Combating talent shortages in Hong Kong: Offshoring vs. International Hiring
Talent shortage is slowly killing businesses in Hong Kong. A recent study reveals that 69% of companies in Hong Kong expressed difficulty in recruiting talent compared to 5 years ago, citing ‘difficult to recruit capable talent’(60%), ‘the raised expectation for salary and benefits’(58%), ‘difficult to recruit experienced talent’ (48%), and ‘candidates move out of HK’(46%) as the top 4 reasons.
To tackle this challenge? More and more companies are turning to offshoring and international hiring. But what do these strategies entail, and which one should you choose? Let’s dive in.
What is Offshoring?
Offshoring is moving part of your business activities to other countries, typically, to countries with lower living expenses. Examples include setting up overseas call centres, customer service centres, or secretary services.
It’s an old tune in Hong Kong. Manufacturers in Hong Kong had outsourced some, if not all, of their activities to mainland China and other countries in the late 1970s.
The recent offshoring trend is slightly different. Although companies are still trying to leverage the low labour cost in other countries, they are also trying to maximize their reach to new markets and enhance their global presence.
Benefits of Offshoring:
Cost efficiency: Lower labour cost and cheaper office rent.
Leveraging talent advantages: Some countries excel in nurturing skilled workforce boasting individuals proficient in multilingual communication, digital literacy, exceptional customer service, and more.
Time efficiency: Make use of time zone difference to serve customers from every corner of the world.
Building a global presence: Promoting a more prestigious brand, diversifies risk and provides more leeway for strategic growth.
What is International Hiring?
International hiring is bringing overseas talent in-house. The recent talent shortage sees more companies hiring non-locals. The survey mentioned above shows that, out of all surveyed companies, 63% will hire from the mainland China and 60% will hire from overseas.
Benefits of International Hiring:
High-Caliber Talent: Casting a wider net to look for the person(s) matching exactly what your company needs.
Cultural integration: Having expatriates in-house generally causes less cultural friction when compared to offshoring.
Promote learning and development: When hiring the right overseas talent, it will not only kickstart a knowledge transfer but also stimulate growth by mutual learning.
Immediate impact: Unlike offshoring where there will be an adjustment period, overseas recruits can make immediate impact.
Building global network: Expatriates bring in their network and experience. Hiring them are like opening doors to new markets, partnerships and business opportunities.
Which solution should you choose?
Your decision should depend on these factors:
1. Cost: Offshoring is usually more expensive, while international hiring offers more flexibility in pace and scale.
2. Skills needed: Offshoring provides access to specialized skills at lower costs, while international hiring brings high-caliber talents with diverse experience.
3. Integration: International talent usually integrates better with the existing company structure and culture than offshoring.
4. Risk management: Offshoring diversifies risk across geographical boundaries while international hiring diffuses risk by elevating your business horizon.
It is not impossible to have a hybrid model of offshoring and international hiring. When it comes to talent solutions, possibilities are endless. We can’t wait to share our insights with you. Drop us a message and let’s talk.