Human Resources Hong Kong sits down for an exclusive chat with Lee Quane, regional director for Asia at ECA International, to identify the challenges confronting HR due to the pandemic. Robert Blain reports.
How do you see employee/expat travel panning out in 2021 and beyond?
There’s three key points to this. The first one is with respect to employee business travel. I don’t think we’ll see it return to pre-pandemic levels. I think what’s happened is that the pandemic has acted as the great disruptor. And what it’s done is that it’s increased people’s familiarity with home working using Zoom and collaboration tools and so on. People will continue to work across borders without the need to travel.
The second thing is that we are going to see greater agility required from HR staff. We’ve already seen significant changes with regard to immigration and healthcare. So especially with regard to Covid testing and quarantine, it’s going to take a lot more planning for the people managing the travel. So HR will have to be a lot more up to date with news and what’s going on so that employees aren’t trapped waiting for a plane, or trapped in quarantine.
Finally, for mobility to return to something like pre-pandemic levels it’s going to depend very much on finding a vaccine.
How do you see expat salary/benefits packages being affected by the Covid pandemic?
We did a survey of about 350 financial companies and asked them how they’ve responded to the pandemic – and fewer than 10% have actually adjusted salaries. So I don’t think there’s been an adverse impact on salaries or even the benefits components of people’s salaries. What we’ve seen is companies taking measures to improve the safety for staff and that’s been their focus.
One other thing to bear in mind is that economic downturn normally leads to companies reviewing their policies. As they are in cost-cutting mode they are likely to review compensation or benefits to save money.
That definitely happened during the financial crisis where there was a reduction in the generosity of packages but this is not going to be possible in 2020 because the changes companies made in 2008-9 means that C&B packages are much leaner so there’s not much scope for movement.
In particular, how do you see expat benefits being impacted in Hong Kong?
With regards to Hong Kong’s economic recovery, we don’t just have the issue of the pandemic but there’s also the ongoing social-political tension. So the situation that Hong Kong hasn’t been in effect since January but has been in effect since June last of year. It remains to be seen if the dual impact of this reduces the attractiveness of Hong Kong, which in turn results in companies having to offer higher salaries in order to encourage people to relocate here.
Between 2009 and 2019 packages were becoming less generous because Hong Kong was considered an attractive location in an attractive region. But this has changed since obviously changed since 2019 and people may be less willing to relocate to Hong Kong than they were two years ago. So other locations may become more attractive, particularly somewhere like Singapore.
How do you see employee mobility in mainland China being impacted by the pandemic?
With regards to China, because it bounced back so much more quickly and strongly in comparison to anywhere else, it’s a location where most people are expecting significant economic growth in 2020. We may actually see companies putting their eggs in the China basket.
What will be the single biggest change to employee mobility in 2021?
It’s going to be managing employees in different situations. With international and even regional companies that operate in Hong Kong, Singapore, China, Australia, etc, you’re going to be facing significant variations in terms of their living situation.
For example, you probably got expatriate employees stuck in places like Hong Kong and Australia who are unable to travel because of restrictions. For example in Australia people are prohibited from leaving – whereas in China they’ve got much more freedom to travel.
There’s also going to be an increase in regulations. So it’s going to take longer to process work permits. For example here in Hong Kong because of the recent work-from-home requirements for government departments, it’s taking longer to process work permits.
You’ve also got relocation becoming more difficult with quarantine requirements and people unable to travel directly from one country to another and issues around transiting.
So the biggest challenge around mobility is that everything is going to be that much more difficult and that much slower.
So the whole concept of travel is going to require increased levels of pragmatism on behalf of HR managers. They will need the ability to think on their feet and be agile in how they manage the workforce.