Hong Kong and Singapore still attractive to expats despite exodus

Asia's Tech News Daily

Hong Kong and Singapore still attractive to expats despite exodus
Singapore is transitioning to living with Covid-19. Photo: Bloomberg

Even as an exodus of Hong Kong‘s expat community continues, driven in part by the harsh Covid-19 quarantine rules and also political concerns, French national Marc says he is staying put.

The 21-day isolation period which he served in January after returning from France was a “burden”, he said, but Hong Kong remained attractive. He moved to the city three years ago as it was multicultural and hyper-connected with the world, he said, and that has not changed.

“I love Hong Kong. I can see myself staying here for a few more years,” said Marc, who wished to be known only by his first name due to the sensitive nature of the topic. “My view is that the pandemic is not here to last, so I can live with it.”

Marc, though, is taking the long-term view. In contrast, those involved in executive hiring say skilled workers have grown increasingly weary of continued, harsh Covid-19 restrictions in Hong Kong and Singapore, as compared to the West, where there are virtually no curbs. Paired with a perceived rise in xenophobia in the Asian hubs, these workers have left for what they see as greener pastures.

Hong Kong’s population has been shrinking at a record rate, according to government data, with the city losing 89,000 residents in the year ending June. Singapore, meanwhile, reported a 10.7 per cent dip in its non-resident population over the same period, or about 175,000 people.

As workers now consider new pandemic-related priorities when selecting their work base, Asia could lose its shine in the short term, some analysts say. This could mean a disruption in the region’s access to highly sought-after global talent, like those who work with data, artificial intelligence, cybersecurity and software development.

The silver lining is that this pain is likely temporary. Bruno Lanvin, distinguished fellow at the Insead business school, described strict social distancing and border closures as “cyclical elements” that would not be permanent.

Ultimately, cities like Hong Kong and Singapore have strong pull factors, including world-class health care, quality education and infrastructure that supports digital connectivity. Those factors, alongside governments that are business-friendly, allow them to continually draw a steady stream of international workers, analysts say.

Hong Kong and Singapore still attractive to expats despite exodus
© Provided by South China Morning Post Office workers walk past the Exchange Square complex in Central. Photo: SCMP / Sam Tsang

Ivan Tan, principal consultant of rewards and general mobility at Mercer, said these “quality of living” factors mean places like Singapore “will continue to be an attractive place despite all the anxieties, challenges and frustrations”.

International rankings reflect this. Even though Singapore this year slipped in the World Competitiveness Ranking compiled by Switzerland’s Institute for Management Development, tumbling to fifth place from the top spot that it held for two successive years, it remained the highest ranked Asian economy.

A separate Global City Talent Competitiveness Index, published on Tuesday by Insead and the US-based Portulans Institute, ranked Singapore as the seventh and Hong Kong as the 20th most talent-competitive cities. They were the only two Asian cities to make the top 20, with the index led by San Francisco in the United States, Geneva in Switzerland and the US city of Boston.

Lanvin, a co-editor of the report, said he “would not be surprised” to see more Asian cities in the top 20 next year because he expected the Asia-Pacific region to be the “global driver for growth” in the next few years.

Tokyo, Taipei, Seoul, as well as China’s Beijing, Nanjing and Shanghai were “big contenders”, he added.

But meanwhile, the “cyclical elements” still bite. Those, Lanvin said, are “critically important now because we’re not out of the pandemic yet”.

Short-term pains

Singapore and Hong Kong have long been touted as magnets for skilled labour, but recent developments, such as the governments’ handling of the pandemic, have raised concerns that their status may be threatened.

Referring to the cities’ relatively strict border curbs compared to the West, Tan from Mercer suggested that workers could view the environments in the Asian cities as “challenging”. The uncertainty and unpredictability have caused anxiety among the foreign workforce population, he said.

Jurisdictions in the Asia-Pacific were largely successful in keeping the virus at bay during the initial phases of the pandemic, helped by border closures. This strategy paid off when the world was bent on stamping out the virus, resulting in zero-Covid places like New Zealand topping Bloomberg’s Covid-19 resilience ranking last November.

But global sentiments have shifted as Europe and North America open up and start to treat the virus as a minor illness. As zero-Covid strategies fall out of fashion, New Zealand has tumbled 37 spots down the same ranking. Now, the index favours countries that handle the virus “most effectively with the least social and economic upheaval”.

Many nations in the region have been sticking with strict restrictions and struggling to transition to living with Covid-19. This includes Hong Kong, whose leader Carrie Lam earlier this month defended travel curbs, signalling that the city’s restrictions would stay in place for the foreseeable future.

Taimur Baig, chief economist at DBS Bank, warned that if pandemic-related travel curbs were to be extended for another year or two, it would be “conceivable” that some Western professionals would return home.

Already, some damage has been done. Official figures indicate that Singapore’s foreign worker community is shrinking. The city state’s skilled foreign workforce – not including domestic workers and work-permit holders in the construction, marine and process sectors – fell from about 796,000 in December 2019 to 647,000 in June this year.

In Hong Kong, reports suggest the expat community is increasingly frustrated over the city’s harsh quarantine rules. A controversial national security law imposed by Beijing last year, viewed as eroding freedoms, has also driven some professionals and firms away.

Singapore initially stuck to a similar strategy, but has in recent months pivoted to treating the virus as endemic after achieving high vaccination rates. On Tuesday, it launched quarantine-free travel arrangements for vaccinated individuals with countries including the US and Britain.

The move to progressively resume international travel was largely lauded, but some workers still have not been able to visit home.

Rahul, a data scientist who has been working in Singapore since 2017, has not visited his family in western India for more than two years. According to the city state’s foreign ministry, international airline operations between India and Singapore remain suspended.

“This has been a particular concern,” said Rahul, who asked to be identified under a pseudonym. The rules meant he would have to skip important family events, such as his sister-in-law and his cousin’s weddings. “If this continues, foreigners would definitely want to move out because you cannot be separated from your family forever.”

But even as Singapore and Hong Kong experience their share of labour challenges during the pandemic, Baig, the economist, said their stringent measures would be viewed in conjunction with their low death and hospitalisation rates.

“No jurisdiction has consistently outperformed the rest of the world through the pandemic, as seen in sharp gyrations in the pandemic resiliency indices,” he said. “No single economy will therefore come across as a clear outperformer and be construed as a preferred destination.”

The war for talent

Apart from border curbs, analysts and human resource experts say the pandemic has surfaced new priorities among jobseekers that could change the fight for and flow of skilled talent in the post-pandemic era.

Samir Bedi, EY’s Asean Workforce Advisory Leader, said beyond looking for cities that are great to live, work and play in, health and safety will be “paramount concerns” for jobseekers and their families.

Cities will be assessed according to how effective their health care systems have been during the outbreaks and the success of the respective governments in getting their economies back on track, he said.

The availability of medical facilities, the overall city infrastructure, and other factors such as crime rates and the education system would also likely be weighed, said Julia Radchenko, Mercer’s regional global mobility lead for Asia Pacific.

Tan, the principal consultant at Mercer, noted the rise in remote working spurred by the pandemic had resulted in companies exploring hiring outside of the physical office. This could impact employers in Singapore and Hong Kong as they face growing competition for talent from organisations worldwide.

“Looking ahead, the post Covid-19 workforce will be virtual and hybrid. To meet the needs of the digital workforce, cities need to continue investing in their digital infrastructure and connectivity, including accelerating 5G roll-outs,” Bedi said.

Mikal Skuterud, an associate professor of economics at the University of Waterloo, said when it came to top-tier talent, what had been driving migration flow was salaries. Citing Canada as an example, he said the country had struggled to attract and retain top talent in the ICT sector because employers could not compete with the after-tax salaries offered in other countries, such as the US.

While Canada can compete at the lower end of the income distribution and offers a relatively generous social welfare system, including good public health care and education, those factors do not necessarily help attract top talent.

Hong Kong and Singapore still attractive to expats despite exodus
© Provided by South China Morning Post A record-high number of US workers are leaving their jobs. Photo: EPA-EFE

In the US, record-high numbers of workers leaving their jobs – about 4.3 million of them quit in August – have prompted firms to look for new ways to poach talent. For instance, PwC said it would allow all its 40,000 employees in the US to work virtually from anywhere while other banks have said they would pay more.

Rahul, the Singapore-based data scientist, said he had noticed that firms in Europe and the US were now tempting tech workers with higher pay cheques compared to a few years back. He had moved to the city state for its booming tech sector as well as the high salaries and considerably low taxes, but now it appeared the West was offering similar opportunities and pay, he said.

According to Rahul, there are also clearer pathways for foreigners to obtain residency in European countries.

“In other countries, there is a clearer system, so at least there is some kind of clarity that I can expect after a certain number of years,” he said. “It is not so clear in Singapore – it’s quite a black hole.”

Baig from DBS suggested that cities like Dubai and Bangkok had slowly been shaping up to be the next hubs for foreign skilled talent. The former has a favourable tax policy and connectivity, while the latter has been attractive to both professionals and long-term visitors. But he said they were not likely to “seriously challenge” Hong Kong and Singapore’s status.

The two metropolises still have their allure. Their low taxes, efficient infrastructure, ease of international travel and exposure to Asia have motivated high-skilled talent to look for opportunities there, Baig said. “These factors are unlikely to diminish even if wages were to rise in the West, and therefore will continue to act as a pull factor to remain in these cities.”

Erman Tan, president of the Singapore Human Resource Institute, was confident that Asia would remain a favourable region for foreign talent as it boasts emerging markets. After all, he said, professionals often flock to Asian cities, including Hong Kong, Singapore, Shanghai and Tokyo, to complete their “global job experience”.

For Hong Kong and Singapore, their accessible world-class health care system often stands them apart.

“The pandemic was a test of the overall public health system to see which one can go through this stress test. Singapore and Hong Kong have proven themselves that they have a robust system,” Tan said.

Insead’s Lanvin even found the Singapore government’s use of vaccinated travel lanes to reopen borders “imaginative”.

Hong Kong and Singapore still attractive to expats despite exodus
© Provided by South China Morning Post Singapore PM Lee Hsien Loong. Photo: dpa

Rising nativism

As countries look to attract the best minds from around the world, the pandemic meanwhile has brought to the fore a related issue: rising nativism and protectionism.

With economies still reeling from the pandemic, job losses and unemployment rates have inevitably risen, resulting in locals feeling increasingly insecure about their jobs.

Insead’s Lanvin said the danger was that a growing part of the population in many economies may feel disenfranchised. “They may feel that their qualifications are in less demand, their role in society is being depreciated, and this may not only create growing inequalities, but also growing social tensions,” he said.

In Singapore, for example, the pandemic has stirred up negative sentiments and hostility towards foreigners. When the more transmissible Covid-19 Delta variant was detected in Singapore, some residents called for stricter border measures. There was also a reported increase in xenophobic and racist incidents.

Adding to the mix were controversies over the country’s free-trade agreement with India – the India-Singapore Comprehensive Economic Cooperation Agreement (Ceca) – that was first signed in 2005. Some have alleged the agreement lets in a free flow of Indian workers and has disadvantaged the local workforce, and the view persists despite multiple clarifications by authorities that Indians who enter under Ceca are subject to regular work-pass requirements.

Prime Minister Lee Hsien Loong in August acknowledged a “growing restlessness” over foreigners, noting that more Singaporeans were feeling the pressures of the pandemic.

In his annual policy address, he sought to address public concerns that locals were losing their jobs to foreign workers, citing the different measures that the government had put in place, including progressively raising the qualifying salary for foreigners. Foreign workers, he said, complemented the country’s workforce and helped grow the economy.

“We must not turn our backs on (foreigners) and give the impression that Singapore is becoming xenophobic and hostile to foreigners,” he said. “It would gravely damage our reputation as an international hub. It would cost us investments, jobs and opportunities. It would be disastrous for us.”

Elisa Mallis, the Asia Pacific managing director of leadership development firm Center for Creative Leadership, agreed with Lee. She said a diverse and global workforce was necessary for open economies like Singapore to bounce back from the pandemic.

Firms in Singapore are already finding it harder to hire locals for some roles, according to a report by the American Chamber of Commerce in Singapore. The survey, published earlier this month and which took into account responses from 95 senior executives, found that a lack of “necessary specialised skills” and relevant experience are the biggest obstacles preventing firms from hiring local workers for senior-level roles. Among mid- to senior-level talent, firms also find it hard to recruit Singapore professionals with creativity and critical-thinking skills.

Lanvin’s solution to combating nativism was to upskill local populations and encourage lifelong learning so citizens are equipped to take on the jobs needed in the knowledge economy and would feel less disenfranchised.

“The keywords are upskilling and reskilling,” he said. “It’s not just governments, it is also employers, public and private, that will have a critical role to play to ensure that their own workforce has the possibility to learn the new skills needed in a post-Covid environment.”

This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.

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