Hiring the right talent in Hong Kong to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in Hong Kong yet. Our PEO and EOR services can be the solution for your company.
Recruitment can be a tricky business, especially when a company is venturing to unfamiliar countries and exploring new markets. This is where the services of a specialist, who can come in and oversee the process for you, comes in handy.
Are you curious about the recruitment process in Hong Kong? In this guide, we will share the ground rules of hiring and recruiting talent in Hong Kong. Our comprehensive knowledge of all Hong Kong employment sectors and understanding of the culture and customs guarantees an untroubled transition.
The Recruitment Process in the Hong Kong
A foreign company expanding into Hong Kong does not require the assistance of a local entity to hire their employees. However, it is vital to your recruitment efforts to understand where you can find the right talent (both foreign and domestic), as well as which national employment organizations an employer can collaborate with to access the right talent pools. This, though, takes time. And once the employee is found, the employer must follow rigorous procedures, which include:
- Registering with the Inland Revenue Department (IRD) for a Tax Identification Number.
- Registering for a Mandatory Provident Fund (MPF) with the Social Welfare Department to pay social insurance contributions.
- Registering employees with the Inland Revenue Department (IRD).
- Registering employees for Hong Kong ID Cards, and the valid visas/residence permits.
- Creating employment contracts and translating them to Chinese and/or English.
- Sending in a sponsorship letter to the Hong Kong Immigration Department for overseas employees.
- Applying for employee’s visas or special expatriation status (if applicable).
- Calculating employees’ monthly salary and creating pay slips.
- Researching for any available tax-free allowances or benefits.
- Submitting wage tax returns and national insurance forms.
- Corresponding with the involved parties (organizations, trade unions, etc.).
- Creating annual accounts, financial administration, and year-end statements.
- Creating a payment schedule for wage tax, national and social insurances, and net wages.
The recruitment process requires time and dedication, and how can you find these things in the array of all these complicated tasks? Well, allow us to provide the answer - by engaging an Employer of Record (EOR) such as Bradford Jacobs. By acquiring our services, we can convert your Hong Kong expansion goals into an action plan with a few simple steps:
- Bradford Jacobs steps in as an EOR and acquires the right employees, ensuring they comply with Hong Kong employment contracts, payroll, HR, tax, visa requirements, and work permits (if required).
- We manage all work-related registration formalities, whilst you have daily control of your employees.
- The employees must complete their time sheets and expenses claims and we invoice you, the client. Once paid, we deduct all contributions to the authorities of Hong Kong and transfer the balance into employee’s account.
Within a few days, your company has international presence in Hong Kong – in a prime position to explore further expansion without risking the expense or hassle of setting up your own subsidiary or branch office.
Legal Checks You Can Make on Employees
When commencing the recruitment process in a foreign country, employers should consider their legal obligations.
In Hong Kong, employment law is stipulated by The Employment Ordinance, which highlights the individual rights, duties, and responsibilities of both the employer and employee. The Ordinance also governs the conditions of employment to ensure the protection of the employee.
This includes being able to ask prospective employees for background checks, which is governed under the Personal Data Ordinance. Personal data may only be collected for specific purposes, and also requires that the data collected be adequate, but not excessive.
Applicants must be expressly informed to the data collection requirements, and before the check is done, must sign a Personal Information Collection Statement, stating their consent.
Checks and tests that can be requested are as follows:
- Criminal background check
- Medical examination – the employer can only be done to obtain necessary information regarding the candidate’s health that support a medical practitioner’s opinion that he or she is fit for employment.
- Drug and alcohol testing – needs the employee’s prior consent to carry out this test.
Basic Facts on Hiring in the Hong Kong
Here are some basic facts, outlined by the Employment Ordinance, about hiring in Hong Kong that are important for every recruiter to know:
- Employers must use consistent selection criteria for the recruitment, promotion, transfer, training, dismissal, and redundancy for employees, as well as the employment contract terms and conditions.
- Ensure equal opportunities for employees based on their skills, experience, and ability to perform.
- Discrimination on age, gender, religion, race, marital status, or disability is prohibited.
- Recruiters must only ask questions related to the job requirements during a job interview.
- Employees handling job applications and interviews should be properly trained to avoid acts of discrimination.
- Employers must ensure all advertising materials and accompanying literature relating to employment does not list any attributes such as age, gender, marital status, race, religion, and language (unless justifiable).
- Candidates must be short-listed by employers on the basis of their skills and capabilities matching with the objective selection criteria.
- Tests used for selection purposes must be designed to relate to the job requirements and should measure an applicant’s actual or potential ability to do the job.
- Employment contracts can be written or verbal, but it is common to have contracts in writing, outlining all employment terms clearly.
- An employee is entitled to 7 days of annual leave during their first year of work, but this gradually increases according to employment length.
- Probation is between 1-6 months, depending on the terms of the employment contract.
- Payments to the Mandatory Provident Fund (pension scheme) are mandatory after the employee has spent over 60 days in employment with the employer.
Working with a Recruitment Agency
When it comes to advertising for recruitment, you can either post vacancies directly with the Labor Department through the Interactive Employment Service or the Employees Retraining Board, or else you can use a hiring agency, which can look for talent both locally and internationally.
In Hong Kong, hiring agencies must be licensed by the Labor Department. The Labor Department also keeps a list of all licensed hiring agencies in the country of China on their website, where it is continuously updated.
To engage with a hiring agency, extra fees will apply.
What are the Benefits of Hiring Outsourcing for Hong Kong?
Outsourcing recruitment services for Hong Kong provides major benefits of more efficient, speedy, and cost-effective business expansion. Optimizing this service allows companies to focus on managing their new enterprise and meeting their development goals, along with some other significant advantages:
- An extensive talent search can be done with reduced costs.
- Guarantees local employment compliance requirements are met with no hassle or hurdles.
- Removes the need for a subsidiary set-up.
- Improves work flexibility.
- Alleviates the risks with an easy operation that provides the company an opportunity to explore new markets.
- Allows you to focus on core business operations whilst the administration is taken care of.
At Bradford Jacobs, our Employer of Record (EOR) services take care of employee recruitment, onboarding, payroll, compliance and providing ongoing support. We choose the best-qualified talent to fill the roles you need and use our expansion know-how to guarantee you comply with all Hong Kong payroll regulations, (including salaries, tax, and social insurance) by the time your new employees are sitting at their desks.
To get started on your recruitment expansion in Hong Kong, contact us today.