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Communications of the ACM
Labor Shortfall in Hong Kong's IT Industry
At the end of 1997, the Asian economic crisis created serious financial problems for many countries in the region and Hong Kong was no exception. However, this problem did not last long in Hong Kong. Global IT business trends, coupled with the vigilant business mindset of Hong Kong entrepreneurs, swiftly lifted the city from the trough. Today, it is evident that while other Asian countries are still recovering, Hong Kong is enjoying economic growth.
The advancement of the IT industry in Hong Kong does not come easily. It brings a new set of problems, especially related to IT manpower. IT companies now demand technical expertise along with industry knowledge and this demand is growing quickly. Although the salaries for IT jobs in Hong Kong are generally high, there is still some level of shortfall in IT manpower. This is partially due to the mobility of IT professionals.
A recent survey of the IT manpower situation in Hong Kong [1] (based on data collected in the first quarter of 2000) shows that 3% of the approximate 2.1 million employees1 work in the IT sector—an increase of 36.8% from a similar survey taken three years earlier.
The growth in IT manpower in Hong Kong has been pervasive since 1992 (see the accompanying table excerpted from [1]) and is expected to escalate. This growth is attributed to the nationwide acceptance of IT as the platform for empowering one's business. In particular, the proliferation of e-commerce business clearly shows Hong Kong's readiness for IT. Countless facilities and financial support are offered by the government (under the Innovation and Technology Funds), reflecting the dedication of Hong Kong to become a leading IT hub in the region.
The employment figures in the table reflect only the number of IT employees in Hong Kong. The number of jobs available in the market in 2000, however, is actually higher (63K). Accordingly, some 3% (2K/63K) of the IT jobs in the first quarter of 2001 are unfilled. Similarly, based on the forecast labor growth, the number of IT job vacancies may have risen as high as 7% as of March.
Around 6,624 additional IT experts are required on average annually for the next few years, due to newly created jobs and replenishment of existing ones. In general, companies prefer IT employees to have post-secondary education or higher qualifications. The average annual supply of graduates in IT-related disciplines from local tertiary education institutes is estimated to be 6,791. Out of that some 4,067 are expected to accept local IT employment.
The others are either not appropriately qualified for any IT jobs or choose to do something unrelated. This leads to a significant shortfall in IT manpower each year. To overcome this predicament, companies often recruit overseas graduates returning to Hong Kong or simply take on experienced professionals outside Hong Kong. Last year, 586 IT expatriates were employed. The trend in expatriate employment is expected to continue. High-paying jobs in a cosmopolitan, dynamic, and open culture attract international IT professionals to Hong Kong.
Another common practice to alleviate manpower shortfall is outsourcing. Many local IT companies have set up development and manufacturing branches in Mainland China. Outsourcing to China is a very cost-effective approach. Not only does China have a rich and constant supply of high-quality IT graduates (approximately 100,000 IT students graduate from 1,942 universities), but their salary rates are relatively lower than the average salary in Hong Kong.
The rapid expansion of IT in Hong Kong shows no sign of slowing down. IT will empower the efficiency in business operations. This can reduce running cost and thereby lead to higher profitability. IT-based business will create tremendous demand for manpower both in terms of quality and quantity. This problem is not unique to Hong Kong, many advanced countries are in similar situations. The IT manpower shortfall is not a simple problem and should not be underestimated. Effective solutions often involve lengthy and careful strategic planning in many areas such as education, city planning, tax structure, immigration policies, and so on. Most importantly, any suitable solution demands strong support from the government and close collaboration between industry and educators.
References
1. The Committee of Information Technology Training and Development (ITTDC). 2000 IT Manpower Survey Report. Vocational Training Council, Hong Kong; www.ittdc.org/cittd/00surv_intro.htm.
Footnotes
1 The total number of employees in Hong Kong in March 2000 was about 3.34 million. The 2.1 million employees here is the population involved in the survey.
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