Hong Kong’s manpower gap narrows, but AI squeezes entry-level and clerical roles

Hong Kong’s projected manpower shortage has eased, but AI is reshaping the city’s labour market in ways that hit fresh graduates and middle-aged clerical staff hardest.

A mid-term update to the city’s manpower projection, released by the Labour and Welfare Bureau (LWB), puts the overall shortage at around 130,000 workers by 2028. The previous round, published in 2024, had forecast a gap of about 180,000. The bureau credited talent admission and labour importation schemes rolled out over the past three years, as well as economic restructuring and AI adoption, for moderating growth in demand for workers.

The easing has not been even. Innovation and technology, aviation, construction, city operations, and healthcare services remain tight, and about 60% of the overall shortfall is in skilled technical workers and services and sales workers. These roles depend on interpersonal interaction and complex craftsmanship, making them harder for AI to replace, but an ageing workforce and difficulty attracting young entrants continue to leave gaps.

Clerical work is heading the other way. As organisations expand their use of AI for routine administration, clerical support workers are projected to be in surplus by 25,000 to 30,000 by 2028.

The report estimates that AI adoption in applicable roles will increase individual productivity by 20% to 30%, and that a similar share of positions, mostly clerical, will face restructuring. For now, organisations are managing the transition largely through natural attrition, and the bureau sees the short-term risk of large-scale layoffs as relatively low.

Two groups are identified as most exposed. Job vacancies suitable for fresh graduates have fallen by about 60% compared with 2022, as entry-level positions are displaced. Some 70,000 clerical support workers aged 45 to 54 without post-secondary education are also under pressure to transition. At the same time, demand is growing for what the report calls “composite talent”, meaning workers who pair AI application skills with sector-specific knowledge.

Behind these shifts is a shrinking local workforce. Hong Kong’s labour force, excluding foreign domestic helpers, fell from 3.50 million in 2023 to 3.47 million in 2025. Without workers brought in through admission schemes, the bureau estimates the labour force would have stood at just 3.35 million. By 2028, the labour force is projected to fall to around 3.40 million. Without those schemes, it would drop to about 3.21 million, and the shortage would widen to roughly 300,000.

READ MORE: Employees in Hong Kong are among the world’s heaviest users of AI. Most have never been trained to use it.

Secretary for Labour and Welfare Chris Sun said the admission policies had “effectively stabilised the labour force”, although demand in certain industries remained acute.

He said the government would strengthen retraining mechanisms, offer flexible skill-conversion programmes for older and middle-aged employees, and step up employment support for young graduates. It will also explore incentives for employers and employees to take up on-the-job retraining.

Looking ahead, the report names proficiency in human-machine collaboration as a basic competency, with soft skills such as interpersonal communication, critical thinking and problem-solving remaining central to competitiveness.