Extension of the Retirement Age in Hong Kong
Hong Kong is facing a dilemma – its population is aging. The aging population is expected to have a negative impact on Hong Kong’s economy, community and labor force. If the labor force will continue to decrease relative to overall population, there will be a slowdown in Hong Kong’s economic development and government revenue will be reduced. The government will also be forced to allot more expenditure on security assistance, welfare and health care services.
One of the adverse impacts of the aging population is the increase in social security payments. As the population ages, the society will need to allot more resources for the caring of its elderly. As a result, fewer resources can be devoted to productive investment or to the younger generations. This can lead to long-term economic stagnation and decreased competitiveness against other economies with younger populations.
There are no existing mandate regarding the retirement age in Hong Kong at present. Individual employers or companies can set the appropriate retirement age for their employees which may form part of the employment terms agreed between the two parties.
Because of the increasing concerns about the economic and labor force impact of the aging population, the Hong Kong government has taken steps towards the creation of suitable regulations and programs especially in the area of retirement arrangement. The Central Policy Unit was appointed to conduct a study of different retirement policies in selected countries and assess their applicability to Hong Kong.
Training and Development in Hong Kong’s SMEs
The labor market in Hong Kong is consist of two labor markets – primary and secondary (Ng and Wright 2002). Large private firms and the civil service constitute the primary sector while small and medium enterprises (SMEs) constitute the secondary sector. According to Ng and Wright (2002), the HR practices in the small and medium enterprises, particularly training and development was less structured, and less formalized. The training and development programs of SMEs were limited.
SMEs in Hong Kong today has gained importance. SMEs are considered as the backbone of the economy of Hong Kong. SMEs are considered as the driving force of economic development. The process of economic restructuring is greatly influenced by the SMEs. SMEs comprise over 98 percent of business establishments in Hong Kong. SMEs are currently employing about half of the working population if private sector.
Training and development are planned learning experiences that teach employees how to perform their current and future jobs. Training focuses on present jobs, whereas development prepares employees for possible future jobs. Training and development is small and medium enterprises are neglected.
The Hong Kong government aims to encourage the proliferation of SMEs. Numerous schemes and programs have been introduced by the government in order to encourage and support SMEs. One such program is the SME training fund. The SME training fund aims to provide training grant to SMEs in Hong Kong to provide training relevant to their business operations. The program’s goal is to enhance the human resources practices and activities in SMEs and to increase SMEs’ competitiveness and capabilities.
Training and Development in Hong Kong Service Industry
The government of Hong Kong has established the Vocational Training Council in accordance with the Vocational Training Council Ordinance. The Council was established in order to promote cost-effective and comprehensive system of vocational education and training.
The Vocational Training Council was established in 1982. The council is responsible for identifying manpower and training needs and providing training in industrial, technical, and management skills to the Hong Kong workforce.
Hong Kong focused on developing value-adding producer services that supported the production of goods and services by others, as opposed to consumption services. During the 1990s, Hong Kong was still experiencing skills shortage. Many sectors, including the service sector began to provide more internal training.
On a macro level, the government set up the Employee Retraining Board to deal with the mismatch of skills between industrial workers and service jobs. As the business situation became more complex, with globalization, rapid environmental changes, and increased competition, a closer partnership between HR and firm strategy became more accepted. The Hong Kong economy is more service-oriented and HR practices such as training and development has become more sophisticated in order to satisfy the needs of a service economy.
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