Ken Liu figured the odds of finding a job were slim to none. After all, 20,000 people were battling for 700 positions. Still, in January, Liu, 27, grabbed his résumé and headed for Hong Kong's first-ever job fair devoted to mainland-based businesses. Chinese electronics manufacturers, banks, insurance companies, golf courses--all were looking for Hong Kong brains. Liu applied for a job as a technical consultant for a Shanghai-based incubator called Summation X. In the end, the recruiter hired him over 79 other applicants. "I don't know why he chose me," says Liu. "The competition, in terms of technical skills, was so harsh."
Liu, laid off from a software firm last April, considers himself lucky. With Hong Kong's jobless rate at a record 6.7% (chart), China, with its robust 7% growth rate, beckons to more and more out-of-work Hong Kong professionals. Indeed, while many Hong Kong companies are imposing hiring freezes, more than half of 2,000 mainland-based businesses surveyed by American recruiting firm TMP Worldwide Inc. reported plans to boost head counts this year. And with China not yet producing sufficient numbers of experienced managers, Hong Kong is the obvious place to go headhunting. Besides, Liu and his ilk will work for half what they once earned.
It's a reversal of fortune. For decades, Hong Kong was a magnet for mainlanders in search of a better life. But today, economic migrants are flocking north. Some in Hong Kong worry about a brain drain to match the flight overseas of thousands of senior managers in the years prior to the 1997 handover of Hong Kong to Chinese rule. But while some topflight talent is shifting to the mainland this time around, many migrants are twenty- and thirtysomethings who simply can't find work at home.
Making matters worse, there is no guarantee they will get good jobs across the border. Thousands of mainlanders with overseas educations and experience have flocked home since the U.S. economy went south. And a record 1.23 million mainland university grads will enter the job market this year. Not only are they willing to work for a third of what Hong Kongers once commanded, they also speak fluent Mandarin and are better attuned to local customs.
Of course, a lucky few from Hong Kong still win such expatriate perks as housing and club memberships. But they find themselves resented by their mainland colleagues and under pressure to perform. "I need to learn three times faster than them to justify my value," says Tony Cheung, who oversees e-commerce at state-owned China Pacific Insurance and lives in a company-owned apartment near Shanghai's historic Bund waterfront.
With good jobs already growing scarcer in Shanghai and Beijing, Hong Kongers are being forced to accept positions in less salubrious climes. Melissa Chou, a human resources exec who lost her job at Lucent Technologies Inc. in November, headed for the interior province of Guizhou. There she is a human resources manager for a Hong Kong construction company that recently acquired five state-owned cement factories. It's a rough place for a soft-spoken Hong Kong woman. Not long after Chou arrived, her colleagues pestered her to get drunk with them. Eventually, they gave up, she says. "They now know that I don't drink."
One mistake Hong Kong natives make is to assume that their Chinese heritage means they'll smoothly navigate local customs. "Hong Kongers think they know Chinese culture," says a property agent in Shanghai. "But their Chinese culture is different from ours." For instance, she says, Hong Kong business managers are tough negotiators who almost invariably get their way--but end up poisoning relations.
Still, as mainland workers quickly close the skills gap, Hong Kongers are learning to check their egos at customs. Hong Kongers "don't have any competitive strength any more," says Kenny Ng, general manager at the Beijing branch of Manpower Resource Computing Ltd., a Hong Kong human resources software outfit. Ng once employed 17 from Hong Kong. Now, out of 100 employees, there's just one besides him. In three years, he says, Chinese will have the same skills as Hong Kongers.
Even with the window of opportunity closing, many of the jobless in Hong Kong see China as their only salvation. Their résumés are pouring in at three times the rate they did a year ago, say mainland headhunters. "If you don't catch this moment," says former Lucent exec Chou, "you'll get left behind." With Hong Kong unemployment projected to rise to 7%, that's a scary thought.
By Frederik Balfour in Hong Kong, with Alysha Webb in Shanghai