Survey: 73% of HK companies plan to cut entry-level hiring due to AI

Hong Kong is shifting towards strategic oversight, AI system management, and creative problem-solving, with nearly all companies adopting AI and 48% undergoing major workforce restructuring to integrate it, the survey finds.

Commissioned by human resources management platform Deel and conducted by International Data Corporation (IDC), the survey was conducted in September among 5,500 business leaders from various markets worldwide, including Hong Kong.

In Hong Kong, 99% of surveyed companies reported having adopted AI, with 85% experiencing job changes or adjustments. Furthermore, 48% of companies have undergone major workforce restructuring to integrate AI, the highest percentage among all surveyed markets.

Under the trend of job changes and adjustments, employees face multiple challenges, including a decline in the number of certain positions. 85% of companies report that AI is leading to changes or even the disappearance of job functions. Additionally, 73% expect to reduce entry-level hiring over the next three years, while 70% indicate that development opportunities for entry-level employees are decreasing. 

Furthermore, 74% of companies state that learning pathways for entry-level positions are shrinking, making it increasingly difficult to hire and train future leaders.

The report also highlights a declining importance of degrees, with a stronger emphasis on applied skills. Only 5% of respondents consider a degree a necessary requirement for entry-level positions. The three core competencies most valued by companies are relevant technical certifications in AI tools or programming (62%), problem-solving and critical thinking skills (57%), and previous work experience and case studies (56%). This indicates that in the era of AI, employees must enhance their skills to avoid obsolescence.

Hong Kong companies face significant challenges in implementing AI technology, with 55% citing difficulty integrating AI into existing systems as their top concern—higher than the global average of 48%. Additionally, 43% lack internal AI expertise or skills, second only to Singapore (67%). Furthermore, 42% struggle with insufficient budgets or investments for their AI initiatives.

To attract talent, Hong Kong employers are offering generous salaries and unique incentives: 63% are willing to pay AI specialists up to 25% more than similar technical positions, 23% are prepared to offer salaries that are 25% to 50% higher, and 14% are ready to pay 50% or more above market rates.

Despite this, Hong Kong companies are actively promoting team retraining, with 67% of surveyed organisations investing in AI training programmes, ranking third in Asia, behind Singapore (74%) and Japan (68%), and aligning with the global average. However, companies face various challenges in implementation. 58% of companies report low employee willingness to participate in training. 50% indicate budget constraints. 41% find it difficult to locate experienced training experts.

Globally, New Zealand (53%), Argentina (53%), and US (50%) experience the highest rates of job displacement due to AI. In contrast, only 11% of companies in mainland China have faced job displacement, the lowest percentage among all surveyed markets.

Mainland China leads in redesigning job roles due to AI integration, with 79% of companies reporting such changes. This indicates that companies are effectively retraining their relatively young workforce to seize the opportunities presented by the AI revolution.

MARKETING-INTERACTIVE has reached out to Deel for more information. 

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