Catching a Cold: The Volatility of Optimism in HK and Asia

As the old saying goes, when America sneezes, Asia catches a cold. According to annual surveys of business leaders produced by Grant Thornton, Hong Kong in particular displayed the world’s most dramatic swing from optimism to pessimism as the US sub-prime crisis hit from 2008 to 2009. By early 2010, this trend was reversed by the most striking swing back to optimism. Regionally, the likes of Singapore, Vietnam and Mainland China have followed Hong Kong back to optimism, though not so dramatically.

On the surface, with regards to recruitment, this would seem to reveal a permanent shift back to normality. In late 2008, economic uncertainty instilled a highly cautious approach to expenditure, with hiring freezes commonplace, and few opportunities beyond experienced multilingual hires with existing networks and proven track records for revenue generation. Seeing improvements in general economic conditions, however, businesses across all sectors appear to be returning to a positive stance on hiring sooner than their counterparts overseas.

‘Unfortunately, Grant Thornton’s survey results reveal something fundamental to Hong Kong’s (and Asia’s) business psyche; a propensity for excessive fretting over global economic shocks, which generates concerns that ongoing volatility could negatively impact business confidence – and with it, attitudes to recruitment – at any moment. However, now that the global economy is stabilising and credit conditions are easing, confidence is high and recruitment levels are back up to levels seen in 2007’ said Andrew Skinner, Managing Director of ALS International.

In the legal field, a resurgence in M&A and ISDA activity has led to increased opportunities. Rampant IPO activity also shows no signs of abating, with Ernst & Young recently predicting that a record HK$370 billion will be raised on the Hong Kong Stock Exchange during 2010. In financial services, hiring is focused in prime brokerage, investment banking coverage, origination and fund management, particularly long/short equity and traditional mutual funds. ALS International’s professional services clients also appear increasingly interested in expanding their legal capabilities by hiring at all levels.