Failure to plug talent shortage could cost Hong Kong $1.73t in lost potential revenue

The city’s competitiveness could be easily eroded within a decade if companies do not act soon.

Hong Kong’s total unrealised output is expected to hit $1.73t (US$219.8b) by 2030 if it fails to find a solution to the worsening skilled talent shortage plaguing the rest of the developed world, according to a study by business consulting firm KornFerry.

In fact, Hong Kong ranks fifth in the Asia Pacific markets surveyed that stands to lose the most if it fails to plug its labour deficit that’s poised to hit 1.88m by 2030. China tops the rankings as its total unrealised output hits a whopping $11.25t (US$1,433.5b) followed by Japan at $10.88t (US$1,386.8b). Australia and Indonesia snagged the third and fourth spots with an unrealised output of $4.61t (US$587.6b) and $3.47t (US$442.6b) respectively.

Also read: 3 in 5 companies unprepared for digital reskilling

The city’s strongest point, financial and business services industry, stands to be hardest hit across the region if labour shortages are not addressed. In fact, Hong Kong’s financial services skills shortage may result in lost revenue equal to a staggering 12% of its total economy, compared with Singapore that only stands to lose around 6%.

“The talent crunch will be even more damaging for small but currently mighty spots Hong Kong and Singapore,” Korn Ferry noted.

On a global scale, labour shortages in global financial and business services are the most acute, with a potential deficit of 10.7m workers globally by 2030.

In the telecommunications, media and technology scene, the potential impact of the labour shortage in Hong Kong is 16.9b by 2030. The unrealised output as percentage of its total economy is the highest in the APAC at 9%.

The city’s manufacturing sector will also not be left unscathed as the highly skilled talent deficit will be equivalent to 80% of the total workforce by 2030. In fact, the manufacturing sector is facing a global talent deficit crisis of 7.9m workers by 2030, despite being the only sector with a surplus of highly skilled workers in 2020.

“Companies across Asia Pacific must act now to future-proof their business. Left unaddressed, the talent crunch will severely impact the growth of key markets and sectors across the region,” said Korn Ferry Hay Group President Asia Pacific May Knight.