Amid an overall labor shortage caused by an aging population, Hong Kong enterprises are currently mainly absorbing the impact of AI through natural attrition, aside from clerical positions that will accelerate toward restructuring. The SAR government is not only actively planning to help inexperienced young people obtain entry tickets to the workplace, but will also provide flexible skill 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 considered the main source of local white-collar jobs will continue to be in surplus, with fresh graduates and middle-aged clerical workers being the main groups affected. This assessment of Hong Kong's manpower situation over the next three years comes from the latest mid-term update report on manpower projection recently released by the Labour and Welfare Bureau of the Hong Kong SAR government. In view of the rapid spread of AI and the rapidly changing economic environment, the bureau has carried out relevant update work since 2025 in order to keep pace with market dynamics and respond quickly with policies.

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 face labor shortages, with the construction sector being the most severe. At the same time, local clerical support staff are instead expected 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 staff aged 45 to 54 without tertiary qualifications face pressure to transition.

"As the baby boomer population gradually retires, 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 will eventually be completed, and training for transition is recommended," said Chan Kwok-fai, head of the Research Group of the Labour and Welfare Bureau, at a related press conference. Secretary for Labour and Welfare Chris Sun Yuk-han explicitly stated 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 skill conversion courses for middle-aged and older employees, it will also strengthen employment support for young graduates, helping workers of all levels "equip themselves" through multiple approaches and jointly step into the new AI era.

What work will Hong Kong carry out to help relevant people find employment or re-employment? What causes the uneven hot and cold in employment? Skill 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 considered a core factor affecting Hong Kong people's employment.

Between 2023 and 2025, Hong Kong's overall labor force, excluding foreign domestic helpers, slightly declined 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 decrease during this period. During the same period, various talent and labor import 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, due to the continued trend of population aging, even considering the aforementioned new labor force, Hong Kong's overall labor force is expected to gradually decline to 3.4 million. Without the supplement of various import measures, Hong Kong's labor force is estimated to further decline to about 3.21 million by then, and the overall manpower shortage would expand substantially to 300,000.

On an overall basis, Hong Kong's overall manpower shortage is forecast to narrow to about 130,000 in 2028, but the phenomenon of skill mismatch is expected to become more prominent. So-called skill mismatch means that most local key industries, especially innovation and technology, aviation, construction, city operations, and healthcare, are actually quite tight on manpower. Hong Kong has vigorously promoted higher education over the past decade or more. In 2005, about 20% of the employed population held degrees, and this has now risen to about 36%. The increased popularity of degrees has correspondingly reduced the number of technical personnel, especially in trades such as electrical and mechanical workers in construction and elevator 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 personnel, accounting for about 60% of the overall gap. The former includes electrical and mechanical technicians/technologists, lift/escalator technicians, aircraft maintenance technicians, and skilled construction workers, while the latter includes salespersons, security guards, and cabin crew. These types of jobs, which rely on interpersonal interaction and complex craftsmanship, are harder to replace by AI, but at the same time are also difficult to attract young people to enter. Among them, the median age of service and sales personnel in Hong Kong 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 notable 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 old skills, and the proportion 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 staff. According to his analysis, changes in consumption patterns have led to a contraction of traditional Chinese restaurants, and older workers find it difficult 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, it has actually also 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 Ka-chiu pointed out 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 and ensure Hong Kong has enough manpower to become a global aviation financing, leasing, and retirement center.

Benefiting from the enhancement of 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 productivity in relevant 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 staff aged 45 to 54 across Hong Kong without tertiary qualifications also face transition pressure.

Local graduate employment conditions are also reflecting this. For example, enterprises 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 decrease 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 general 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 used AI tools in their daily work, and more than 90% of enterprises planned to integrate AI into their workflows, with personal productivity expected to increase 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 changes," with clerical staff and associate professionals being more affected by AI.

Taking the quality and efficiency improvement of Hong Kong's financial industry as an example, many relevant institutions are also actively adopting generative AI solutions. Liu Jiayu, chief operating officer of Hong Kong-based 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 of Hong Kong's financial industry. "Our independently developed system can shorten traditional administrative processes by 40%. This transformation is releasing junior manpower from highly repetitive back-office functions."

Aside from the aforementioned clerical positions that will accelerate toward restructuring, Hong Kong enterprises currently still mainly absorb the impact of AI 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 practical AI expert-type 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 that in the face of the technological wave, Hong Kong's labor force must actively upgrade and transform, mastering human-machine collaboration will become a basic skill, and soft skills that AI cannot replace, such as interpersonal communication, critical thinking, and problem-solving ability, will remain the core of competitiveness. The bureau's four core response deployments are also launched accordingly. In addition to continuing to promote "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 the "main battlefield" for Hong Kong to cope with 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 positions and internship programs, with the government subsidizing part of employers' salaries to encourage enterprises to create about 10,000 six-month full-time positions, allowing inexperienced young people to first obtain entry tickets to the workplace. "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 Yuk-han further emphasized that the SAR government will strengthen retraining mechanisms, provide flexible skill 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 Employees Retraining Board of the Hong Kong SAR government currently provides job-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 will launch more than 200 free AI training programs.

Related work is also noted as still having room for improvement, such as adopting outcome-oriented approaches. 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 precisely transformed into actual labor market benefits.

Liu Jiayu also told Caijing that the focus of Hong Kong's future vocational education and training should shift toward 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 changes is the irreplaceable foundation of every industry."

The Rights and Interests 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 in-depth applications. It supports the SAR government in continuing to promote "AI for all" and support lifelong learning to ensure that the skills of the labor force align with Hong Kong's future economy. In the long run, the SAR government must formulate forward-looking human resources planning, give priority to releasing the potential labor of local women, middle-aged and older people, and youth, strengthen vocational education and training, promote industry improvements in pay and employment quality, and establish a systematic promotion ladder.

"We hope the SAR government will help workers of all levels equip themselves and jointly step into the new AI era, so that technological progress benefits every worker," the Rights and Interests Committee of the Hong Kong Federation of Trade Unions said.