Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Indonesia, between November 2022 and January 2023. It also interviewed employers and industry experts across the region to understand their perspectives on skills gaps, as well as reskilling and upskilling aspirations.

The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.

The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.

This article—one in a series of 12 market reports—examines these issues in Indonesia. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.

 

Key findings

Indonesian employees consider digital skills (60%) the top focus area for upskilling. Among these, basic digital skills are foundational for 88.3% of Indonesian workers. As digitalisation spreads across the archipelago, the country will increasingly demand more advanced skills. Employees consider capabilities with data analysis and visualisation (56.7%), IT support (51.7%), and digital marketing and e-commerce (48.3%) as the most important advanced tech skills to have. Workers have the highest expectations for their employers, believing they should support their development by providing information on skills (57%), through financial incentives (54%), recognition (43%) and supporting their mental well-being (35%).

Indonesia is one of Southeast Asia’s fastest-growing internet economy. Between 2015 and 2019, its technology sector grew at an average rate of 49% a year, alongside rapid e-commerce adoption by both large and small businesses.1 The economy’s digitalisation has enabled many in the workforce, especially the young, to participate as freelancers, particularly in the transportation and delivery sectors.2

However, many have been left out due to uneven internet connectivity and low literacy rates. For instance, most internet users tend to be concentrated in urban centres and are young—only 21% are over 50 years old.3 The issues are not just limited to the older population, as almost a quarter of young people (22.5%) in Indonesia are not in education, employment or training4 and the World Bank estimates that only 19% of 25-34 year olds had a tertiary qualification in 2021, much lower than the global average of 47%.5

 

The future of Indonesia’s economy is digital

Most Indonesian employees (60%) consider digital skills the most important to acquire. This is in sync with the digitalisation underway in the economy — Indonesia’s digitally skilled workers are forecast to contribute US$303.4bn to its GDP by 2030, accounting for 16% of GDP.6

Government analysis shows that the expanding technology sector could create 20m-45m new jobs in Indonesia.7 Between 2019 and 2030, non-tech sectors such as professional services, manufacturing and construction — are expected to see the highest growth in GDP contributions from digitally skilled workers, as these sectors increasingly adopt technology to improve their productivity.8

 

Figure 1: Digital skills are a top priority for Indonesian employees

Which skill categories do you think are the most important for the workforce in your sector to acquire today? (%)

Source: Economist Impact, 2023

Within the broad category of digital skills, employees in our survey consider advanced digital skills such as data analysis and visualisation (56.7%), IT support (51.7%), and digital marketing and e-commerce (48.3%) as must-have skills. Employees also said the same for coding and programming (26.7%) and artificial intelligence (AI) and machine learning (25%). The importance given to these advanced skills possibly reflects a skills gap, as data from 2020 suggest that  less than 1% of the workforce in the country possessed advanced digital skills.9

Advanced digital skills are becoming more important for various sectors too. For instance, big data analytics skills are increasingly used in the banking sector to understand customers’ spending patterns and preferences, to cross-sell products and for fraud management.10 Similarly, AI is expected to improve care delivery and hospital operations.11 Meanwhile, farmers are benefitting in myriad ways from real-time monitoring and prediction systems with Internet of Things-enabled tools.12

Cybersecurity is another must-have advanced digital skill for 36.7% of employees, reflecting Indonesia’s struggles with digital risks. The country was ranked the most vulnerable in Southeast Asia for cyber risks, and faced more than 11m attacks in the first quarter of 2022 alone.13

Although green skills such as sustainability reporting, sustainable business management and supply chain management are considered less important at present(15%), these skills would gain importance due to the country's rising sustainability concerns. Indonesia is ranked among the top countries exposed to climate risks with high vulnerability to all types of flooding and extreme heat. 14

 

Figure 2: Advanced digital skills such as data analysis and visualisation, and IT support are must-haves

Indicate which specific types of digital skills are must-have, good to have or not needed for the workforce in your sector today (%)

Source: Economist Impact, 2023

 

Infrastructure and high costs complicate access to skilling

Employees in Indonesia are strongly motivated to acquire new skills. Nearly half (49%) of the employees agree that upskilling or reskilling has had a high impact in improving performance in their current roles, and 54% report a high impact in exploring new roles and areas of interest. Despite these motivations, more than one in four (27%) employees cite poor internet access as a barrier in acquiring new digital skills. Nila Marita, director and head of external affairs at GoTo—the holding company of two major Indonesian startups, Gojek and Tokopedia—agrees that internet connectivity is “crucial to increase access to important learning opportunities in Indonesia and bridging this gap will enable more Indonesians to acquire digital skills.” Addressing access is important, as employees utilise online courses for learning. Indeed, 54% of employees say they obtain digital skills outside of the workplace via online courses.

High costs (42%) are also a major hurdle in Indonesians’ ability to digitally upskill, and companies are not investing enough to provide workers with on-the-job training.15 Additionally, Indonesia has a large, informal sector made up of low-income workers, creating challenges for employees to afford skilling programmes and for the government to reach them.16 17

 

Figure 3: Key skilling obstacles for employees across skills types

What are the top three significant obstacles that you face while learning new skills?

 

 

 

Source: Economist Impact, 2023

Another challenge that employees cite across most skill sets is a lack of time in learning new courses. Indonesian workers have reported experiencing higher workload after the Covid-19 pandemic.18 This also aligns with the higher importance that employees in our survey assign to self-management skills like time management, resilience and stress tolerance (49%).

 

High expectations from employers

According to our survey respondents, employers are the most responsible for supporting their development across every category apart from providing access to diversified skilling programmes. In particular, they see their employers as a key source of providing information on skills (57%), financial incentives (54%), recognition (43%) and support for their mental well-being (35%).

Employers could address many of the obstacles that employees face such as high costs and time restrictions by subsidising access to training programmes and integrating more workplace training sessions. “Both the government and private sector in Indonesia have been scaling up efforts to develop the country’s talent pool in recent years,” says Ms Marita from GoTo. For instance, organisations and the government are increasingly collaborating with universities to prepare university students with in-demand skills. Private sector companies are also training the trainers and working together with them to design the curriculum based on companies’ skills needs.

 

Figure 4: Employers are considered the most responsible for upskilling Indonesians

In your opinion who is responsible for supporting employees regarding the following issues? (%)

Source: Economist Impact, 2023

Seventy-seven percent of employees, substantially higher than the regional average (66.5%), believe that employers now lean towards skills-based hiring over paper qualifications. In this context, efforts by government, educational institutions and companies to communicate what skills are in-demand will help the workforce prioritise which ones to learn. While most workers rely on social media and advertisements (73%) for information on valuable skills, government awareness programmes are also an important source for 50% of employees.

 

Multi-stakeholder collaboration key to closing skills gaps

Overcoming access and infrastructure gaps is integral to realising Indonesia’s digital economic potential. The government has made efforts to counteract these issues through various programmes such as Kartu Prakerja, an online upskilling programme targeted at retraining one million unemployed and low-income adults who are 18-64 years old.19 20 The programme takes an end-to-end approach, providing access to upskilling and reskilling subsidies, courses and job vacancies. Subsidies can also be useful in driving the uptake of green skills, which acts as the biggest motivation to acquire these skills for one in three surveyed employees. Another programme provided by Indonesia’s Ministry of Communications and Information is the Digital Talent Scholarship (DTS). It aims to develop the skills and competitiveness of the country’s workforce in the information and communication technology sector.21

For Indonesia to fully unlock the economic potential of digital skilling, it must extend this kind of opportunity to workers at micro, small and medium enterprises which employ 97% of the country’s workforce.22

Another government programme is Making Indonesia 4.0, a roadmap launched in 2018 to accelerate digitalisation.23 Elements of this roadmap are geared towards training and reskilling workers as technology becomes more ingrained in industrial processes. Additionally, attempts to broaden equitable access to digital skilling opportunities could close the skills gaps.

References

1 https://digitalcfoasia.com/2023/01/10/addressing-the-critical-skill-gaps-in-indonesia/

2 https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-Report-Indonesia-2021-accessible.pdf

3 https://smeru.or.id/en/publication/diagnostic-report-digital-skills-landscape-indonesia

4 https://data.worldbank.org/indicator/SL.UEM.NEET.ZS?locations=ID

5 https://gpseducation.oecd.org/CountryProfile?primaryCountry=IDN&treshold=5&topic=EO

6 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf

7 https://opengovasia.com/creating-million-new-jobs-through-digital-technology-in-indonesia/

8 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf

9 https://pathwayscommission.bsg.ox.ac.uk/sites/default/files/2022-03/FINAL_Diagnostic%20Report_Accessible.pdf

10 https://www.sciencedirect.com/science/article/pii/S1877050915005992

11 https://www.usa.philips.com/healthcare/nobounds/phoenix-childrens-benefits-of-ai-in-healthcare#_continue-reading

12 https://www.xcubelabs.com/blog/benefits-of-iot-in-agriculture-and-smart-farming/

13 https://en.antaranews.com/news/227061/indonesia-faces-11-mln-cyber-attacks-in-2022-first-quarter

14 https://www.adb.org/sites/default/files/publication/700411/climate-risk-country-profile-indonesia.pdf

15 https://www.weforum.org/agenda/2022/11/indonesia-edtech-financial-inclusion/

16 An informal economy broadly refers to any part of the economy that is unregistered, meaning that they are not covered or are insufficiently covered by formal employment arrangements. In most of these cases, companies remain largely unaccountable to any regulation as workers are not officially classed as employees, limiting their access to government services, including welfare, labour rights protections and public programmes. In Indonesia, 60% of the workforce is employed by the informal sector and accounts for 22.7% of national GDP (US$776 billion).

17 https://www.ilo.org/jakarta/areasofwork/informal-economy/lang--en/index.htm

18 https://en.prnasia.com/releases/apac/68-of-indonesia-s-employees-willing-to-forgo-higher-salaries-or-job-promotions-for-work-life-balance-michael-page-366002.shtml

19 https://www.prakerja.go.id/

20 https://money.kompas.com/read/2023/01/06/123000126/kartu-prakerja-2023-target-anggaran-dan-pelaksanaan-pelatihannya-

21 https://digitalent.kominfo.go.id/program

22 https://www.weforum.org/agenda/2022/05/digitalization-growth-indonesia-msmes/

23 https://kemenperin.go.id/artikel/23388/Kemenperin:-Revolusi-Industri-4.0-Optimalkan-Potensi--Indonesia-di-Sektor-Manufaktur

The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.

The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.

This article—one in a series of 12 market reports—examines these issues in Pakistan. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.

Key findings

Digital skills (57.3%) are a top priority for employees in Pakistan owing to a booming IT sector and the country’s rapidly growing freelancer market, which is the third fastest growing market globally#_ftn1" name="_ftnref1" title="">[1]. Recent acceleration of digitalisation has resulted in higher demand for basic digital skills (72.1%).#_ftn2" name="_ftnref2" title="">[2] #_ftn3" name="_ftnref3" title="">[3] Employees in Pakistan are motivated to acquire digital skills to improve career progression and promotion opportunities (29.3%), as well as to secure better pay and bargaining power (23%). Both the government and employers have important yet distinct roles to play in upskilling Pakistan: while employees expect the government to provide financial incentives, they point to employers as being responsible for providing access to diversified skilling programmes and information on the skills needed for different roles.

Despite rising digital penetration in Pakistan in recent years, 46% of the population still lacks internet access.#_ftn4" name="_ftnref4" title="">[4] While 80% of adults live in areas served by mobile broadband, many still do not access the internet.#_ftn5" name="_ftnref5" title="">[5] Out of a total of 182 m mobile subscriptions, only 38 m belong to women.#_ftn6" name="_ftnref6" title="">[6] This could be a result of the low female literacy rate (48%),#_ftn7" name="_ftnref7" title="">[7] which is far below the overall literacy rate of around 60%.#_ftn8" name="_ftnref8" title="">[8] Moreover, the female labour force participation rate is among the lowest globally (25%) and women are mostly employed in the informal sector.#_ftn9" name="_ftnref9" title="">[9] On the other hand, the country struggles with youth unemployment. Almost a third (31%) of the educated youth with professional degrees was unemployed in 2022.#_ftn10" name="_ftnref10" title="">[10] 

Amid this backdrop, the government is prioritising digitalisation and implementing initiatives to close the existing skills gap. For instance, Pakistan introduced its “Digital Pakistan” roadmap in 2018, which set out a number of policies and initiatives to help the economy to realise US$59.7 bn (PKR9.7 trn) in annual value by 2030.#_ftn11" name="_ftnref11" title="">[11] The policy targets the upskilling and reskilling of young graduates and the existing workforce to support the country’s growing digital economy and help spur freelance IT sector exports. On this front, it hopes to reach US$3 billion by 2024, up from US$2.12 billion in 2021.#_ftn12" name="_ftnref12" title="">[12]

Infrastructure obstacles—such as inequitable internet access across the country and a lack of sufficient digital skills training—have lowered the pace of digitalisation at workplaces, says Saad Gilani, a senior programme officer at the International Labour Organization (ILO).

Pakistan’s growing freelance economy boosts digital upskilling

More than half of employees (57.3%) in Economist Impact’s survey consider digital skills the most important to acquire. Within this broad category, most employees consider basic digital skills (72.1%) as the most important to have, a trend that reflects the country's struggles with basic digitalisation. Advanced digital skills are also considered must-haves by employees in Pakistan such as data analysis and visualisation (49.2%), digital marketing and e-commerce (47.7%), and IT support (40%).

Apart from the pandemic, which motivated many employees (34.7%) in the country to upskill, free online courses (33.3%) have enabled people to acquire new digital skills. One such initiative, the government's e-rozgaar platform, provides online training to budding freelancers.#_ftn13" name="_ftnref13" title="">[13] #_ftn14" name="_ftnref14" title="">[14] Additionally, Pakistan’s digital freelance market surged by 69% annually in 2020, which registered especially strong gains for women, who often struggle to achieve equity in traditional education and labour force participation.#_ftn15" name="_ftnref15" title="">[15]

For Mr Gilani, the success of the freelance market falls in line with his observations that young employees in Pakistan are highly self-motivated to upskill to remain relevant in the job market. “There are not many employer-led initiatives, so employees are learning by themselves,” he says.

Apart from digital skills, employees in Pakistan point to the importance of self-management (53.3%) and soft skills (46.7%). For example, 71.4% consider adaptability and flexibility a high priority, compared with the regional average of 65.5%. Similarly, 81.5% report communication skills as a “must-have”, higher than the regional average of 70.9%. Mr Gilani suggests these findings reflect the fact that soft skills are applicable across diverse job roles and industries. Soft skills attainment also appears to be linked to digital capabilities—around 81% of employees in Pakistan agree that digital skills have helped them gain confidence and improve in other areas like communication, analysis and critical thinking.

Although green skills (10.7%) are not considered a key priority for employees in Pakistan, Mr Gilani says this is an area for concern given the climate change risks impacting the country.#_ftn16" name="_ftnref16" title="">[16] This vulnerability heightened in 2022, when intense rainfall resulted in devastating flood waters, causing 1,100 deaths and affecting 33m individuals.#_ftn17" name="_ftnref17" title="">[17]

Barriers to upskilling Pakistan

Employees in our survey point to a lack of time (37.3%) and poor workplace culture of learning (32%) as barriers to acquiring new skills. These findings are relevant as most employees report workplace training (54.7%) as a key source of learning new digital skills, emphasising the need for more skilling opportunities in offices. 

Another key issue, Mr Gilani says, is the mismatch between university course offerings and industry demand. “There is a high tendency for unemployment among the highly educated youth, stemming from problems in our education system—we don’t see universities inviting companies to tell students what they are looking for and employers aren’t sharing information with educational institutes”. In addition to focusing on university degrees, employers could also consider employees’ skillsets as an important signal for hiring new talent. Nearly 67% of surveyed employees believe that employers in Pakistan are hiring based on skills-based qualifications rather than full-time degrees.

Distinct expectations from government and employers

Faced with the high costs of reskilling and upskilling, more than half (52%) of employees consider the government responsible for providing financial incentives for upskilling. For instance, 29.3% cite government subsidies as a major motivator for acquiring specific skills such as green skills. Providing funding for green skills can bolster Pakistan’s capacity to adapt to a changing climate, says Mr Gilani. He suggests that greater investments in green skills and industries could improve the country’s access to renewable energy sources, reduce its climate resilience and create jobs.

Across all skill types, employers also have an instrumental role in upskilling and reskilling employees. More than four in ten survey respondents say employers have a role to play in providing access to diversified skilling programmes (42.7%) and information on the skills needed for different roles (41.3%).  Over a third of employees also consider the government responsible for providing information on skills needed for different roles.

 

Leaving no one behind

Pakistan is undergoing a pivotal shift in its economy as digital transformation gains momentum. A large part of its success will hinge on leaving no one behind and giving an equal opportunity to everyone including women, young graduates and freelancers, which will boost the country's workforce significantly. Mr Gilani highlights the importance of government’s leadership and direction in providing an overall direction to this skills ecosystem, “If there is consistent leadership, digital skilling policy and an ecosystem, then things can be done.” And while digital skills will continue to be important as the country grows and digitalises in the next few years, analytical and soft skills will be equally important.

  #_ftnref1" name="_ftn1" title="">[1]https://dailytimes.com.pk/818869/pakistan-becomes-the-4th-fastest-growin... #_ftnref2" name="_ftn2" title="">[2] Basic digital skills are defined in the survey as the ability to operate basic office software, i.e. Microsoft Office, and/or set up Internet and digital communication tools. #_ftnref3" name="_ftn3" title="">[3] Pakistan is the third-fastest growing freelancer market globally. [Source: http://onlinelabourobservatory.org/oli-supply/] #_ftnref4" name="_ftn4" title="">[4]https://www.pta.gov.pk/en/telecom-indicators #_ftnref5" name="_ftn5" title="">[5] https://www.gsma.com/asia-pacific/wp-content/uploads/2022/11/Making-Digi... #_ftnref6" name="_ftn6" title="">[6] https://onlinelibrary.wiley.com/doi/epdf/10.1111/rode.12994 #_ftnref7" name="_ftn7" title="">[7]#Female_Literacy_Rate_In_Pakistan_2022">https://ilm.com.pk/pakistan/pakistan-information/male-and-female-literac... #_ftnref8" name="_ftn8" title="">[8] https://tribune.com.pk/story/2322073/literacy-and-pakistan #_ftnref9" name="_ftn9" title="">[9] 2021 World Bank estimates, https://www.worldbank.org/en/results/2022/07/07/supporting-legal-reforms... #_ftnref10" name="_ftn10" title="">[10] https://tribune.com.pk/story/2342344/over-31-of-educated-youth-unemployed-reveals-pide  #_ftnref11" name="_ftn11" title="">[11] https://accesspartnership.com/pakistans-pkr97-trillion-digital-potential/     #_ftnref12" name="_ftn12" title="">[12] https://www.thenews.com.pk/print/887910-govt-eyes-3bln-from-freelancing-it-exports-by-2024   #_ftnref13" name="_ftn13" title="">[13] https://erozgar.pitb.gov.pk/ #_ftnref14" name="_ftn14" title="">[14] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref15" name="_ftn15" title="">[15] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref16" name="_ftn16" title="">[16] https://edition.cnn.com/2022/08/30/asia/pakistan-climate-crisis-floods-justice-intl/index.html #_ftnref17" name="_ftn17" title="">[17] https://www.weforum.org/agenda/2022/09/pakistan-floods-what-role-did-climate-change-play/

The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.

The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future. 

This article —one in a series of 12 market reports—examines these issues in Hong Kong. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.

Key takeaways:

Almost half (47%) of employees in Hong Kong report a poor understanding of what skills are needed in the market. Although analytical (66%) and self-management (65%) skills are top priorities for employees due to their wide application, advanced digital skills will be key to supporting Hong Kong’s digital economy aspirations. Hong Kong employees view cybersecurity (64.9%) and data analysis and visualisation (54.1%) as must-have advanced digital capabilities. Over half (51%) of employees in Hong Kong report that their employers are shifting their hiring processes to refocus on skills-based qualifications rather than full-time degrees, placing more importance on the role of employers and the government to provide support and clarity into what skills are needed in the market.

Despite being a major global business hub, the city’s intensifying talent crunch#_ftn1" name="_ftnref1" title="">[1] is severely impacting its companies’ access to workers with a specific set of skills. Without action, the economy could lose out on US$220bn in unrealised value due to lack of talent by 2030.#_ftn2" name="_ftnref2" title="">[2]

The government has acknowledged the decline in the city’s workforce in the past couple of years and developed policies aimed at attracting high-skilled talent.

The future of the city’s workforce is further complicated by a rapidly ageing population.#_ftn3" name="_ftnref3" title="">[3] By 2050 roughly 40% of citizens will be aged 65 years or above.#_ftn4" name="_ftnref4" title="">[4] With longer life expectancies keeping people in the workforce for longer, sustaining Hong Kong’s economy will require a focus on empowering older workers and bolstering their skills with re-education where required.

 

Hong Kong employees consider analytical and self-management skills as most important

Similar to their counterparts in Australia, the Philippines and Taiwan, Hong Kong employees consider analytical (66%) and self-management (65%) skills as priority areas. This is likely due to their high degree of transferability and cross-role application (Figure 1). Apart from these skills, more than half of employees in Hong Kong consider advanced digital skills like cybersecurity (64.9%) and data analysis and visualisation (54.1%) as “must haves” (Figure 2). Hong Kong is especially vulnerable to cyber-attacks as a result of low awareness among businesses to monitor these threats. This, along with the rising cost of breaches, is driving more demand for cybersecurity skills.#_ftn5" name="_ftnref5" title="">[5]

 

Employees are unsure of in-demand skills

Motivations to pursue skills vary. Career progression and promotion opportunities are major drivers for workers to acquire analytical and digital skills, demonstrating their widespread application to different occupations (Figure 2). In comparison, 33% report that their pursuit of soft skills is motivated by personal development and lifelong learning. When asked about the benefits of upskilling and reskilling for their jobs, employees report significant boosts to their salaries and bargaining power (63%) and high improvements in their performance in their current role (55%).

Despite these net positives, many workers in Hong Kong report insufficient time to pursue upskilling and reskilling due to long working hours and other commitments - a trend common across all skill sets. Nearly half (47%) of surveyed employees have a poor understanding of what skills are needed in the market. Mr Jim So, regional development manager of Asia at Skills Consulting Group, shares that even when employees are offered upskilling opportunities, many choose not to pursue them because they “don’t necessarily see the direct benefits”. This might explain why only 18% of Hong Kong employees prioritise green skills, as the applications are still nascent.

The workplace’s key role in upskilling

Employers can play a central role in filling these gaps, as workplace training remains an important source for workers to acquire digital (44%), analytical (37%) and soft (32%) skills. Online courses offer another recourse to employees’ lack of time, offering flexibility and affordability. More than half (52%) of workers in our survey believe that employers now value online certificates. Experts agree. Over half (51%) of employees in Hong Kong report that their employers are shifting their hiring processes to refocus on skills-based qualifications rather than full-time degrees. In addition, recruiters are increasingly prioritising “experience, attitude and skills over paper”, according to Mr So.

Employees also expect their employers to provide information on emerging skills (65%) and offer financial incentives (62%) to reskill and support their mental well-being (44%). To remain competitive, firms could build working environments that appeal to employees’ changing needs—for instance, understanding employees’ needs and providing them with flexibility for working and learning. Furthermore, creating the right policies to enable further learning and embedding incentives would help encourage the upskilling they need to plug labour gaps. For instance, employers should look to align remuneration with skills, especially as the higher skills-based pay is a motivator for digital (25%) and analytical (30%) upskilling.

Government support can reshape Hong Kong upskilling

While employers play a crucial role in supporting the upskilling of their workforces, the government could pivot the macro-environment to incentivise and enable upskilling. One way they can do this is with financial incentives and subsidies. Several initiatives such as the Continuing Education Fund grants HK$25,000 (US$3185) to eligible adults to upskill or reskill. Recently, Hong Kong’s Innovation and Technology Commission established a programme#_ftn6" name="_ftnref6" title="">[6] that will subsidise local firms’ efforts to upskill their employees in advanced technologies.

One key role for the government is to raise awareness of in-demand skills. At present, only a quarter of Hong Kong employees receive information about future skills from government awareness programmes compared with the regional average of 42.5%. Almost a quarter of employees (27%) also identify lack of information as a significant obstacle to learning. To overcome the communication gap, the government could provide clarity on valuable future skills by publishing reports that identify in-demand skills. Working with firms and industry associations, the government could better promote specific reskilling courses that are on offer. Doing so would also support the government’s efforts to bolster its digital economy and solve its tech talent crunch.#_ftn7" name="_ftnref7" title="">[7]

There is room for improvement around developing green skills. While most employees in Hong Kong are aware of sustainability issues, says Mr So, companies could do much more to prioritise green skills and increase awareness of the commercial as well as environmental benefits they can bring. The city’s scramble for talent has accelerated with the requirement of Hong Kong-listed firms to disclose sustainability reports. However, the shortfall in talent is a significant break on the city’s aspiration to become a sustainability hub.#_ftn8" name="_ftnref8" title="">[8] In addition, most green upskilling is currently motivated by personal interest (25%). Mr So remarks that there is an opportunity for the government to step into this gap and provide “investment and support” for learners “to be able to anticipate and adapt” to a changing marketplace and environment.  

  #_ftnref1" name="_ftn1" title="">[1]https://focus.kornferry.com/leadership-and-talent/hong-kong-must-use-its-competitive-advantages-to-close-the-skills-gap/ #_ftnref2" name="_ftn2" title="">[2] Ibid. #_ftnref3" name="_ftn3" title="">[3] https://www.reuters.com/breakingviews/brain-drain-solution-is-staring-hong-kong-face-2022-10-19/ #_ftnref4" name="_ftn4" title="">[4] https://www.weforum.org/agenda/2023/02/world-oldest-populations-asia-health/ #_ftnref5" name="_ftn5" title="">[5] https://www.scmp.com/tech/tech-trends/article/3188979/hong-kong-organisations-are-easy-targets-hackers-more-cyberattacks #_ftnref6" name="_ftn6" title="">[6] https://www.itf.gov.hk/en/funding-programmes/nurturing-talent/rttp/ #_ftnref7" name="_ftn7" title="">[7]https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3201238/where-are-all-tech-experts-hong-kongs-got-plenty-jobs-not-enough-talent-and-employers-are-fed #_ftnref8" name="_ftn8" title="">[8] https://asia.nikkei.com/Business/Business-trends/Hong-Kong-races-to-hire-ESG-talent-amid-green-hub-push