely to give extra effort on the job. “Congratulations to the Best Workplaces in Asia,” says Michael C. Bush, CEO of Great Place To Work. “These companies prove that investing in people can lead to better outcomes for business and better outcomes for the planet.” The Best Workplaces in Asia List is published here. About ConnectedGroup Established in 1997 In Hong Kong, ConnectedGroup is a regional executive recruitment, search, and talent consultancy with broad coverage across a range of functional and industry specialisms. Our core services include; Retained Executive Search, Exclusive Contingent Search, Contingent Recruitment, Contract Staffing, Interim Management, Payroll Services and HR/Wellbeing Consultancy. This holistic approach to talent advisory enables an end-to-end view of the key issues and challenges that our clients face and how we can help resolve them. Our strategy is to continue to develop our offering as a 'big boutique' where we combine high levels of engagement and accountability with a comprehensive scope of delivery capability. Our vision is to ‘use recruitment as a lever to improve lives', supported by a mission of 'raising the recruitment industry standard by consistently delivering on our ’ConnectedPledge '. We recruit and measure our employees against the values of being Candid, Creative, Connected and Caring which influences our open and transparent culture whilst encouraging new ideas and focuses us on internal communications that leverage greater benefits for our clients. Beyond our mission and values, we have developed a strong social purpose of 'amplifying goodwill through the connection of talent with great causes' which has led us beyond just considering our professional impact, to focusing on how we can positively influence our communities. We are the founder of www.recruit4good.com - a not-for-profit initiative that aims to provide a job board and career portal at zero cost to the charitable sector. About the 2024 Best Workplaces in Asia List Great Place To Work selected the 2024 Best Workplaces in Asia List by analyzing companies’ workplace programs and surveying over 2.7 million employees across multiple countries in Asia and the Middle East. The responses represent the experience of nearly 6.9 million employees across the region. To be considered, companies must first be identified as outstanding in their local region by appearing on one or more of our Best Workplaces™ Lists in Bahrain, Greater China (including China, Hong Kong, and Taiwan), India, Indonesia, Japan, Kuwait, Oman, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, UAE, or Vietnam during 2023 or early 2024. Companies rank in three size categories: small and medium (50–499 employees), large (500+ employees), and multinational. Multinational organizations are also assessed on their efforts to create great workplaces across multiple countries in the region. Multinationals must appear on at least two national lists in Asia and the Middle East and have at least 1,000 employees worldwide with either 40% of its total workforce, or more than 5,000 employees located outside their headquarters country. About Great Place To Work As the global authority on workplace culture, Great Place To Work brings 30 years of groundbreaking research and data to help every workplace become a great place to work for all. Their proprietary platform and For All Model help companies evaluate the experience of every employee, with exemplary workplaces becoming Great Place To Work Certified™ or receiving recognition on a coveted Best Workplaces List. Media enquiries: Mathew Gollop Managing Director ConnectedGroup +852 3972 5874 mat@connectedgroup.com
In the wake of the pandemic, the job market was thrown into chaos, leading to what we now call the ‘Great Resignation’. Here we explore this mass exodus, the reasons behind it, the subsequent ‘Great Reshuffle’, and the current trend of the ‘Big Stay’, shedding light on the evolving dynamics between employers and employees. The Great Resignation - 2020 & 2021 During the pandemic, the job market was full of uncertainty and mass layoffs; millions lost their jobs, and those who remained employed clung to their roles. However, as soon as life started to return to normal, unexpected shifts occurred that shocked the employment market. Millions of people around the globe started to voluntarily resign from their jobs, leading to the phenomenon known as the Great Resignation - a term coined by organizational psychologist Anthony Klotz. It really began with a socio-phenomenon – grief, anxiety and the realisation that life was short which made people re-evaluate their personal and professional lives. Professionally, the reasons behind this mass exodus were varied. The Personio study highlighted that more than half of those planning to quit cited a reduction in benefits, worsening work-life balance, or toxic workplace culture. Additionally, a Pew Research Center survey found that low pay (63%), lack of advancement opportunities (63%), and feeling disrespected at work (57%) were significant factors. Childcare issues (48%), lack of flexibility in work hours (45%), and inadequate benefits (43%) were also notable reasons. A Microsoft survey of over 30,000 global workers revealed that 41% were considering quitting or changing professions within 2021. In the US, April 2021 saw a record-breaking four million resignations, according to the Department of Labor. These rates were particularly high among mid-career employees and were most pronounced in the technology and healthcare industries. In Hong Kong, the Great Resignation was similarly impactful, with a significant portion of the workforce reevaluating their life priorities and career choices. A survey by Cigna revealed that 37% of employees in Hong Kong had changed jobs in that past year, driven by a desire for better work-life balance and more meaningful work. Additionally, nearly 90% of respondents in Hong Kong reported feeling stressed, with 19% finding this stress unmanageable, highlighting the intense pressure facing the workforce. The Great Reshuffle - 2022 ‘ The Great Resignation’ created a high volume of job openings and staff shortages in some industries and functions. Now people sought “a greater ability for people to fit work into their lives, instead of having lives that squeeze into their work.” – Anthony Klotz . During this period, it became incredibly difficult to retain top talent, and the ‘war for talent’ resurfaced in earnest. As a frantic response, companies started to (in retrospect) over-hire and lure employees with premium packages. Later it became clearer that rather than quitting the workforce altogether, many employees had left to find something more fulfilling that aligned better with their values and lifestyle choices. They carefully chose opportunities that gave them the right pay, benefits and work arrangements in the longer term. Some people completely switched their professions, and some set up their own businesses. Thus, this reshuffling of the workforce led Anthony Klotz to coin “ The Great Reshuffle.” The Big Stay - 2023 Until Today The coming of 2023 brought the era of the ‘Big Stay’. It says something about the way that we have all perceived the passing of time since the pandemic that we so easily call these trends ‘Eras’! Contrasting what was going on 2021-22 where around 4 million workers globally were quitting their jobs, the ‘Big Stay’ denotes the intention of workers to remain in their current jobs for an extended period. The chief architect of this trend is the grim blend of geopolitical tensions along with unfavourable economic conditions. Shift in Power dynamics The current economic circumstances have pushed companies towards cost-cutting measures including mass layoffs. They are essentially “rightsizing” the organisation after the over-hiring of 2022 as we highlighted in our 2024 Q1 Talent Insights Report . Hence, with low demand, the labour supply in the market has been on the increase. This puts employers in a leveraged position where current employees are fighting to keep their jobs. Moreover, switching jobs (which previously came with a promise of a significant pay bump) is now a less attractive and risker option. As expected, given the decline in opportunities, wage increases are notably modest. This shifting power dynamic is well represented in this graphic by EY:
In mid-2005, ConnectedGroup established an office in Dubai, and, by the end of 2007, there was an emerging sense that the dual growth in the UAE and China was driving economic connectivity. The ‘New Silk Road’ was a common refrain and the property development sector, in particular, saw emerging cross-geography strategies. The ‘Great Financial Crisis’ put a swift end to this burgeoning potential in 2008 but, we are now seeing economic flows in a different form. Family office money At a government level, Chief Executive John Lee Ka-chiu's plan to attract over 200 family offices by 2025 reflects an ambition to ensure Hong Kong remains firmly on the map in this sector, despite Singapore’s progress. This goal is backed by the city's robust initiatives, like the Capital Investment Entrant Scheme, offering residency for investments above HK$30 million. Additionally, the presence of over 2,700 family offices, as recently indicated by Deloitte, showcases the city’s ongoing appeal. Besides, Hong Kong's prominence as the world's largest offshore Renminbi trading hub and its initiatives in green financing uniquely position it in the global financial ecosystem. Singapore's strategy contrasts Hong Kong's by focusing on only attracting established, ultra-high-net-worth individuals and family offices. The Global Investor Program, targeting individuals with at least SG$200 million in investable assets, is central to this approach. Singapore's stable, well-regulated financial environment, combined with incentives like pathways to permanent residency, strengthens its own appeal as a destination for high-calibre wealth management professionals. The Middle East's growing interest in Asian markets significantly impacts both Hong Kong and Singapore. Hong Kong has attracted notable investments from the Middle East in sectors like biotech and technology. Singapore, with its strategic maritime location, continues to draw diverse international investments, including those from Middle Eastern sovereign wealth funds and family offices. Middle Eastern investors are increasingly looking to diversify their portfolios beyond traditional investments and away from oil-based revenues. Asia, with its dynamic economies and emerging markets, presents lucrative opportunities. The rapid growth in sectors like technology, renewable energy, and fintech in Asia is particularly attractive whilst still offering access to infrastructure and real estate investments that offer stable and long-term returns, aligning well with the traditional investment philosophy of many family offices. With Hong Kong’s strategic location near mainland China's tech hubs, and itself focusing on investments in AI, fintech, biotech and alternative energy, it is well aligned. There is also a growing interest among Middle Eastern investors in sustainable and ethical investing. Hong Kong and Singapore's focus on sustainable finance and green investment products appeals to this trend.
Throughout our history at ConnectedGroup, we have seen countless examples of companies with bad hiring strategies and tactics leading to misaligned hires. In the fast-paced and dynamic business environment of Hong Kong, the consequences of making poor hiring choices can be particularly severe. These missteps, usually stem from one or more of the following: Misaligned stakeholder expectations Poorly defined competencies and/or measurables Selection bias (overt or otherwise) Poor referencing Ineffective (or non-existent) induction and onboarding Given the intense pace of Hong Kong’s corporate sector, each hiring decision carries significant weight. A misaligned hire, or the failure to seamlessly assimilate a new employee into the company’s culture, can have ripple effects throughout the organisation. These repercussions can manifest not only in direct financial losses but also in more subtle, yet equally damaging ways, such as eroding the company’s reputation or undermining the morale of its workforce. It is important to note that the ramifications of an unsuitable hire are not only immediate but can also endure over time, potentially altering the company’s trajectory and affecting its long-term success. For small and medium-sized enterprises (SMEs), the stakes are even higher. These businesses often operate with limited budgets and leaner resources, making every investment critical to their survival and growth. The loss incurred from an unsuitable hire is not just the cost of recruitment and training but also the lost opportunity for business advancement and potential loss of investor confidence. Whilst the process itself can be costly, the financial burden becomes even more pronounced when considering the turnover costs associated with employees who resign. According to a study cited by Forbes, the cost of replacing an employee can range from 50% to 200% of the employee’s annual salary. This starkly highlights the high stakes involved in making informed hiring decisions, particularly in Hong Kong’s high cost environment. Productivity loss Beyond financial repercussions, the impact of a poor hiring decision extends far beyond the individual’s direct performance; it can permeate the entire team and disrupt the workflow, leading to a significant decline in productivity. An underperforming employee, whether due to a lack of skills, a mismatch with the company culture, or a deficient work ethic, can become a bottleneck, causing delays in meeting critical deadlines, and producing work that falls short of the company’s standards. This not only compromises the individual’s contributions but also casts a shadow on the collective output of the team. The ripple effects of an underperforming hire, particularly at management or leadership level, can lead to strained relationships within the team, as colleagues may need to compensate for the lackluster performance, which can result in internal conflicts and a toxic work environment. Such scenarios are detrimental to the morale and health of the team. Reputational damage Hong Kong’s tightly woven commercial fabric also means that news—good or bad—travels fast, and a company’s reputation is one of its most valuable assets. A poor hiring decision can have a cascading effect on a company’s reputation. It can start with internal disruptions, such as decreased morale among employees who may feel burdened by the additional workload or disheartened by the lack of competence in their new colleague or manager. This internal discontent can quickly become external, as the quality of service or product may decline, leading to customer dissatisfaction. Ultimately, a company known for poor employment choices may struggle to attract top talent, as prospective employees become wary of associating with a potentially unstable or disreputable organisation. This can create a vicious cycle, where the inability to hire quality candidates further erodes the company’s standing and performance. Whether employment, commercial or product, all brands are built slowly but can be lost quickly.
Supporting Community Impact
Press Release
Recognition from Happy Hongkonger
We are often approached about different recruitment or HR related awards but, came to realise that (in the majority of cases), the only real criteria to win is agreeing to pay for it. There is an industry built around creating events to deliver these awards that ultimately have nothing to do with any performance metrics. They can be good PR opportunities, and a chance for industry professionals to network but, at ConnectedGroup, we made a decision that these 'pay to win' awards do not align with our values . External review is absolutely of value and so, when we identified the Great Place to Work® Greater China framework, we realised this was a well aligned opportunity to more deeply understand our culture. There are 2 phases to the assessment: Complete the employee survey. This is a comprehensive cultural questionnaire that requires a 70% pass rate on its 'Trust Index' to gain certification. CG scored 94% and hence are able to celebrate our certification. This also provides us with meaningful feedback on where we can improve and a baseline to monitor this metric in the future. Undertake a 'Culture Audit'. This involves much deeper answers and the provision of evidence and examples to support the strategies we have undertaken. If we score over 80% on this and the survey combined, we will qualify as one of 'Hong Kong's 2023 Best Workplaces'. For us, this ability to independently verify our efforts to make CG a great work environment is more gratifying than other awards. We deeply believe that having a motivated team who have a strong sense of belonging is how we can best serve our clients and candidates and consistently deliver on our ConnectedPledge . For more information, feel free to reach out to our MD, Mathew Gollop at mat@connectedgroup.com
We look forward to connecting with you
Location
ConnectedGroup Ltd
Unit 2708, Level 27, Wing On Centre
111 Connaught Road, Central
Sheung Wan, Hong Kong
Specialisations
Quick Links
