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Hong Kong — Hong Kong’s zero-Covid policy is driving foreign talent out of the financial hub and putting off newcomers even as some firms offer pay packages not seen since the lavish days before the collapse of Lehman Brothers.
While the new Omicron variant has renewed anxiety around the world, leading some countries to tighten travel curbs, Hong Kong and mainland China remain among the few places sticking to a zero-tolerance policy on any coronavirus infections.
Once considered one of the most attractive cities for global talent, Hong Kong is now being shunned by many top professionals as people try to avoid or escape draconian quarantine rules.
International business lobby groups have repeatedly warned that the city could lose talent and investment due to its travel restrictions, which can involve up to three weeks in mandatory quarantine. Now recruiters and relocation firms say an outflow of talent is well under way.
Lars Kuepper, MD of relocation company ReloSmart, said his firm saw a five-fold increase in inquires for shipments abroad since the pandemic began and a 14-fold drop in traffic the other way.
“The major factor definitely is the pandemic and the effect of the restrictions on entering Hong Kong,” Kuepper said.
The government says the restrictions are needed to protect the community from the virus and to partially reopen the border with mainland China, which is Hong Kong's main source of economic growth. China is also largely isolating itself from the rest of the world.
A government spokesperson said the zero-infections goal was premised on the “overall interest of the Hong Kong community” and that most residents looked forward to the mainland border reopening.
“Hong Kong remains a competitive city globally and a major regional base for international companies despite current challenges related to the global pandemic,” he said.
Many non-residents are now not allowed into Hong Kong, while residents returning to the city have to undergo two to three weeks of hotel quarantine at their own cost.
Patient discharge rules require an extra two weeks in a designated hospital for anyone cured of the infection, which could result in people isolating for more than a month in either hotels or hospitals regardless of their symptoms.
Those prospects are so unappealing, that another relocation company, Regal World Transport System, said some clients had unusually reached out from overseas to move their belongings out of the city. They refused to return to Hong Kong after taking trips initially meant to be for family visits.
Jobs to relocate people out of Hong Kong had increased by 30%-40% over the past 18 months, said GM Francis Cheung.
“The whole process was done on email or WhatsApp. They did not show up in person,” he said.
While a boon for relocators, the restrictions are giving recruiters headaches.
Recruiting firm Ambition said that while it had seen a 70% increase in mandates from Hong Kong-based employers over the past year, there had been a smaller 50% rise in hiring volume, underscoring the difficulty of convincing talent to relocate to Hong Kong.
“We have an outflow of talent at the moment,” said Chris Aukland, Ambition’s regional MD for Asia, adding he expected it to continue “unless there are changes to the travel and quarantine restrictions in place”.
Phaidon International, another recruiting firm, saw a 40%-50% surge in mandates this year, but a 10% drop in the number of people it has managed to bring in from overseas.
Jamie Thorpe, Phaidon’s head of Hong Kong, says some financial firms “desperate to hire” have sweetened their offers with buyouts, guaranteed bonuses, hefty living allowances and inflated job titles ensuring higher base salaries.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.