Hong Kong’s brokers and risk professionals are becoming increasingly concerned about the retention and acquisition of talent
Almost half a century ago, Barbra Streisand sang that people who needed people were the luckiest people in the world. That may be so in the private sphere, but when it comes to business, companies are lucky if they can attract people with good skills, language capabilities, local knowledge and other useful talents. And those people should be willing to stick around for a while.
Nowhere is this more apparent than Hong Kong. Greater China Aon Risk Solutions chief executive Owen Belman said many of the territory’s top people were lured away by development opportunities in mainland China and Singapore. “In addition, corporations are spending more effort in retaining talent as the average time per employment is decreasing,” he said.
Lockton’s managing director, corporate and multinational clients, Asia Pacific, Gregory McCoy, added that the spiralling cost of human talent was affecting the profitability of firms, particularly new investors into the region. “The competition for clever people has made human talent a top-three risk in China and in emerging companies throughout Asia,” he said. “Attracting and retaining human talent is a key risk.”
StrategicRISK has been told of a recent riskmapping exercise that examined the poaching of a Hong Kong-based organisation’s talent. It revealed that, despite the fact that the company was spending a lot of money educating its people, they were pinched by competitors once they were all trained up. Indeed, there is a lack of bench strength in many companies which, coupled with high personal costs and low salaries (in comparison with similar roles in Europe and the US) and low notice periods, means keeping and growing talent is tough. JLT Asia chief executive Duncan Howorth (pictured) framed it succinctly: “Companies that have invested in training and development should review their retention strategies.”
PCCW Limited senior vice-president of risk management David Ralph said there were other risks associated with people moving to rivals, such as staff “taking with them the intellectual property they have gained in your employ, including inter alia business practices, new products/designs, and customer lists”.
Remuneration is obviously a big factor in retaining talented young people but another pressing issue is how well managers manage their staff. Are they creating career paths? Are they delivering useful feedback? Are they providing staff with a sense of purpose? Organisations that are good at engaging their employees through performance management and clear discussions about career paths and opportunities are on the right track; those that aren’t tend to see higher turnover ratios. Zurich’s chief executive of global corporate business in the Asia-Pacific region, Keith Thomas, believes that organisations must ask themselves: “How are you treating your workers?”
StrategicRISK has heard quite a bit about the potential danger where some organisations might feel compelled to lower their training standards to cope with a lack of available talent. But recruiting people of a lower technical knowledge means you need to provide more experienced supervision. Thomas also flagged the challenge of maintaining operational experience when you have a young and ambitious, but ultimately inexperienced, workforce. “The question is, who are the more experienced people who are helping to manage the plant; how do you get that knowledge transfer?” he said. “It costs business big time to have this transition of institutional knowledge.”
Another issue raised about Hong Kong in particular is that there are senior managers who still consider their workers to be easily replaceable, perhaps in a throwback to the time when the territory was the textile capital of the region, and labour was cheap and easy to come by. Thomas said it was about generational change, and raised a related issue. “There’s the whole issue about social welfare, paying for retirees and health care; we’re seeing that pressure will build as society and family structures are changing,” he said. “That’s creating tensions, and does insurance have a role to help with some of that, whether it’s government sponsored or private savings or health insurance over time? We’ll see, but it’s going to be a big pressure point.”
Marsh Hong Kong chief executive David Jacob pointed out that the “increasing cost of employee benefits and wages, especially for those who have operations in mainland China” was a looming issue.
Asia Willis regional chief executive Adam Garrard recently told StrategicRISK that his biggest challenge was finding, developing and retaining the right talent. “What we expect our advocates to do is to be able to have a business conversation with the client, talk about the macroeconomic environment, talk about the microenvironment for that client, talk about the competitive landscape – and to do that they need to concentrate on one or two industry groups,” he said. “The client advocate’s fundamental job is to understand the client and their needs to then call upon the right Willis resource to provide the solution for that client. We do not necessarily expect our advocates to then be able to go and broker every piece of insurance that they talked about, or to be able to provide the analytics, or provide the engineering work or whatever it is; those are specialist roles.
“It is in these two areas – advocacy coupled with industry sector knowledge and specialist roles within risk and insurance – where we continue to develop and search for talent.”
Willis’s head of large accounts in Hong Kong, Phil Timms, said: “Hong Kong is almost a full employment market and competition for talent is intense. The retention and attraction of talent is a key issue and the ageing demographics make this a critical issue for industries and service sectors.”
More articles, discussions and interviews will be available in StrategicRISK’s upcoming Asia Risk Report on Hong Kong. This will join a series of country-focused risk reports and culminate in a pan-Asia risk sentiment study. Click here to visit our Asia Risk Report hub.