The Hong Kong Plague

Date: Tuesday, August 27, 2002 11:00 AM

*** H-1B NEWSLETTER ***

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Hong Kong businessmen are learning how to propagate shortage propaganda in
order to get their government to approve a visa to import cheap computer/IT
workers. Hong Kong companies put forth all the familiar arguments that are
used by lobbyists such as the ITAA, except for one thing - they are more
honest about their desire to manipulate salaries. The arguments include time
proven classics such as:

* surveys by IT departments that "prove" vast shortages of programmers

* complaining that schools don't educate enough programmers

* scare stories that claim without the visa companies can't compete in the
global economy

* claims that salaries are too high for programmers

* assurances that the visa is only for temporary immigrants

http://www.careerjournal.com/jobhunting/workabroad/20010418-mckinsey.html

Shortage of IT Pros
Plagues Hong Kong

By Kitty McKinsey

>From the Far Eastern Economic Review

By KITTY MCKINSEY

AS CEO AND FOUNDER of one of Hong Kong's few home-grown e-business software
companies, Sherman Chui was looking across the border to mainland China for
software engineers as long ago as 1995. At that time, their salaries were 10
or even 20 times lower than those of comparable Hong Kong
information-technology specialists.

Chui's inlooktech.com now employs some 30 managers and 150 developers at its
centre near Guangzhou -- twice the head count of the company's Hong Kong
headquarters. Even though salaries on the mainland have soared fivefold
since 1995, Chui says it still makes sense for him to recruit in China. "You
go to China because of the sheer abundance of talent -- if you need 30, 50,
100 good people, you can get them," he says.

After several years of watching the export of IT jobs to southern China, the
Hong Kong government is attempting to reverse the flow. It recently unveiled
measures aimed at bringing mainland Chinese IT specialists to Hong Kong
instead. It has relaxed immigration restrictions in the hope of filling an
expected shortfall of 120,000 IT experts in the territory over the next five
years.

Under the new rules, there is no quota imposed on the number who can come,
but they will not be allowed to change jobs during their first year in Hong
Kong. They will be eligible to apply for the coveted right of abode after
seven years' residence in the territory.

"Hong Kong must adjust our immigration policy so as not to lose out in
global competition," Security Secretary Regina Ip said in announcing the
controversial proposal last month. Industry observers agree that Hong Kong's
hopes of becoming a "digital hub" for Asia have been hampered by a shortage
of information-technology professionals and salaries which look very high
when judged on a global scale.

The visa scheme has been welcomed by the industry, but slammed by opposition
politicians, who say it reflects the failure of the Hong Kong education
system to train the right kind of people for the market. Paul Crosio, human
resources director at global communications company WorldCom, welcomes the
move: "This certainly opens up the market for employers' options and reduces
the squeeze on shortage of professionals."

Democratic Party lawmaker Sin Chung-kai, who represents the IT sector in
Hong Kong's Legislative Council, admits that 60% of companies he surveyed in
the territory have encountered a shortage of IT professionals. He expects
the salaries of mainland professionals could be as little as two-thirds
those of Hong Kong professionals. While Sin has criticised the measures for
political reasons, some in the industry will applaud anything that might
bring down Hong Kong's over-blown IT salaries. "We have to deflate this
incredible inflation in software engineers' salaries," says Joe Sweeney,
Internet analyst at market researcher Gartner in Hong Kong.

Aside from the money issue, inlooktech.com's Chui praises the visa scheme as
absolutely critical, saying "It's one of the best moves the Hong Kong
government has made." He said his company will apply for visas for five or
ten specialists, but will not ask them to move permanently to Hong Kong.
Chui says it's more important for his company to have the flexibility to
bring existing employees into the territory to work for periods of three to
10 months on specific projects.

The Hong Kong visa plan is only the latest evidence that the market for IT
talent is increasingly global. "Talent is a passport and is
nationality-blind," says Singapore's minister of communications and
information technology, Yeo Cheow Tong. "We are in a global war for talent."

To win that war, Singapore is pressing for visa-free travel within Asia for
IT professionals. In a separate initiative, Australia recently announced a
streamlined process for IT professionals to get permanent residence status
there to ease a shortage of skilled workers.

Back in Hong Kong, Chui sees visas for mainland Chinese as a first step in
the right direction, but thinks that more incentives are still needed."Hong
Kong has to open up visas for people from India, and give incentives to Hong
Kong companies," he says. "If we want to compete with the U.S., we have to
have tax write-offs for bringing in overseas talent. That's what the
government has to do if it wants to make the dream of a digital hub a
reality."

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