How to hire employees in Hong Kong
With a mixture of influences, international expansion into Hong Kong fuses many aspects of expanding into an Asian country with expansion into a European or North American country. Here we look at the key cultural elements to be aware of when onboarding staff and hiring in Hong Kong as well as other key business and compliance issues.
Guide for hiring in Hong Kong
The Hong Kong workplace
Businesses hiring in Hong Kong should be aware of a range of matters in relation to workplace culture. Many of these are similar to the considerations that would apply in China:
- Dress. While some workplaces are more relaxed than others, a good general rule is for men to wear dark suits and ties. Colourful or loud clothing should be avoided, at least initially until an individual understands that workplace better;
- The concept of ‘Face’. As in all cultures with a significance Chinese cultural influence, the concept of ‘saving face’ is important. This means preserving the honor and respect of an individual’s community and family. In practical terms, this means that it is inappropriate to lose control of one’s emotions at work and to give employees a ‘dressing down’ in front of others;
- Working hours. Working hours in Hong Kong have historically been longer than in mainland China and many other countries, with 50 hours a week being relatively common. However, this is changing as more employees in Hong Kong come to value work-life balance.
The job interview approach for hiring in Hong Kong is reasonably similar to the approach taken in China, with perhaps more of a ‘western’ flavor. Some aspects to keep in mind include:
- Greetings. A handshake is customary when meeting someone for an interview to initiate the prospective process of hiring in Hong Kong;
- Introductions. As it is a relatively hierarchical society, when carrying out introductions in Hong Kong it is common for the interviewers to state their job title;
- Questions. These may be a mixture of role-based questions and personal questions. While many companies in Hong Kong operate in English, multi-lingual job candidates might be asked questions in English, Cantonese or Mandarin. Candidates should be prepared to ask some questions themselves;
- Punctuality. For interviews this is essential. Interviewers should be prepared for interviewing candidates to arrive up to ten minutes early;
- Conclusion. When the interview is over, interviewers should inform candidates when they can expect a decision and both candidates and interviewers should shake hands. If possible, interviewers should attempt to contact candidates within a couple of weeks about the outcome of the interview to maintain professionalism for the entirety of the process when hiring in Hong Kong.
Recruiting talent in Hong Kong
Once the decision has been made to establish an international footprint in Hong Kong, it is essential for employers hiring in Hong Kong to correctly scope out how many employees they will need and in what positions. It is important to observe that Hong Kong has a highly-skilled talent base and a high cost-of-living so salary expectations can be relatively high. Engaging a Hong Kong-based expansion partner, can help guarantee that you get the right staff on the ground.
Market-competitive pay and benefits
As previously mentions, hiring in Hong Kong can be made complicated due to the fact that Hong Kong is one of the most expensive places in the world to live. Pay and benefits need to reflect this. Note that bonuses and significant benefit packages are common when hiring in Hong Kong.
Compliant employee onboarding in Hong Kong
It is worth emphasizing that Hong Kong has separate tax and business laws and regulations from mainland China. Key elements to be aware of include:
- Setting up a local entity. You will need to consider whether it is worth setting up a local entity (such as a company), oe whether a global Professional Employer Organization (global PEO) could better manage your staff on the ground;
- Income Tax. This is much lower in Hong Kong than in mainland China, with tax rates ranging from 2 percent to 17 percent, depending on income;
- Payment of taxes. Unlike in China, employees are responsible for paying their own income taxes and must submit a tax return to the Hong Kong Department of Inland Revenue;
- Compulsory reporting obligations. While Hong Kong employers don’t need to pay employee income tax, they do need to make regular reporting to the Inland Revenue Department covering such matters as commencement of employment, whether an individual is still employed, end of employment, and an employee being about to leave Hong Kong (these rules ensure that employees do not leave the region without having settled their tax bill);
- Compulsory contributions. Employers and employees are both required to make contributions to the Mandatory Provident Fund Scheme covering retirement;
Sickness, maternity leave etc. Under the Employment Ordinance that applies in Hong Kong, employers must make payments covering employee sickness, paternity and maternity leave. Sick leave could extend up to 120 days.