Against the backdrop of an overall labor shortage caused by an aging population, apart from clerical roles that will accelerate toward restructuring, Hong Kong enterprises are currently mainly absorbing AI's impact through natural attrition. The SAR government is not only actively planning to give inexperienced young people a foot in the door of the workplace, but will also provide flexible skills conversion courses for middle-aged and older employees.

While the local labor force is still trending downward and some industries face labor shortages, clerical positions once regarded as the main source of local white-collar jobs will continue to be in surplus. Fresh graduates and middle-aged clerical workers will be the main groups affected. This assessment of Hong Kong's manpower situation over the next three years comes from the latest interim update report on manpower projection released recently by the Hong Kong SAR government's Labour and Welfare Bureau. In view of the rapid spread of AI and the swiftly changing economic environment, the bureau has carried out related updating work since 2025 in order to keep pace with market dynamics and respond quickly with policy.

Overall, by 2028 Hong Kong's overall manpower shortage is expected to narrow from about 180,000 projected in 2024 to about 130,000. But nine key local industries still lack workers, with the construction sector facing the most severe shortage. At the same time, local clerical support staff are instead projected to be in surplus by 25,000 to 30,000, with AI having the greatest impact on fresh graduates and middle-aged clerical workers. Among them, about 70,000 middle-aged clerical support workers aged 45 to 54 who do not hold a post-secondary qualification face pressure to transition.

"As the baby boomer population retires one after another, Hong Kong will face a manpower shortage of 300,000 if it does not import external labor. AI has sharply reduced manpower demand in the financial industry and clerical work. Clerical work always comes to an end one day, so training and transition are recommended," said Chan Kwok-fai, head of the research group at the Labour and Welfare Bureau, at a related press conference. Secretary for Labour and Welfare Chris Sun Yuk-han made clear that in response to the job reshaping brought by AI, the Hong Kong SAR government will formulate targeted measures. In addition to strengthening retraining mechanisms and providing flexible skills conversion courses for middle-aged and older employees, it will also strengthen employment support for young graduates, using a multi-pronged approach to help workers at all levels "equip themselves" and jointly step into the new AI era.

What work will Hong Kong undertake to help relevant people find or regain employment? Where does the uneven hot-and-cold employment situation come from? Skills mismatch and expectation gaps are the current reality of Hong Kong's labor market. How to strike a balance between the labor shortage brought by aging and AI's replacement of jobs is regarded as a core factor affecting Hong Kong people's employment.

Between 2023 and 2025, Hong Kong's overall labor force, excluding foreign domestic helpers, edged down from 3.5 million to 3.47 million. Affected by structural factors such as population aging, even taking into account One-way Permit holders and fresh graduates entering the market, Hong Kong's labor force still recorded a significant decline during this period. Over the same period, various talent and labor importation measures effectively offset part of the decline. Without this external labor force, it is estimated that Hong Kong's overall labor force in 2025 would have been only 3.35 million. By 2028, as the population aging trend continues, even considering the aforementioned new labor supply, Hong Kong's overall labor force is expected to gradually fall to 3.4 million. Without the supplement of various importation measures, Hong Kong's labor force would be estimated to fall further to about 3.21 million by then, and the overall manpower shortage would expand substantially to 300,000.

On an overall assessment, Hong Kong's overall manpower shortage in 2028 is forecast to narrow to about 130,000, but the skills mismatch phenomenon is expected to become more prominent. So-called skills mismatch means that in most local key industries, especially innovation and technology, aviation, construction, city operations and healthcare, manpower is actually quite tight. Hong Kong has vigorously promoted higher education over the past decade or more. In 2005, about 20% of the employed population held a degree, and that has now risen to about 36%. The increased普及 of degrees has correspondingly reduced the number of technical personnel, especially in trades such as electrical workers in construction and lift maintenance.

Analyzed by occupational group, Hong Kong's manpower shortage over the next three years will be concentrated in skilled technical personnel and service and sales workers, accounting for about 60% of the overall gap. The former includes electrical and mechanical technicians/technicians, lift/escalator technicians, aircraft maintenance technicians, and skilled construction workers, while the latter includes salespersons, security guards, and cabin crew. Such jobs, which rely on interpersonal interaction and complex craftsmanship, are harder for AI to replace, but are also difficult to attract young people to enter. Among them, the median age of service and sales personnel in Hong Kong's employed population in 2025 was 46, and the median age of skilled technical personnel was 50, with 26% of them aged 60 or above, reflecting the relatively prominent aging problem in the relevant local industries.

Chan Kwok-fai also disclosed that about 30,000 to 40,000 unemployed people find it difficult to re-enter employment with their old skills, and the share of long-term unemployment of more than six months has risen from about 20% before the pandemic to 30%, mainly concentrated in catering, retail and general clerical work. According to his analysis, changes in consumption patterns have led to the contraction of traditional Chinese restaurants, and older workers find it hard to adapt to new models. For example, some Chinese chefs with 20 to 30 years of experience would rather remain long-term unemployed than change jobs, thus creating a structural manpower mismatch.

From the demand side, as Hong Kong has vigorously developed innovation and related industrial chains in recent years, this has actually imposed new requirements on the local education and workplace systems. Taking the aforementioned developing aviation and other fields as an example, in September 2025, Hong Kong SAR Chief Executive John Lee said in that year's Policy Address that Hong Kong would establish aircraft dismantling, high-value parts recycling and trading services, thereby driving the development of trade, insurance, financing, leasing and other industries, and creating new jobs upstream and downstream of the industrial chain. At the end of January 2026, with the signing of a memorandum of cooperation to establish a joint venture and develop Asia's first sustainable aircraft retirement supply chain, Hong Kong's "aircraft dismantling" business was considered to have officially entered the implementation stage. As a pilot program, the Hong Kong International Aviation Academy has established the "Hong Kong Aviation Engineering Training Centre." A relevant person at the inauguration ceremony told Caijing that its main purpose is to cultivate specialized talent to handle complex dismantling and certification processes, ensuring Hong Kong has enough manpower to become a global aviation financing, leasing and retirement center.

Benefiting from increased commodities and gold trading business, Hong Kong's financial industry has recently also seen new job types and recruitment demand, such as rising demand for wealth management client relationship managers. But the aforementioned SAR government report further analyzed AI's profound impact on the labor market, namely that as AI applications are expected to raise the productivity of related positions by 20% to 30%, the impact on two major groups is deepest. The replacement of junior work has caused suitable vacancies for fresh graduates to plunge by about 60% compared with 2022; about 70,000 middle-aged clerical support workers aged 45 to 54 across Hong Kong who do not hold a post-secondary qualification also face transition pressure.

Local graduate employment conditions are also reflecting this. For example, companies have become cautious when recruiting junior positions, causing related vacancies to fall sharply from about 80,000 in 2022 to about 31,000 in 2025, a decline of more than 60%. From June to August this year, the local youth unemployment rate for those aged 15 to 24 was 14.4%, higher than the usual level of about 10%.

How to find employment and re-employment? Data from the Hong Kong Productivity Council shows that in 2025 more than 70% of local employed people use AI tools in their daily work, and more than 90% of enterprises plan to integrate AI into their workflows, with personal productivity expected to rise by 20% to 30%. Affected by this, within the next three years, the daily duties of 20% to 30% of local positions will "undergo major transformation," with clerical staff and associate professionals more highly affected by AI. Taking the quality and efficiency improvement of the local financial industry as an example, many related institutions are also actively adopting generative AI solutions. Liao Jiayu, chief operating officer of Hong Kong's Legacy Trust Company, recently told Caijing that over the past one to two years the implementation of large language models has significantly accelerated the automation process in Hong Kong's financial industry. "Our self-developed system can shorten traditional administrative processes by 40%. This kind of change is releasing junior manpower from highly repetitive back-office functions."

Apart from the aforementioned clerical positions that will accelerate toward restructuring, Hong Kong enterprises currently still mainly absorb the aforementioned AI impact through natural attrition, and the risk of large-scale layoffs in the short term is considered low. At the same time, market demand for new types of AI experts continues to increase. Taking composite talent with AI application and cross-disciplinary capabilities as an example, Hong Kong currently has only about 4,000 AI practical expert talents, accounting for only 0.1% of total employment. It is expected that within three to five years, local potential demand for such expert talent will rise to about 20,000.

The Labour and Welfare Bureau pointed out in response that in the face of the technological wave, Hong Kong's labor force must actively upgrade and transform, and mastering human-machine collaboration will become a basic skill, while soft skills that AI cannot replace, such as interpersonal communication, critical thinking and problem-solving, will remain the core of competitiveness. The bureau's four core response deployments are also carried out accordingly. In addition to continuing to advance "AI for all," they also include guiding the mastery of "human-machine collaboration" and cultivating "human-only" skills.

In this process, local training will be Hong Kong's "main battlefield" for responding to AI's impact on employment. For example, in response to the job-hunting difficulties that fresh graduates may face, the Policy Address recently announced by the SAR government proposed that Hong Kong will launch 30,000 youth jobs and internship schemes, with the government subsidizing part of employers' salaries and encouraging enterprises to create about 10,000 six-month full-time positions, so that inexperienced young people can first obtain a workplace entry ticket. "Young people have certain AI skills but lack opportunities. This plan aims to help them successfully transition through these few years," Chan Kwok-fai said.

In addition to strengthening employment support for fresh graduates, Chris Sun further stressed that the SAR government will strengthen retraining mechanisms, provide flexible skills conversion courses for middle-aged and older employees, and explore ways to encourage employers and employees to retrain while remaining in their original jobs. For example, for middle-aged transition, the Hong Kong SAR government's Employees Retraining Board currently offers employment-linked courses in caregiving, plumbing and electrical maintenance, and airport operations. Starting in November this year, it will also launch brand-new AI courses, and over the next two years launch more than 200 free AI training courses. Related work has also been noted as still having room for improvement, such as adopting an outcome-oriented approach.

Overall, Hong Kong academics suggest that the SAR government should further refine the implementation methods of related training, such as adopting precise subsidies by age and tier, integrating learning with practice through a practical orientation, and providing supporting assistance to address financial pressure during study. In this way, course design can be brought closer to actual job needs, and public resources can also be ensured to translate precisely into actual labor market benefits. Liao Jiayu also told Caijing that in the future Hong Kong's vocational education and training should focus on human-machine collaboration, and suggested that relevant practitioners shift from roles such as basic data processing to focusing on higher-value strategic consulting and emotional insight. "Technology is the 'co-pilot' that improves efficiency. Talent who can understand human nature and respond flexibly to change is the irreplaceable cornerstone of every industry."

The rights committee of the Hong Kong Federation of Trade Unions told Caijing that it hopes the SAR government will actively help workers upgrade and transform, and discover and release local potential labor. It suggested that the SAR government launch tiered AI application training courses, with grassroots workers focusing on practical operations and advanced practitioners focusing on deep application. It supports the SAR government in continuing to advance "AI for all" and supporting lifelong learning, ensuring that the labor force's skills align with Hong Kong's future economy. In the long run, the SAR government must formulate forward-looking human resources planning, prioritize releasing the potential labor of local women, middle-aged and older people, and youth, strengthen vocational education and training, promote industry improvement in pay and employment quality, and establish a systematic promotion ladder. "We hope the SAR government will help workers at all levels equip themselves and jointly step into the new AI era, so that technological progress benefits every worker," the rights committee of the Hong Kong Federation of Trade Unions said.