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Mistakes to Avoid While Hiring Employees in Hong Kong

Mistakes to Avoid While Hiring Employees in Hong Kong

12 Jan 10:00 by Contributor

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Learn more about what BGC Hong Kong can do for recruitment outsourcing.


If you are an employer looking to hire employees  in Hong Kong, you have to take adequate precautions while hiring or bringing onboard new workers to your team. You’d want to make sure you have the best-skilled persons you can afford with your current hiring budget that fits the work culture of your team. Getting the right employee is essential for the success of every business.

The rules of Hong Kong sufficiently protect employees from mistreatment by their employers. While this is an excellent way to protect the community's workforce, there are extreme cases where employers are at the receiving end of the law. Several employers have encountered significant problems from violating labour laws, which has cost them more than they could have imagined.

As an employer, especially if you are running a foreign company in Hong Kong, you have to be thorough with your hiring process to ensure that you are well protected, and all loose ends are tied even while complying with the law.

Here are 7 common mistakes companies make while hiring in Hong Kong:

1. Lack of Proper Understanding of the Employment Laws

Before you embark on employment processes in Hong Kong, you must first familiarise yourself with the employment regulations. It is the only way in which you can protect your organisation.

A full understanding of the employment laws will guide you on what steps to take or not during hiring. You'd get informed on the essential elements that should make up your employment process and what structure would work best for your organisation.

2. Hiring Without Legal Entity

As a foreign company, you should be aware that you cannot hire employees directly in Hong Kong without a legal entity. If you fall into this category, you'd need to use a talent dispatching service to outsource your hiring process to an HR outsourcing agency that can help you completely manage your hiring process.

3. Failure to Draft a Proper Contract

You should know that a detailed contract is what will save your business or organisation whenever there is a legal dispute between you as an employer and your employees. Understanding that the labour laws protect employees, you can draft a detailed contract according to the law to protect your organisation from excesses of employees.

Once an employee agrees to the contract (so long no part of the agreement contradicts the law), they remain bound by it all through the term defined by the agreement. This way, both parties can understand the terms of service and can operate within it.

4. Direct Employment Confirmation

It is best as an employer that you do not automatically confirm the appointment of employees. You should set up a structure that allows you to place newly hired staff on a probationary period, to test their work capabilities and ethics.

Your contract should cover that an employee can lose their appointment when they do not make satisfactory work progress or do not meet the work standards defined by the organisation while they are still on probation.

This method allows you to legally weed out unproductive employees in the case of a wrong decision during the recruitment process.

5. Foreign Employees and Visa Applications

In order for a company to expand globally, it needs to consider hiring people from all over the world to boost the local workforce. Your company going global means that you will have the opportunity to hire foreign employees and have a more diverse team, however there are some things you need to take care of first.

There are a number of documents that your foreign employees need to have to be able to work for your company. They have to submit the work permit and visa application. The way this is done and the type of visa that is required depends on the country or the regulations that they have. You need to ensure that these are completed to avoid any legal problems in the future.  

Despite the longer process compared to hiring locals, it is still worth the trouble. Having foreign employees in your company brings a different perspective to it and you will benefit from niche skills that would transform your company. 

6. Resistance to HR Outsourcing

One mistake you can make when hiring in Hong Kong is to think you can do it all by yourself or try to regardless of your incapacities.

While it is okay to handle your human resource management and handle your hiring and employment processes internally, you should be welcoming to the idea of using professional search recruitment agencies or organisations to handle your employee management.

You would have a lot at stake if you handled your hiring process internally without the right skills and experience. You could be at the risk of lawsuits from local employees, management crises, and even financial crises if proper damage control measures are not implemented.

You can save yourself of the extra headaches with a PEO (Professional Employer Organisation) in Hong Kong to help handle your Human Resources Management. With these organisations, you can hire in Hong Kong, manage and train your staff, all within the confines of the law. It is your safest bet when deciding to hire employees here.

7. Remuneration and Compensation Plan

Another mistake you would make while recruiting will be setting a fixed price for employees as their remuneration. It would help if you broke down employees' pay into parts that cover basic salary, bonuses, and allowances.

Experience has shown that this payment method and compensation allows enough flexibility for employers to manage their costs and employees adequately.

In addition, creating a remuneration and compensation plan is what makes workers attracted to your company and this way you will be able to hire qualified candidates. Employees will be more motivated to perform well and meet their goals if they know they will be paid extra and be appreciated for their effort. 

Final thoughts

As it can be seen, it is important for employers, especially if you are running a foreign company in Hong Kong, you have to be thorough with your hiring process to ensure that you are well protected, and all loose ends are tied even while complying with the law. Some of the most significant elements that need to be considered are complying to legal obligations and being open to outsourcing and foreign employees.


This article was contritbuted by Clare Merrithew.


Learn more about what BGC Hong Kong can do for recruitment outsourcing here.

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