Local talents threatened as 53% of HK companies intend to hire foreign staff

And worse, 31% of companies do not plan to hire more in the next two years.

According to Regus' latest global Business Confidence Index, Hong Kong business sentiment remains high, and companies are still taking on staff, even though the global outlook is less positive than six months ago. Over two-thirds of Hong Kong companies (69 per cent) surveyed reported that they plan to increase headcount in the next two years, compared to 64 per cent globally. This is despite a downturn in the overall global Business Confidence Index, in which Hong Kong has slipped one point since the previous survey in April 2011.

The erosion of confidence in other countries in the region has been more marked: China has slipped 27 points from 155 to 128, Singapore is down 29 points from 146 to 117, and the global average has slipped 11 points from 125 to 114 over the last six months. As an indicator of the changing structure of employment, hiring organisations show a preference for taking on freelancers and graduates, as firms seek competitive advantage now and growth in the months ahead.

This latest edition of the Regus Business Confidence Index is based on the opinions of decision-makers in more than 12,000 companies across 80 countries, including over 100 in Hong Kong.

Some of the other findings worthy of note were:

· Over 22 per cent of Hong Kong companies have pushed back their expectations for full economic recovery to the second half of 2012, compared to 32 per cent in China, 28 per cent in Singapore and 36 per cent globally;

· The proportion of Hong Kong companies reporting revenue growth (72 per cent) shows no change compared with six months ago. A smaller proportion of mainland companies – 64 per cent – reported revenue growth, a drop of eight percentage points since April;

· The percentage of Hong Kong companies reporting higher profits (60 per cent) has fallen seven percentage points over the last six months. Companies trading internationally showed a higher level of confidence on the Index (with 140 points) than those trading mainly in domestic markets (with 128 points);

· Despite the less positive outlook overall, 69 per cent of companies in Hong Kong plan to hire more employees over the next two years, compared to 66 per cent in China, 68 per cent in Singapore and 64 per cent globally. Chinese companies predominantly plan to hire fresh graduates (61 per cent), while Hong Kong businesses intend to hire foreign staff (53 per cent);

· Reflecting a move toward more flexible working practices, 44 per cent of Hong Kong companies surveyed say they plan to hire more freelance staff in 2011/12.

"Six months on from what looked like a rosy start to 2011, the latest Business Confidence Index records a much more cautious global outlook," said Filippo Sarti, Regus' Group Chief Operating Officer & CEO for Asia-Pacific.

"Globally, the proportion of companies reporting revenues and profit growth has declined and people now believe we will be waiting longer before the recovery starts to bite. Despite this, however, business sentiment in Hong Kong and China remains comparatively strong, and businesses continue to invest in their most valuable asset – people.

"In Hong Kong, where unemployment has fallen to a 13-year low,, businesses remain cautiously optimistic, in many cases opting for freelancers to increase headcount to remain flexible and rapidly scalable. In addition, by taking advantage of solutions already available, it is possible for even very small operations to establish a low-risk presence in their target markets without making lengthy premises or equipment commitments. This allows them to expand or scale down their operations in response to market conditions."