Hong Kong is going through a difficult period of labor shortage, particularly in frontline industries like retail, food and beverage (F&B), logistics, and hospitality. Since recovering from covid-19, there has been a sharp increase in the demand for workers, but the supply is falling behind, creating an excess demand hence a shortage of labor.
According to Moovup, a local recruitment platform, job posts for the retail and F&B industries increased by 188 per cent and 198 per cent respectively from April 2022 to April this year. Between mid-January and mid-April in 2023, job posts for these two industries increased by 23 per cent and 16 per cent respectively. One of the reasons could be HK's shrinking population, Hong Kong lost 94,000 workers in 2022 alone, representing 2.4 per cent of the working population, according to government figures.
Why are these industries failing to recruit workers?
1. Demographic Changes
One of the reasons could be HK's shrinking population, Hong Kong lost 94,000 workers in 2022 alone, representing 2.4 per cent of the working population, according to government figures. The population is also an aging one, with a declining birth rate and a longer life expectancy. This demographic shift has resulted in a smaller pool of working-age individuals, leading to labor shortages across various industries, including the F&B sector.
2. High cost of living
Hong Kong is known for having one of the highest housing costs globally. The limited land supply and high demand for housing contribute to soaring property prices and rental rates. This makes it challenging for individuals, particularly those with lower incomes, to afford suitable accommodation in the city. The high cost of housing can significantly impact a person's disposable income, making it more difficult to make ends meet, save money, or consider jobs with lower wages, such as frontline jobs.
3. Change in Workforce Aspirations
Younger generations may have different career aspirations and preferences compared to previous generations. Factors such as globalization, technological advancements, and evolving societal values can influence their career choices. Many young individuals may prioritize office-based jobs, professional careers, or positions in emerging industries such as technology or finance. These sectors often offer perceived higher salaries, career advancement opportunities, and a more prestigious image. As a result, there may be a reduced interest in pursuing jobs in F&B, retail and other hospitality industries.
4. Long working hours
Frontline jobs in these industries are known for its demanding working hours, which often include evenings, weekends, and public holidays. This can create challenges for individuals seeking work-life balance or those with family or personal commitments. The nature of the industry requires employees to be available during peak hours when customers frequent restaurants, bars, and shopping malls, leading to irregular schedules and potentially exhausting work conditions. The demanding nature of the work can make it less appealing for individuals, especially those seeking stability or a better work-life balance.
5. Low Wages
In some cases, wages in the F&B industry may be relatively low, particularly for entry-level positions or roles that do not require specialized skills or experience. Hong Kong's high cost of living, including housing, transportation, and other expenses, can make it difficult for workers to meet their financial needs on these wages. This can discourage individuals from pursuing or staying in F&B jobs, especially if they have alternative employment options that offer better compensation.
Can the digitalization of F&B and retail industries be a solution?
Employers are aware of the underlying causes behind a shortage of workers and are actively pursuing solutions. However, this has been met with little to no success. Based on Moovup figures, the median starting full-time monthly salary in frontline industries has increased by 14.3 percent from January 2022 to HK$16,000 in April this year. Businesses in HK need to explore other solutions. One of these could be investments in self service kiosks and QR code ordering to reduce the need for frontline workers in the F&B industry.
Self Service Kiosks/QR code ordering
Businesses can reduce their reliance on frontline staff for order taking and payment processing through these two technologies. This can help alleviate the pressure of finding and hiring additional employees during times of labor shortage. Existing staff can then be reallocated to other crucial tasks such as food preparation, ensuring smooth operations despite reduced staffing levels. As self service kiosk/QR code ordering allows customers to input their orders directly, it reduces the chances of miscommunication or errors that can occur when orders are taken verbally. Accurate order placement can lead to higher customer satisfaction and minimize instances of order rework.
Both of these potential solutions achieve a similar purpose, in that they allow customers to place their orders directly, reducing the need for additional staff to take orders manually. With self-service options, customers can browse the menu, select their items, customize their orders, and make payments independently. This streamlines the ordering process, minimizes wait times, and increases overall operational efficiency.
While self-service kiosks and QR codes can help mitigate the impact of labor shortages, it's important to note that they may not completely replace the need for human staff. The F&B industry often relies on personalized customer service and the human touch, which cannot be replicated by technology alone. Therefore, a balanced approach that combines self-service options with a sufficient number of staff members is usually the most effective strategy.
However, it's been established that industries like F&B and retail have a hard time acquiring a sufficient number of workers, due to factors like poor working conditions and long working hours. In light of this, what other solutions can these industries turn to?
Efficient and fair rostering with HRMS
The rostering function in HRMS allows businesses to create, manage, and transfer employee schedules, making it easier to manage changes in employee availability or unexpected absences. During periods of worker shortage, this can be especially valuable, as it allows businesses to quickly adjust schedules and ensure that staffing needs are met. Additionally, HRMS can help businesses streamline HR processes, reduce the risk of errors, and improve payroll accuracy, freeing up resources to focus on other critical areas of their operations.
1. Efficient Staff Scheduling
HRMS with rostering functions enables businesses to optimize staff scheduling based on factors such as projected demand, employee availability, and labor regulations. By automating the scheduling process, businesses can ensure that shifts are assigned in a fair and efficient manner, taking into account employee preferences, availability, and legal requirements. Using HRMS, managers can easily check each employee’s leave balance, such as annual leave, rest day balance(employees are required one rest day for seven days of work according to HK labour laws), public holiday balance, and time off balance(OT compensation). Managers can use this data to assign rest days to employees, which helps distribute working hours more evenly, reducing the burden of long shifts on individual employees.
2. Transparency and Flexibility
HRMS with rostering functions provide transparency by allowing employees to view their schedules in advance. Employees can access their schedules online, receive notifications of any changes, and have visibility into upcoming shifts. This transparency promotes better communication between management and staff, enabling employees to plan accordingly. Additionally, some HRMS platforms may offer self-service features that allow employees to request shift swaps or time-off directly through the system, providing a level of flexibility to accommodate their individual needs.
3. Compliance with Labor Regulations
HRMS can help businesses ensure compliance with labor regulations, including maximum working hours, rest breaks, and overtime policies. The system can automatically track and calculate employee work hours, ensuring that schedules adhere to legal requirements like the 418 rule in the HK labour law. This reduces the risk of violations and helps businesses avoid potential legal issues related to working time regulations.
In conclusion, the labor shortage in the F&B and retail industries in Hong Kong necessitates proactive measures to address the underlying factors and create a more appealing work environment. By embracing technological advancements through a combination of installing self-service kiosks/QR code ordering, and leveraging HRMS for efficient staff scheduling, businesses can alleviate the burden on employees, promote work-life balance, and enhance operational efficiency. Striking a balance between technology and human touch is crucial, as it is the personalized customer service and human interactions that truly set these industries apart. With thoughtful implementation of innovative solutions and a focus on employee well-being, the F&B and retail sectors can overcome the labor shortage challenge and foster a thriving industry for both businesses and employees.