How financial institutions can overcome the booming demand for ESG roles

HR BRIEFING How financial institutions can overcome the booming demand for ESG roles

Data from portal Indeed showed that ESG job offers in Hong Kong soared 442% in 2022.

Companies struggle to fill their ESG roles because some refuse to seek help from recruitment agencies

Hong Kong’s finance sector has never been truly invested in the environmental, social, and governance (ESG) piece, according to HR expert Steve Parkes. “Strong ESG people” across the globe, who could have been considered to fill the roles are already less interested in Hong Kong for reasons like politics and the city’s pandemic response.

“There’s not enough talent. I don’t think the market was prepared for the quantity of people that was going to be required,” said Parkes, Senior Partner at Page Executive Hong Kong. According to portal Indeed, ESG job offers in Hong Kong soared by 442% from April 2021 to April 2022.

To strengthen Hong Kong’s weak pipeline of ESG talent, Parkes suggested that companies do not necessarily need to hire employees specifically with ESG-focused. Instead, they can look for individuals who are familiar with looking into the risk profile of a business.

Parkes said companies can also take current talent and upskill them. They should start asking whether they have employees who can take on the ESG responsibility.

“ESG has certain components, be it risk or compliance related. Oftentimes, people in these capacities are then shifting into an ESG role from an internal perspective,” said Parkes.

The harder way for Hong Kong to address the issue of the widening gap between demand and supply of ESG talent is to “home grow,” which will be up to the universities, said Parkes.

Unable to fill roles

Apart from lack of talent, companies struggle to fill their ESG roles because some refuse to seek help from recruitment agencies given its cost.

“I review job boards on a regular basis, whether that be what’s being posted on LinkedIn, Jobs DBE, Financial Careers. It’s interesting to see the repetition in which organisations are posting the role, which leads you to believe they’re not filling them; hence, the role continues to be recycled until they find the right talent,” the HR expert said.

Currently, most ESG jobs offered in Hong Kong are coming from accounting and consultancy firms, as well as financial services firms.

This was echoed by Wisely Wong, Business Director at Hays, adding that accounting firms like the Big 4—EY, KPMG, Deloitte, and KPMG—are expanding ESG hiring actively in Hong Kong “in response to the increased requirements from corporates and institutions who are facing tougher reporting rules.”

In April 2022, Deloitte even announced that it will “offer a robust curriculum of sustainability training courses to all 345,000 professionals along with its clients and suppliers.”

More than a compliance

Compliance regulation being the main driver for most companies when making ESG decisions, as stated by a PwC study, is worrying and concerning, according to the Page Executive expert.

“There’s a term being used called greenwashing, meaning organisations are painting a very pretty picture of either what they have internally, or what they’re doing, from a financial perspective,” Parkes said.

“Right now, we’re starting to see progress in organisations, but what’s the longevity of this?

What’s the sustainability of this? What is the true rationale for it? Are we truly trying to make our world a better place? Or are we just doing it to fill up a certain corporate void?” he added.

Wong, for his part, added that the benefits of assigning ESG specific roles goes beyond compliance of regulatory requirements.

According to Wong, creation of ESG roles will also leave a positive impact on the labour market.

“More roles will be created with more opportunities to come. For example, the front office would require more coverage bankers with relevant sustainability knowledge to step up the game in order to further educate ESG knowledge to their customers,” Wong said. “There will also be an increase in issuance of Green Bonds, leading to an increased demand for investment bankers with sustainable finance experiences. Research analyst and data analyst will also be sought after as climate change and other sustainability factors will require data and studies to value investment projects. Risk experts would also be needed to further verify and value these investment projects,” he added.

The market was not prepared for the quantity of people that was going to be required

Steve Parkes

How Tencent leverages digital technology to strengthen HR management and enterprise agility

Tencent’s approach is to implement a “strategy digitisation”and“service productization” strategy in HR management.

Tencent Holdings Ltd

The COVID-19 pandemic imposed tremendous challenges on global businesses, including supply chain disruption, the maintenance of normal business operations, as well as employee management under remote working scenarios.

As the pandemic gradually eases in 2022, more and more companies around the world are starting to embrace digital transformation. On the one hand, digital technologies have been proven to increase enterprise agility and prepare companies for the next black swan event. On the other hand, enterprises empowered by digital technology are believed to be in a better position to capture emerging industry opportunities. What Tencent has done may shed light on how companies can utilise digital technology to strengthen their human resource management and boost enterprise agility.

Living in the digital age, it is imperative for company management to be able to quickly understand changes and make swift strategic transformation decisions. It is also necessary to ensure that employees have the ability to adapt to development shifts in the digital age and follow management decisions to rapidly promote business-level transformation.

This requires enterprises to establish a scientific and efficient digital system to meet the new human resource management challenges brought about by the digital age, which can be translated into the adoption of “strategy digitisation” and “service productization.” By doing so, enterprises can embed data-based thinking into their strategic decision-making and subsequent implementations while efficiently aligning action plans between senior executives and regular employees.

In addition, the productisation of HR services can also improve the timeliness and coverage of internal strategy communications and help to dynamically maintain a healthy talent structure at an organisational level, such as by designing specific training to enhance employees’ skillsets and putting talented people in more suitable positions.

A comprehensive HR strategy Based on research conducted by a team from Guanghua School of Management, Peking University, and researchers in Tencent Social Research Center and Tencent HR Technology Center, Tencent’s approach was to build a comprehensive data and analysis system, and implement a “service productization” strategy in HR management, so that senior executives can have access to better data to assist them with strategy and HR management decision making, and also ensure the accuracy and efficiency of strategy formulation and execution. At the same time, taking employees as users and transforming different modules of HR services into digital products can help employees increase their efficiency in the workplace, and gain necessary work skills that they don’t already have.

Tencent built a human resource data management system internally and, on its basis, further built out a data-based strategic decision-making mechanism. The company set up a management committee to oversee HR data governance. By centralising talent with data management and at the same time matching business demands with employees’ strengths through a talent indicator program, internal operational efficiency and cross-team collaboration were greatly enhanced. Through this centralised data governance mechanism, supplemented by the identification of talent deficiencies, digital tools equip employees with action guides and targeted training that better match seniorlevel strategies, which are then transformed into efficient and agile strategy execution. Tencent’s goal management system was a great example of implementing the strategy of “service productization.” In the early “customer engagement” process, Tencent noticed that employees attached great importance to the timing of different action goals. However, many employees also had difficulties aligning their own goals with organisational ones. After a revamp and upgrade, the new goal management system allows employees to communicate and update their action goals from time to time through an automatic QA system, which also allows members of one team access to each other’s plans. The resulting instant and personalised feedback can greatly improve employees’ sense of participation and enthusiasm. At the same time, the optimisation system makes individual goals visible among employees in one team, so that they can better align their goals with the broader team and, furthermore, with the whole company. Additionally, in order to refresh the process of internal knowledge sharing, Tencent established an “expert” platform for employees to exchange and learn. The platform recruits experienced employees who are willing to share knowledge and provide knowledge sharing to colleagues in need, which improves the efficiency of knowledge input in learning and sharing. Teams and personnel can share open and productive conversations internally, facilitating the personal growth of employees as well as the development of the entire organisation.

TENCENT BUILT A COMPREHENSIVE DATA AND ANALYSIS SYSTEM, AND IMPLEMENT A “SERVICE PRODUCTIZATION” STRATEGY IN HR MANAGEMENT, TO ENSURE THE ACCURACY AND EFFICIENCY OF STRATEGY FORMULATION AND EXECUTION