Hong Kong’s HR dilemma: Can technology and empathy coexist in the race for talent?

As the business world undergoes a sweeping digital transformation, the role of HR has been redefined from back-office support to a core driver of strategy, leadership, and value creation. Nowhere is this shift more apparent than in Hong Kong, where economic uncertainty, talent migration, and rapid technological change are challenging HR leaders to innovate or risk falling behind.

“HR has undergone a remarkable evolution over the past two decades, shifting from an administrative function to a strategic powerhouse that drives business outcomes,” Rita Tsui, President of AsiaHRM and a seasoned HR executive with over 25 years of experience across Asia-Pacific, told HRM Asia.

The shift in HR’s influence is underscored by three defining developments: data-driven decision-making, enhanced employee engagement, and the integration of digital and AI technologies.

“HR leaders now leverage AI-powered analytics to forecast talent needs, assess engagement, and tailor retention strategies,” Tsui explained. “Predictive models help reduce turnover and improve workforce planning.”

This data-centric approach is complemented by a renewed focus on employee experience. “Organisations that invest in culture, wellbeing, coaching, and psychological safety see higher engagement with lower attrition,” she added. “In Hong Kong, flexible work arrangements and personalised benefits are key priorities for talent retention.”

A cornerstone of this enhanced employee experience is the adoption of a collaborative, coaching-based leadership style. Tsui, a strong advocate for coaching, believes it is vital for engaging the modern workforce, particularly Gen Z. She shared an anecdote to illustrate its impact.

“I recall an HR director sharing a powerful story about the impact of a single question. He casually asked his colleague in the pantry how long she planned to stay in her current role. This simple question sparked her reflection on her career path, leading her to pursue personal growth. As a result, she was recently promoted to a senior position,” she said. “Coaching skills—such as effective questioning—empower individuals to find their own solutions, ultimately transforming their careers and lives.”

For HR leaders to succeed in this new paradigm, Tsui identified several indispensable competencies: profound business acumen to align HR with financial goals, digital fluency to leverage technology, expertise in change management, and a deep commitment to leadership development through a coaching culture.

Navigating Hong Kong’s crossroads

Hong Kong’s HR landscape is at a critical juncture, shaped by a confluence of talent shortages, economic shifts, and evolving employee expectations. A significant challenge is the critical talent gap in high-growth sectors. “Hong Kong’s job market faces critical gaps in finance, ESG, and tech, requiring organisations to upskill existing employees instead of relying on external hires,” Tsui explained, referencing reports that pinpoint shortfalls in professionals with cross-disciplinary expertise in areas like green finance and digital transformation.

READ MORE: Doing more with less: Employers in Hong Kong rethink benefits as costs soar

This talent crunch is occurring amid an economic climate of uncertainty, which has heightened the importance of job security. The 2024 Randstad Employer Brand Research found that while salary remains important, financial stability has become increasingly important to employees.

Furthermore, the demand for flexible work models remains a defining feature of the post-pandemic era. A 2024 Morgan McKinley survey revealed that 80% of professionals in Hong Kong prefer hybrid or remote work. However, a disconnect persists, with many organisations pushing for a return to the office. “Organisations that fail to adapt risk losing top talent to competitors that offer remote-first policies,” Tsui warned.

In response, leading organisations in Hong Kong are innovating. They are heavily investing in upskilling and reskilling, with a LinkedIn report indicating that 60% of job skills will change by 203, a transformation accelerated by AI. Organisations are also leveraging technology to create a personalised employee experience, using digital platforms to offer customised career paths and real-time feedback. Finally, a strong focus on employer branding and leadership engagement is proving crucial for attracting and retaining talent in a competitive market.

The acceleration of technology, particularly AI, is profoundly impacting talent management. Tsui emphasised that the goal is not to replace the human element but to augment it. “Despite the rise of automation, leading organisations in Hong Kong are embedding empathy and inclusivity into their digital HR systems,” she said.

In talent acquisition, AI is being used to analyse candidates holistically, reducing unconscious bias and improving the quality of hires. For leadership development, AI-driven coaching platforms are creating personalised growth plans for emerging leaders. Crucially, technology is also being deployed to monitor and enhance employee wellbeing. “HR teams are using AI-powered sentiment analysis tools to monitor employee morale in real time,” Tsui shared. “This allows HR to intervene proactively with tailored wellness programmes, coaching support, or workload adjustments—fostering a culture of care and responsiveness.”

A glimpse into the future at CHRO Hong Kong 2025

Looking ahead to the upcoming CHRO Hong Kong 2025, organised by HRM Asia, Tsui plans to delve deeper into these themes, championing a future where HR leadership is defined by collaboration and empowerment.

“One of the key themes I will emphasise is collaborative leadership—how HR leaders can shift from traditional directive models to empowering, inclusive leadership that fosters innovation and engagement,” she revealed. “In an era where AI and automation are reshaping workplaces, the human side of leadership becomes more critical than ever.”

She hopes the event will spark critical conversations on HR’s strategic role, the intersection of technology and humanity, and the future leadership strategies that will keep organisations in Hong Kong agile and people-focused.

For Tsui, the conclusion is clear: the future of HR in Hong Kong and beyond lies in a delicate balance. It requires leaders who can embrace digital innovation and strategic thinking while remaining steadfastly committed to a human-centric approach. As she concluded, “Organisations that invest in AI-powered talent strategies while nurturing personalised employee experiences will be at the forefront of future-ready workforce development.”

CHRO Hong Kong will take place from 29-31 July 2025 at Cordis. To find out more about CHRO Hong Kong 2025, click here.