Exploring Contingent Employment Policy in IT – Impacts upon IT Project Management Capabilities Enhancement in Large Hong Kong Organisations A thesis submitted in partial fulfilment of
Introduction
Introduction
This chapter provides an overview of the thesis background, emphasizing its significance and the key research proposition It outlines the scope, objectives, and research questions guiding the study, along with a summary of the research design, including methods and processes The chapter also discusses the expected contributions of the research and potential limitations Additionally, it concludes with a detailed report structure to help readers effectively navigate the thesis.
Background of the Research
The role of the IT (information technology) professional is becoming strategic for organisations, and it is becoming more common-place for IT project managers to have seats in board-room meetings (McLean, 2006, p 36)
IT is increasingly vital to the strategic success of modern businesses, with large Hong Kong organizations relying heavily on IT to enhance internal and external connectivity and strengthen their competitive advantage (McLean, 2006; CENSTATD, 2011a) Consequently, organizations have a clear demand for robust IT and IT project management capabilities to ensure effective implementation and alignment with business goals (Dwyer, 2009; eWeek, 2007; Holland, Hecker & Steen, 2002; Newswire, 2007).
In recent years, companies have increasingly valued contingent workers as vital assets, reflecting a shift in human resource strategies Simultaneously, the global trend of contingent employment on IT projects has been growing rapidly and is expected to continue expanding The rise in contingent employment arrangements has become one of the most significant HR trends of recent times, highlighting the evolving nature of the modern workforce (Belous, 1989; Marler, Barringer & Milkovich, 2002; Peel & Inkson, 2004) These dual phenomena have also been observed by researchers as key indicators of changes in employment practices.
The researcher, with nearly 20 years of experience in IT project management within large Hong Kong organizations, has observed the increasing reliance on contingent IT workers for projects Notably, during a project led by the researcher, over 80% of the team comprised contingent workers, raising concerns about project risks and organizational knowledge retention amid high turnover rates The researcher empathizes with contingent workers’ frustrations due to the lack of job security and future commitment, which hampers organizational learning and knowledge transfer (Ng, 2008; Chapter 5) Based on personal experience, prior research, and insights from Hong Kong IT practitioners, it is suspected that contingent employment drainage impairs organizational IT project management capabilities, potentially threatening organizational survival in competitive markets This background motivated the formulation of this research: “Exploring contingent employment policy in IT—impacts upon IT project management capabilities in large Hong Kong organizations,” focusing on three core themes: IT project management, contingent employment, and capability enhancement.
Significance of the Research
Hong Kong aims to transform into a knowledge-based economy, with its IT industry playing a pivotal role in achieving this goal (CENSTATD, 2011a) To succeed, the sector must continuously elevate its knowledge level and innovation capacity Over the past decade, the value added by Hong Kong's IT industry has increased by 99%, highlighting its significant contribution to the city's economic development and technological advancement.
Between 1998 and 2008, the industrial sector in Hong Kong experienced rapid growth, with its expansion rate exceeding three times that of the overall gross domestic product (GDP) (CENSTATD, 2007, 2009b, 2011b) Despite accounting for only 3.3% of total employment, this sector remains a significant part of Hong Kong’s economy due to its contribution to economic development.
The increasing importance of the IT role in organizations is a key trend in the Hong Kong IT sector, highlighting its impact on boosting productivity and accelerating change IT drives faster economic growth while also fostering globalization and heightened competition in the global economy However, the rapidly evolving nature of the industry presents significant challenges for organizations to remain competitive and adapt effectively in this dynamic sector.
In today’s rapidly evolving knowledge economy, where information doubles every seven to ten years (Burns, 2002), continuous learning is essential for all professionals, including project managers (McLean, 2006) Project management skills are increasingly in demand in this new economic landscape, especially as technology organizations shift toward project-based structures (T Sullivan, 2008; Barley & Kunda, 2004; Devine, 2011) In fast-paced, international environments like Hong Kong and within the dynamic IT sector, leading as a Chief Information Officer (CIO) presents significant challenges, requiring adaptive leadership and up-to-date expertise to navigate constant technological and market changes.
IT groups are essential for delivering IT projects that drive organizational success However, Hong Kong CIOs face persistent challenges such as "cost pressure," where organizations aim for "less for more" in IT investments (Gartner, 2012; Hammond, 2011; Staff, 2009), and a "never-ending workforce skill shortage" that hampers IT capabilities (Chan, 2009; Staff, 2012; Wan, 2012) These issues remain constant over time, complicating IT management and strategic planning (see Section 2.2.2).
Hong Kong CIOs are increasingly adopting strategies such as engaging contingent IT workers to meet growing IT demands amid cost and skill challenges Hiring contingent workers provides organizations with on-demand expertise without long-term commitments, reducing benefits and training costs (Allan & Sienko, 1998; Barley & Kunda, 2004d) Contingent workforce types include independent contractors, temporary, part-time, leased, self-employed, and agency-sourced workers, commonly used in Hong Kong In addition to in-sourcing, CIOs also focus on outsourcing, integrating with mainland China’s IT industry, and deploying cloud computing solutions to obtain cost-effective, flexible IT capabilities (Section 2.3) External vendors such as outsourcing firms, off-shore providers, and cloud services drive the contingent employment trend, aiming to deliver advanced technological skills under budget constraints Reports indicate that demand for temporary IT staff is projected to surpass permanent roles, with contingent employment expected to grow three times faster than overall employment within the next decade (Newswire, 2007; eWeek, 2007) Despite limited official data, it is anticipated that Hong Kong’s global competitive environment will further accelerate this trend in IT staffing.
Contingent employment offers a potential solution to the challenges of a dynamic economy and evolving IT landscape, yet it raises important questions about skill acquisition and career development, as many organizations do not support the career growth of contingent workers (Peel & Inkson, 2004; J Sullivan, 2004) Not all contingent workers possess the self-motivation or skills necessary to manage their careers effectively, with young workers often struggling to find mentors and coaches essential for developing into mature project managers (Huemann, Turner & Keegan, 2007; Kerzner, 2009), while older workers may feel frustrated and lose passion for their roles From an organizational perspective, new project management skills such as vendor, contract, and distributed workforce management are increasingly in demand, raising questions about core competencies and how to retain them in-house when relying heavily on external human capital (Ma, 1999; DeFillippi & Arthur, 1998) This research aims to explore how IT project management capabilities in large Hong Kong organizations are impacted by contingent employment models and to address the critical question of how these organizations can build and sustain core competencies within a project-based, gig economy framework.
Research indicates that Hong Kong’s IT industry and project management organizations are increasingly focused on enhancing project management capabilities while expanding the use of contingent employment for IT project participants, including project managers However, a comprehensive review of existing literature reveals limited research specifically addressing IT project management capabilities within the context of contingent employment, despite extensive studies on each core theme separately—IT project management, contingent employment, and capability enhancement Most available research in IT project management and capability development tends to exclude the contingent employment setting, and scholars acknowledge challenges in collecting statistical data on contingent workers in this field (Barley & Kunda, 2004; Low, 2002; Webster, 2005) This reveals a significant gap in the literature, highlighting the absence of integrated research connecting these three themes and underscoring the need for further investigation into how contingent employment influences IT project management capabilities.
This research is rooted in the researcher's personal experience and addresses a significant knowledge gap identified through a literature review It aims to explore how contingent employment policies impact the capability enhancement of individuals and organizations in IT project management within large Hong Kong companies The findings offer valuable insights into how contingent workers and organizations can better prepare for the growing trend of contingent employment and the ongoing need for knowledge development in Hong Kong Additionally, this study helps to fill existing research gaps and encourages further scholarly investigation in this area.
Research Proposition
In a knowledge-based economy, Hong Kong organizations need to continuously enhance their IT project management capabilities to achieve business success through strategic IT solutions However, intense competition, especially following the 2008 global financial crisis and the recent Europe debt crisis, has led many Hong Kong firms to increasingly rely on contingent IT professionals, including project managers, to meet specific organizational needs These contingent employees are typically not provided with training or development investments and lack incentives to share their knowledge, making it difficult for organizations to retain and synthesize valuable project insights once these workers leave While organizations can acquire essential skills from temporary staff to complete IT projects, maintaining and integrating the knowledge generated remains a significant challenge in the contingent workforce model.
1998) Long-term organisational competitiveness may be adversely impacted if organisational IT project management capabilities cannot be enhanced Therefore, this research proposition is that:
Contingent employment policy has an adverse impact on individual and organisation learning and causes a decrease in IT project management capabilities in large Hong Kong organisations.
Research Scope and Objectives
Successful project management is based, on one hand, on accumulated knowledge and, on the other hand, on individual and collective competences (Love, Fong & Irani, 2005, p xiv)
This study investigates how contingent employment policies in the IT sector influence the enhancement of project management capabilities within large organizations in Hong Kong IT, as defined in this research, includes methods and techniques for handling, transmitting, and retrieving information through automatic means such as computing, telecommunication, office automation, and industrial automation IT project management capability refers to an organization’s ability to effectively perform IT project management activities Contingent employment encompasses workers without explicit or implicit contracts for indefinite employment, including temporary or freelance staff A large Hong Kong organization is classified as a manufacturing company employing 100 or more people or a non-manufacturing business with at least 50 employees in Hong Kong Understanding these definitions helps clarify the impact of flexible workforce policies on IT project management performance in the region.
Ultimately, this thesis tries to achieve five research objectives; they are:
1 To explore the importance of continuous enhancement of IT project management capabilities to business successes;
2 To identify and explain the contingent and permanent employment policies of IT professionals (including project managers) in large Hong Kong organisations;
3 To investigate and explain the impacts of contingent employment policies on IT project management capabilities enhancement;
4 To identify and explain the practices of enhancing IT project management capabilities as an individual, as a group and as a large organisation; and
5 To identify and present possible solutions to satisfy the needs to enhance IT project management capabilities under contingent employment practice.
Research Questions
This research highlights the lack of comprehensive studies linking the three core themes identified from the literature survey, emphasizing the need for further data collection to strengthen understanding The research questions were refined based on insights gained through a pilot interview study, which helped validate the feasibility of the research processes in real-world settings and guided the development of interview questions Combining theoretical models and themes from the literature review, the initial version of the interview questions was formulated (see Appendix B2, interview protocol v1.0) Multiple version updates were made throughout the research process to ensure relevance and accuracy, with all versions documented in Appendix B2 of this thesis.
1 What is your current role in your organisation?
2 What are your years of service in your current position?
3 What are your years of contract employment history, if applicable?
4 What are your years of work in IT industry?
5 What key IT roles you have played in you work history?
6 What is your highest education level?
7 What is your formal project management qualification, if applicable?
From the project management and employing organisation perspective:
1 What are the reasons for hiring a contingent IT professional?
2 How does contingent employment of IT professionals impact effective project management at the project and organisational level?
3 How can any identified problems associated with hiring contingent employment of IT professionals be solved?
From the contingent contract IT professional perspective:
4 What are the reasons of becoming a contingent IT professional?
5 How can IT professionals hired on a contingent employment basis gain sufficient context- related skills and experience to be effective project team members?
Three sets of questions form the above list of research questions The first set of questions is semi- structured questions that inquire about the interviewee’s working history in the organisation and in the industry, his or her education level and formal project management qualification It was answered by all participants The second and third sets of questions are open-end questions and are central to this research The second set was answered by participants ‘from the project management and employing organisation’ perspective They were at managerial positions such as CIOs, IT managers, project management office (PMO) managers, project directors, project managers or the like If the participant was not at a managerial level of the organisation, this set of questions was skipped The third set of questions was from ‘the contingent contract IT professional’ perspective and was answered by participants of all job levels except those had never been contingently employed.
Research Design
This research addresses the human aspect of how individuals and groups within organizations develop project management capabilities It specifically explores strategies to enhance IT project management skills in a contingent employment setting The study aims to build a comprehensive understanding by analyzing participants' perspectives, reporting detailed insights, and conducting research within real-world environments, aligning with Creswell’s (1998) qualitative approach to gain a holistic view of learning processes in project management.
This thesis follows Creswell’s (2003) research framework, which includes philosophical assumptions, strategies of inquiry, and detailed methods Adopting a constructivist approach, the study employs a multiple-case, comparative case study design Data collection primarily involves open-ended and semi-structured interviews, complemented by triangulation through documentation and archival records to ensure comprehensive and valid findings.
This study adopts a qualitative approach, with Chapter 4 detailing the selection of framework elements that led to the development of the research design The research process is structured into five distinct phases: Phase I – literature survey, Phase II – pilot interview study, Phase III – case studies, Phase IV – comparative analysis, and Phase V – validation, ensuring a comprehensive and systematic exploration of the research objectives.
The objectives of Phase I – literature survey were to identify data to inform the initial research design and provide theoretical foundations to support the research analysis The early literature survey focused on the exploration of the current situation and future prospect of the Hong Kong IT sector The literatures and data surveyed included the growth of the Hong Kong IT sector (CENSTATD, 2011a, 2011b), challenges faced by CIOs (Chan, 2009; Gartner, 2012; Hammond, 2011), the key trends impacting the sector (Ma, 1999; OGCIO, 2011a; Staff, 2009c, 2010a; VTC, 2010), and the IT workforce (including project managers) demand and supply situations (CENSTATD, 2012a; VTC,
This study examines the contingent workforce in Hong Kong’s IT sector and the key resource strategies employed by major organizations, drawing on recent research such as JobsDB (2012) and practices in IT project management capabilities from HKCS (2011a) and VTC (2010) The literature review focuses on three core themes: IT project management, contingent employment, and strategies to enhance IT project management skills, incorporating insights from scholars across multiple disciplines Additionally, the high failure rates of IT projects, highlighted by Kwak (2003) and supported by Standish (1995, 2009), underscore the importance of effective project management practices.
In order to understand the reasons behind the failure, it was essential to understand characteristics of
IT projects (Lientz & Rea, 2001; Sauer & Reich, 2009) and how IT project success was measured (Kendra & Taplan, 2004) In order to improve the success rate of IT projects, many scholars such as Julian (2008) and Rad & Levin (2006) had studied practices to enhance IT project management capabilities Simultaneously, literature was surveyed around the second theme - ‘contingent employment’ There were advantages and disadvantages of utilising contingent employment from both the organisation and the individual contingent worker’s perspectives (Gregory, 2001; Matusik & Hill, 1998; Redpath, Hurst & Devine, 2007) Numerous studies have touched on this aspect of contingent employment, but most of them were not IT specific In order to understand the specific characteristics of contingent IT employment, literature about contingent IT professionals (including IT project managers)(Bidwell & Briscoe, 2009; Holland et al., 2002), and why the IT sector suited contingent employment (Barley & Kunda, 2004e; Devine, 2011) were also surveyed Last but not least, the literature on the third theme – ‘enhancing IT project management capabilities’ were studied IT project management capability was not just the capability of project managers but also that of the organisation implementing the projects The ability to learn and enhance individual and organisational capabilities was found to be essential to project and business success Numerous scholars such as Turner (2003) and Ladika (2008) had researched the development of individual project manager capabilities and career paths However, in the context of contingent employment, contingent workers were likely to experience learning difficulties (Loogma, ĩmarik & Vilu, 2004; O'Donoghue & Maguire, 2005) From the organisation’s perspective, organisational learning capability to acquire IT project management knowledge is becoming critical to business success in the new economy A few three-level (individual, group or team, and organisation levels) organisational learning models (Crossan, Lane & White, 1999; Jọrvinen & Poikela, 2006; Prencipe & Tell, 2001) were studied However, learning within the organisation boundary seems to be inadequate in the context of IT project management when dynamic contingent workforce is utilised People may not stay within the organisation boundary beyond the project duration Therefore, literature surveyed had expanded to the study of social capital (DeFillippi & Arthur, 1998; Nahapiet & Ghoshal, 1998), communities in project management (Lesser, Fontaine & Slusher, 2000; Rad & Levin, 2002a; Walker & Christenson,
2005), and learning beyond the organisational boundary (Arthur, DeFillippi & Jones, 2001; Hedlund,
This thesis presents a comprehensive literature survey focused on three key research themes, with findings detailed in Chapter 3 The survey offers valuable insights and hints towards solutions within this research context, with the complete literature review methodology explained in Section 4.3.1.
1.7.1.2 Phase II – pilot interview study
Phase II is the pilot interview study The rationale behind this phase was lack of proven referential studies that link all the three core themes of this research Two organisations were selected in this phase They are typical large employers of IT workforces in Hong Kong Both organisations utilised high percentage of contingent IT staff to deliver their IT projects One of them even employed contingent IT project managers Two interviews were conducted in each organisation; the participants were IT contingent project managers and their hiring managers This phase had utilised open-ended questions to allow the information little known before the pilot interview study to emerge from the participants (Creswell, 2003; Yin, 2003) In addition to the outcomes from Phase I (literature survey), this phase’s outcome (see Chapter 5) jointly formed the first version of the interview questions (see Section 1.6) Details of the pilot interview processes can be found in Section 4.3.2 of this thesis
This study employed a multiple-case design to analyze three major Hong Kong organizations, representative of large IT employers The majority of IT professionals (68%) work within a small number of companies—specifically, 7.8% of organizations employing over 50 employees, as depicted in VTC (2010) The primary employer categories include ‘IT user organizations’ and ‘IT and communications services organizations.’ All three selected organizations meet the criteria of large Hong Kong companies, providing valuable insights into the local IT workforce A purposive sampling strategy was used to select these case study organizations, ensuring relevant and informative data collection in line with qualitative research standards.
In 2002, the study focused on representative cases classified as ordinary cases (Creswell, 1998) One organization from each employer category was selected, particularly large organizations with over 50% contingent IT workers The first case involved a public sector organization with approximately 8,000 employees, serving as a typical example of an IT user organization.
This study examines three organizations with distinct IT workforce compositions: one with 400 IT staff within a broader organization of nearly 1,000 employees in the commercial sector; another with approximately 200 employees and over 100 IT staff, also from the commercial sector; and a third organization, whose sector affiliation is unspecified, employs a low percentage (below 20%) of contingent IT workers All participants involved in the research participated in IT project management capabilities development activities, including management from IT departments or groups, human resources managers, training or knowledge management leaders, PMO managers, IT project directors or managers (both permanent and contingent), and IT project leaders.
Prior to interviewing participants from the selected case study organisations, some background information regarding the related organisations and the groups was researched as part of the triangulation process (Bryman, 2001; Creswell, 2003) Other relevant triangulation documents and archives were collected in parallel with the case study interviews These included government information, industrial bodies’ research and publications, available project management training programmes in Hong Kong and others This research adopted the theoretical sampling method suggested by Corbin (2008) to select interview participants in each case study organisation Each case study organisation was expected to have six to eight participants The researcher conducted the interviews in multiple batches One to two participants were involved in each batch With theoretical sampling as the data collection method, the previous interviews’ data impact the subsequent interviews’ participant selection and the data collection questions (Corbin, 2008) After each batch of interviews, interview summaries were prepared by the researcher Once the interview summaries were validated by individual participants, the interview data were codified and analysed Analysis was documented in the form of memos and diagrams (Corbin, 2008 Chapter 6) The initial list of concepts and sub-concepts were derived from the memos and diagrams using the open coding technique (Corbin, 2008 Chapter 9) After analysing one batch of interviews, new sets of interview questions (see Appendix B2) would be derived to support concepts identified and to collect additional data This process was repeated until only few, if any, new concepts emerged in each case study This signals data saturation (Corbin, 2008) With the completion of data analysis of all interview data batches in each case study, ‘data’ collected from triangulation documents about the case study organisations were then analysed to supplement the interview findings Each case study organisation’s data was collected and analysed as one case study and three case study reports (Chapter 6, 7 and 8) were developed Details of the case study processes can be found in Section 4.3.3 of this thesis
Following the completion of individual case studies, Phase IV involved a comprehensive comparative analysis to cross-compare the three cases, which significantly informed the overall research findings This stage examined themes and concepts across cases to identify key similarities and differences, utilizing triangulated data from various sources within the organizations The insights derived from this analysis led to potential solutions aimed at enhancing IT project management capabilities under contingent employment practices, directly addressing the fifth research objective These proposed solutions are documented in Chapter 9 and validated in Phase V, with detailed procedures of the comparative analysis outlined in Section 4.3.4 of the thesis.
Phase V – validation is the last phase of this research The purpose is to validate the findings and the solutions The researcher presented the corresponding case’s research findings and the solutions from Phase IV to at least one representative participant (with a job position as a project manager or above) from each case study organisation to provide face-to-face feedback so as to verify the researcher’s understanding and conclusions In addition, these initial case study findings were sent to the corresponding case study participants for voluntary feedback Their comments and feedback help to refine the research findings and the solutions Details of the validation processes can be found in Section 4.3.5 of this thesis
Following the completion of this phase, the case study reports (Chapters 6, 7, and 8) and the comparative analysis results (Chapter 9) were thoroughly revised The research findings were then analyzed in relation to the study's objectives to formulate the final conclusions (Chapter 10) The thesis was subsequently refined and finalized to ensure clarity and academic rigor.
1.7.2 Expected contribution and limitations of the research
Structure of the Thesis
This thesis is organized into 10 chapters, beginning with Chapter 1, which introduces the overall research It provides an overview of the research background, emphasizing its significance, along with clearly defined research propositions and objectives The chapter also highlights the research design and outlines the thesis structure, as illustrated in Figure 1.1.
Chapter 2 presents the literature relevant to the thesis’ context of large Hong Kong organisations that are major employers of IT professionals and the chapter also explores the impacts of contemporary contingent employment trend upon IT project management capabilities enhancement The chapter details the IT sector in Hong Kong and key workforce trends Chapter 3 is the literature survey chapter It details the literature survey results including literature findings on the three core themes of this research: IT project management, contingent employment, and enhancing IT project management capabilities Theories including organisational learning, individual learning, successful project management models, social capital and learning beyond the organisational boundaries that support this thesis are also presented in this chapter This chapter both informs the thesis and identifies gaps in the literature Chapter 4 describes the research strategy and method of this thesis The underpinning ontology and epistemology of this thesis are explained The data collection and data analysis processes are also detailed This chapter also provides explanation on how the quality of the research is assured and the ethical considerations in this thesis Chapter 5 describes the outcomes of Phase III – pilot interview study Prior to commencing the case studies, a pilot interview study was conducted to provide some initial data to inform the research design and set up the case study interview questions The analysis and findings from this exploratory study were documented in this chapter Chapters 6 to
8 contain the outcomes from each of the three case studies (refer to Phase III – case studies) The presentation of each chapter is a single case by itself, and the structure of each chapter is the same Section 1 introduces of the case study organisation and the participants Section 2 describes contingent employment policies and practices of the case study organisation Section 3 explains the importance of IT project management capabilities to the case study organisation’s business and IT projects Section 4 describes the impacts of contingent employment from the organisation and contingent worker perspectives Section 5 details the findings on organisational learning and project success Section 6 is about developing and maintaining social capital and Section 7 discusses learning beyond organisational boundary Lastly, Section 8 is the conclusion and thesis summary Where possible, findings are compared against the theoretical frameworks and ways are suggested to improve IT project management capabilities in the case study organisation’s context Chapter 9 presents the outcome of Phase IV – comparative analysis and Phase V the validation phase of this research It compares the similarities and contrasts the differences of the findings from the three case studies This chapter tries to generalise the practice of contingent employment of IT professionals in Hong Kong large organisations and how they enhance project management capabilities in such circumstances It tries to provide some practical solutions to practitioners of the industry on how to continue enhancing IT project management capabilities while facing the irreversible trend of contingent employment Lastly, Chapter 10 presents the conclusions of the three case studies and the comparative study It suggests further research directions to those researchers in similar bodies of knowledge
Figure 1.1: Structure of the thesis
Chapter Summary
This chapter introduces the entire thesis, offering an overview of the research background, objectives, research questions, and design It outlines the purpose and scope of the study, serving as a foundation for understanding the subsequent chapters Additionally, it provides a structural overview of the thesis for easier navigation The upcoming two chapters will present the findings from Phase I, focusing on the comprehensive literature survey.
Hong Kong IT Context
Introduction
This study focuses on large Hong Kong organizations that are primary employers of IT professionals, examining how contemporary contingent employment trends impact IT project management capabilities It provides an overview of the IT sector in Hong Kong, highlighting key industry trends and workforce dynamics to contextualize the research.
IT in Hong Kong
In Hong Kong, the terms information technology (IT), information technology and telecommunication (IT&T), and information and communications technology (ICT) are used interchangeably, with no clear distinction or universal international definition (Sin, 2008) For this thesis, ‘IT’ is defined as the methods and techniques used for information handling, transmission, and retrieval through automatic means, including computing, telecommunication, office automation, and industrial automation (VTC, 2010, Section 1.14) A ‘large Hong Kong organization’ refers to businesses that are not classified as Small and Medium Enterprises (SMEs) by the Hong Kong SAR Government; specifically, manufacturing companies employing 100 or more persons, or non-manufacturing companies with 50 or more employees in Hong Kong (CITB, 2007).
2.2.1 Knowledge-based economy and growth of IT sector
Hong Kong, being a dynamic society, is striving to become a knowledge-based economy (KBE) of the 21 st Century [ ] ICT is the key enabler of change in spearheading towards a KBE
Hong Kong's IT sector, though a relatively small business segment constituting just 3.3% of total employment in 2009, plays a vital role in the city’s transition towards a knowledge-based economy Government initiatives have highlighted the importance of IT, with the 2010 and 2012 budget speeches emphasizing promoting innovation, technology, and creativity to support industry growth The sector's value added surged by 99% from HKD39.3 billion in 1998 to HKD78.3 billion in 2008, outpacing Hong Kong’s overall GDP growth of 30% during the same period This rapid expansion indicates that the IT industry’s growth rate is more than three times that of overall GDP, resulting in a 1.7% increase in its contribution to Hong Kong's GDP, underlining its growing significance in the region’s economic development.
Figure 2.1:Value-added of IT sector vs Hong Kong GDP between 1998 and 2008
The IT sector has experienced faster-than-average growth due to its highly skilled workforce, as it is one of the most knowledge-intensive industries Employers typically prefer IT employees with relevant job experience and higher educational qualifications, such as degrees or above, as highlighted in the VTC 2010 Executive Summary This emphasis on specialized knowledge and experience contributes to the sector's rapid expansion and demand for qualified professionals.
According to the 2008 Manpower Survey Report by VTC, 57.7% of IT job positions required candidates to hold a first degree or higher qualifications, significantly exceeding the 21.1% of employed individuals in the labor market with such degrees The 2010 report by VTC confirmed this trend, noting an increase in IT sector employment from 44,847 in 1998 to 63,286 in 2005, representing a 41% growth over seven years Projected figures indicated that from 2005 to 2012, the number of IT professionals would rise by 38% to approximately 80,912 In VTC’s reports, the term ‘manpower’ is used gender-neutrally and closely aligns with the concept of ‘human resources’ in Chinese.
Figure 2.2: Manpower of IT sector (1998 to 2005) and the projected growth (2005 to 2012)
The data analysis indicates that Hong Kong's IT sector is poised for significant growth in the coming years, maintaining a consistent upward trajectory As a knowledge-intensive industry, its value addition is increasingly driven by recent government policies, such as the 2012 budget speech, which aims to support the sector's development Additionally, innovative strategies employed by CIOs to navigate challenging business environments are contributing to the sector's resilience and continued expansion.
IT trends that will be analysed later in this chapter
Leading an IT department in Hong Kong's fast-paced community presents significant challenges for CIOs, especially within the highly dynamic IT industry The rapid pace of technological change and the vibrant business environment demand strong leadership, adaptability, and strategic vision from CIOs to effectively guide their organizations' IT initiatives.
2.2.2.1 Cost pressure-less for more
Amid the global economic downturn, organizations in Hong Kong faced heightened pressure to control budgets while delivering essential IT services and products, especially during the 2008-2009 financial crisis CIOs were challenged to balance cost savings with strategic IT investments that support business growth, as highlighted by Dr Patrick Chan, who emphasized the need for organizations to invest only in IT initiatives that enable cost reduction and growth simultaneously Following a slight economic recovery in 2010 and 2011, IT employment improved; however, employment decisions remained scrutinized due to increasing role demands, and cost management continued to be a key concern, though less dominant than during the crisis Despite signs of recovery, global CIO IT budgets were projected to remain flat in 2012, with a modest 3.4% increase in the Asia Pacific region, underscoring ongoing cost pressures faced by Hong Kong CIOs.
2.2.2.2 Never-ending workforce skill shortage
Hong Kong CIOs face significant challenges due to a persistent workforce skill shortage, particularly in IT, which mirrors trends seen in advanced Western economies (Holland et al., 2002; T Sullivan, 2008) Despite economic fluctuations, IT skills mismatch remains a major obstacle for CIOs in Hong Kong, highlighting a “never-ending talent quest” within the industry (Staff, 2012) Project management emerges as the most in-demand IT skill, reflecting its critical importance in the sector (Chan, 2009; Staff, 2012) A 2012 workforce survey by the Hong Kong SAR Government underscores the ongoing demand for skilled IT professionals amid these persistent shortages.
“the government is expecting a labour shortage [ ] Some 14,000 jobs will need to be filled by the year
In 2018, the majority of job growth is expected to occur in financial services, construction, and information industries, driven by Hong Kong’s aging workforce and low birth rate This demographic trend has contributed to ongoing workforce skill shortages, posing significant challenges for Hong Kong CIOs in maintaining a skilled talent pool.
CIOs face significant challenges beyond cost and skills shortages, which are the primary focus of this discussion While these issues remain critical, the evolving IT trends present both challenges and opportunities for CIOs to address and overcome these obstacles effectively.
Key IT Trends
In analysing the key IT tends of Hong Kong, there are numerous IT practitioner or market views regarding IT trends (Garg, 2011; Gartner, 2012; Hammond, 2011; Staff, 2009b, 2009i) From the academic side, Ma’s (1999) local survey on the perceived importance of 24 critical issues of information systems (IS) management in Hong Kong is found to be the most comprehensive academic study about views of Hong Kong CIOs Ma’s (1999) study predicted a few key IT trends in Hong Kong regarding how CIOs resolved the issues In the survey, CIOs saw four issues were getting more critical by 2004 (Ma, 1999 Table 4) as compared to that of 1999 These issues include: ‘outsourcing selected information services’; ‘facilitating managing decisions and executive support system’;
Developing and managing Electronic Data Interchange (EDI) and leveraging information systems for competitive advantage are crucial for modern organizations A recent survey revealed that CIOs perceive a decreasing importance of certain issues over time, including understanding the IS role, recruiting and developing IS talent, and facilitating organizational learning These insights indicate that the Hong Kong IT sector is shifting towards recognizing the increasing strategic importance of IT within organizations, along with trends in outsourcing and contingent employment Over the past decade, these trends have become dominant in the current IT landscape Additionally, two emerging trends not identified by Ma (1999) are the integration with Mainland China and advancements in cloud and mobile computing, which will be discussed further later in this chapter.
2.3.1 Increasing importance of IT role in organisations
Ma’s (1999) survey reveals an increasing recognition of IT as a strategic asset, evidenced by rising ratings for issues like facilitating decision-making and leveraging information systems for competitive advantage Conversely, there is a decreasing focus on understanding the IS role and its contribution, indicating a shift towards strategic integration This trend aligns with Polansky et al.’s (2004) observation that CIOs are progressing from tactical roles to strategic leadership positions within organizations Additionally, McLean (2006) highlights that IT professionals are becoming more valuable assets, reinforcing the growing strategic importance of IT Supporting this, IT budgets in Asia, including Hong Kong, increased by 5.3% in 2009 despite challenging economic conditions, underscoring organizations’ commitment to IT-driven growth.
IT to improve business processes and to grow and transform the business (Staff, 2009b)
The increase in ratings for 'outsourcing selected information services' suggests a growing industrial outsourcing trend, with CIOs prioritizing outsourcing specific information services over investing in IT human resources and organizational learning Data from VTC’s manpower surveys (2006, 2008, 2010) confirm this shift, showing rapid growth in IT and communications service organizations, which now comprise a larger portion of Hong Kong’s IT workforce—rising from 40.2% to 48.8% between 2002 and 2010—while internal IT user organizations have experienced a decline.
In 2008, there was a significant 28% increase in the number of employees within the sector, as shown in VTC Figure 14 This growth sharply contrasts with the overall 5.7% expansion of the IT sector during the same period, indicating a trend towards outsourcing in-house IT functions to specialized IT and communications service organizations.
Figure 2.3: Number of IT employees by type of organisation between 2002 and 2008
Figure 2.4: Manpower of IT sector between 2002 and 2008
Between 2008 and 2010, both IT user organizations and IT and communications services organizations experienced growth in the total number of IT employees, with IT user organizations increasing slightly faster at 13.1% compared to 6.8% This trend suggests that Hong Kong’s IT outsourcing activities may have slowed during this period, or that IT user organizations had previously retrenched many IT employees between 2002 and 2008 and were now in the process of replenishing their workforce.
Hong Kong's government, as one of the largest IT users, plays a crucial role in shaping the ICT sector's growth through its significant IT expenditure To support the healthy development of the industry, the government adopts an active outsourcing strategy aimed at preserving jobs and boosting employment in the private sector.
The HK SAR Government has led the way in integrating IT outsourcing, with significant increases in annual expenditure on outsourced IT services over recent years According to surveys by the Efficiency Unit (EU, 2006, 2008, 2010), the government’s annual spending on IT outsourcing grew from 1,182 million HKD (approximately 152 million USD) in 2006 to 1,476 million HKD (about 189 million USD) in 2010, highlighting a sustained commitment to leveraging external IT services for improved efficiency and cost-effectiveness.
In 2008, government IT expenditure reached HKD 1,608 million (USD 206 million), representing 33% of the total, while in a subsequent year, spending increased to HKD 2,034 million (USD 261 million), accounting for 36% of the total (EU, 2010) Over the same period, total government IT spending grew significantly, with outsourced IT services increasing by 72% from 2006 to 2010 (OGCIO, 2011b) This substantial growth in outsourced services indicates a continuing trend towards increased outsourcing in government IT operations.
CIOs rated the importance of issues of ‘recruiting and developing IS human resources’, and
Facilitating organizational learning is identified as one of the least critical issues among the 24 IS challenges in Ma’s (1999) study This low priority may be compounded by the growing trend of contingent employment in Hong Kong’s IT sector, where employers are less likely to invest in training and development for temporary staff (Allan & Sienko, 1998; Peel & Inkson, 2004; Redpath et al., 2007) Additionally, organizations are hesitant to involve in-source contingent employees in learning activities that could risk disclosure of confidential information, company policies, or strategic plans, which may lead to potential leaks of sensitive data (MacDougall & Hurst, 2005; Matusik & Hill, 1998) As a result, CIOs tend to rank these issues as less critical within their overall IT management priorities.
The literature review revealed limited comprehensive data on the percentage of Hong Kong's IT workforce engaged in contingent employment, although practitioners have observed an increasing trend Government IT departments significantly utilize contingent workers, with figures showing that IT employees under T-contracts increased from 1,245 in mid-2008 to 1,815 in early 2012, while the number of government IT civil servants remained relatively stable, reaching 1,451 in 2012 During this period, approximately 47% of the government IT workforce was employed on a contingent basis in 2008, rising to 56% in 2012 Statistical data on private sector contingent IT employment are scarce; however, the 2009 Manpower survey indicated that over 40% of Hong Kong employers utilize contingent workers overall, although more than half of these employers do not consider contingent staff a core part of their workforce strategy.
In 2012, only 8% of Hong Kong's workforce was employed on a contingent basis, significantly lower than the 22% global average, highlighting differences in employment practices This trend will be further examined in this chapter as we analyze Hong Kong’s IT workforce in detail in Section 2.4.
2.3.4 The Mainland China integration trend
Recent trends indicate a significant increase in Hong Kong IT professionals working in Mainland China, a development not covered in Ma’s 1999 study Since the 1997 handover, Hong Kong and Mainland China have experienced substantial collaboration, bolstered by agreements like the 2004 Closer Economic Partnership Arrangement (CEPA), which provides Hong Kong firms and residents with preferential access to the Mainland market Hong Kong serves as a strategic gateway to Mainland China's IT industry, leveraging advantages such as adaptability of foreign software, cultural and language similarities, and established connections for tripartite partnerships among Mainland, international, and Hong Kong companies According to a 2006 survey by VTC, approximately 3.7% of companies deployed about 12.4% of their IT workforce—around 8,000 employees—to Mainland China to expand market access Recent government speeches highlight regional cooperation with Mainland China as vital for sustaining Hong Kong’s modernization and internationalization, fostering deeper integration with southern China to enhance market synergy The longstanding IT outsourcing trend has evolved into offshore outsourcing to Mainland China over the past decade, further facilitating cross-border collaboration Additionally, efforts are underway to promote mutual recognition of IT qualifications between Hong Kong and Mainland China, through organizations like the Hong Kong Computer Society and the Guangdong Modern Information Service Industry Association, creating opportunities for exchange and professional development.
IT workforces in Hong Kong and Guangdong (Staff, 2010a) ‘Guangdong’ is the major province in southern China The integration with Mainland China is further deepened
Cloud computing is rapidly gaining recognition in the IT industry, encompassing technologies such as virtualization, SaaS, mobile communications, and collaborative computing Although there is no universally accepted definition, industry standards are being developed to unify its implementation Hong Kong is positioning itself as a regional leader in cloud adoption, with government strategies aiming to deliver more flexible, cost-effective IT services and reduce reliance on specialized IT staff Cloud computing appeals especially to SMEs in Hong Kong, offering dynamic scalability without significant upfront investment, particularly in the wake of the 2008 economic downturn and the European debt crisis Experts believe this technology will significantly transform in-house IT operations, making the workforce more mobile and shifting the focus from internal infrastructure to externally hosted, scalable virtualized solutions, primarily managed by SaaS vendors, with technical staff mainly ensuring connectivity, security, and access.
Hong Kong CIOs are facing increasing challenges such as doing more with less, adapting to rapidly evolving business needs, and keeping pace with accelerated technological changes Additionally, a tight labor market makes it difficult to hire IT professionals with the right skills, further complicating their ability to meet these demanding objectives.
The Hong Kong IT Workforce
The IT sector in Hong Kong experienced a remarkable 167% growth in the number of firms, increasing from 5,751 in 1998 to 15,338 in 2009 The majority of IT employees (68%) work for a small number of large companies—specifically, the 7.8% of firms that have more than 50 employees Approximately 90% of IT workforce employers are small organizations Key employers in the region include IT and communications services organizations and IT user organizations, which together employed 34,764 and 38,614 workers, respectively, highlighting their significant role in the local IT employment landscape.
IT workers respectively in May, 2010 (Table 2.13) Figure 2.5 below from VTC (2010) provides a summary view of the distribution of key employers of IT employees in Hong Kong
Figure 2.5: Distribution of IT employees by sector Source: VTC (2010 Figure 1)
According to the 2009 JobsDB compensation and benefit survey report (JobsDB, 2009), the common
The analysis of IT job postings in Hong Kong reveals varying experience requirements across roles, with positions such as IT director demanding over 10 years of experience, and IT manager requiring at least 8 years Project managers are typically expected to have 7 or more years, while architects and consultants generally need 5 to 6 years System analysts usually require 4 to 5 years of experience, whereas analyst programmers and database administrators need between 2 to 4 or 5 years, respectively Entry-level roles like programmers and technical support positions often need 0 to 2 years or less Additionally, systems support/network managers and network administrators usually seek candidates with over 8 years and 2 to 5 years of experience, respectively, while network engineers require 1 to 3 years These roles are commonly advertised in Hong Kong’s IT job market, as summarized in Figure 2.6.
No of Years of IT experience 0 1 2 3 4 5 6 7 8 9 10 11 12+
Figure 2.6: IT posts and respective years of IT experiences
From the source of VTC (2010), the manpower structure by job category of Hong Kong IT employees is summarised in Figure 2.7 below
Manpower Structure by Job Category
IT Security Database General IT Manage-ment System Programm-ing
IT Sales & Marketing Telecom & Networking Field Support Operation Services IT/Software Develop-ment
Percentage of total number of IT employees 0.69% 1.03% 1.69% 5.13% 7.03% 7.82% 8.11% 10.86% 21.74% 35.90%
IT/Softw are Develop- ment
Figure 2.7: Manpower structure by job category Source: VTC (2010 Figure 2)
Approximately 30% to 45% of IT professionals are engaged in IT or software development roles, with IDC forecasting that nearly half of IT employment will be software-related, potentially doubling the growth rate in this sector The typical career progression for software-related IT professionals begins with obtaining a relevant degree or diploma, with 57.7% of positions preferring a first degree and 30.6% accepting associate or higher certificates Entry-level roles typically start as programmers, advancing within two to three years to analyst programmers, then to system analysts With experience, they may become architects or consultants, and after around seven years, advance to project or IT manager positions, with a small minority reaching IT director roles Other career paths within IT include specialization in networking, systems and technical support, system administration, databases, security, and sales.
2.4.3 IT project managers on demand
Project managers have consistently ranked as the third-highest paid IT professionals in 2008, 2009, and 2010 according to JobsDB surveys, following IT directors and IT managers In 2012, the survey showed that project managers surpassed IT managers to become the second-highest paying IT role in 2011 and 2012 While organizations typically need only one IT director and a limited number of IT managers, every IT project requires skilled leadership from an IT project manager, making this career path highly desirable among IT professionals Hong Kong’s strong demand for high-caliber IT project managers is evident from CIOs’ prioritization of investing in project management training, as highlighted in multiple industry reports and studies.
In 2007, the IT Project Director was one of the two pioneering job categories selected for the HKITPC IT professional certification system (Cheung, 2006) According to the VTC’s business outlooks (2008; 2010), IT project management capability is recognized as a vital factor in driving Hong Kong’s technological growth and enhancing its competitiveness in a knowledge-based economy.
2012, “Project management roles continue to be top of the list [ ] of [Hong Kong’s] IT executives”(Staff, 2012, p 14)
2.4.4 Hong Kong contingent workforce in IT sector
Contingent workforce in Hong Kong's IT sector consists of employees without permanent contracts, as highlighted by Redpath et al (2007) While contemporary studies lack specific data on full-time contingent employment, government initiatives have significantly promoted this trend, with approximately 47% to 56% of government IT staff under OGCIO-arranged T-contracts in 2008 and 2012 (OGCIO, 2011c) Beyond T-contracts, government agencies also employ IT professionals through direct contracts and department-specific skill bulk contracts, suggesting the actual proportion of contingent IT workers may be higher Contingent employment remains a key IT trend among Hong Kong CIOs, reflecting the sector’s shift towards flexible staffing solutions.
Contingent employment is prevalent in private organizations, especially within labor-intensive IT projects such as software development and systems integration, where up to 50% to 80% of IT workers may be contingent Data from various sources show that the IT/Software development category consistently employs around 35% to 45% of the total IT workforce, making it the largest and most labor-intensive job category The 'IT Matters for Hong Kong' survey (HKCS, 2004) indicates that while the majority of IT professionals are full-time employed and utilize their qualifications, many face job insecurity and stagnant salaries, suggesting a significant portion work in insecure contingent roles The trend of converting permanent positions to contingent contracts has been increasing, often due to mergers, acquisitions, or outsourcing, with notable layoffs by major employers like HSBC during 2008 and 2009 reflecting this shift.
In 2012, HSBC further reduced its Hong Kong IT workforce amid economic uncertainties caused by the Euro debt crisis The total number of IT vacancies in Hong Kong declined by 37.6% in Q4 2008 and 5.8% in Q2 2009, reflecting significant hiring slowdowns Surveys by the international recruitment firm Robert Walters in 2009 showed that 80% of Hong Kong workers were willing to accept contract roles, highlighting workforce flexibility during uncertain times Additionally, one-third of respondents in another local survey reported working an extra eight to ten hours per week, indicating increased workload and job insecurity These figures suggest that the Hong Kong workforce experienced shifts during recovery periods, with some employers gradually resuming hiring as economic conditions improved.
In 2012, employees became more selective and cautious, even when re-hired, reflecting a shift in workplace attitudes (Chan, 2009) However, there is limited data on the employment outcomes for those made redundant during that period, leaving uncertainty about whether they experienced permanent redundancy, transitioned to contingent employment, or secured permanent re-employment.
Inexperienced IT graduates, who are often contingently employed, represent a significant portion of Hong Kong's IT workforce, particularly in roles like programming and technical support Data indicates there is no clear evidence that newly graduated IT professionals are more vulnerable to contingent employment compared to other groups Notably, only a small percentage of IT positions—around 19% in 2008 and decreasing to 16.5% in 2010—prefer candidates with less than two years of experience, reflecting limited demand for inexperienced workers Furthermore, a notable share of IT recruitment comes from new graduates, constituting 13% in 2008 and 18% in 2010 of total job openings, sourced from both Hong Kong and non-Hong Kong institutions This suggests that while new graduates are actively recruited, their employment is often contingent, aligning with overall trends in IT labor demand.
2010 were 2,140 graduates (VTC, 2008 Table 3.11) and 3,495 (VTC, 2010 Appendix 23) respectively with a degree or sub-degree level, excluding those self-financed candidates who were likely to have working experience This may imply only 43% (that is 926/2,140) and 35 % (1,217/3,495) of the new
IT graduates successfully secured employment in 2008 and 2010, highlighting fluctuations in the IT job market during this period There is a clear gap between the supply of IT graduates and the demand for experienced IT professionals, indicating potential skill shortages According to reports from VTC 2008, analysis of annual manpower demand and supply forecasts reveals significant trends impacting the availability of qualified IT personnel Understanding these employment patterns is crucial for aligning IT education with industry needs and addressing workforce shortages.
Despite a surplus of graduates at both degree and sub-degree levels in Hong Kong’s IT sector in 2010, employers increasingly faced difficulties finding candidates with the right skills (Chan, 2009; Dinham, 2009; Galagan, 2010; HAYS, 2012; Staff, 2009a, 2009h, 2012) This skills mismatch has led to many inexperienced or underqualified IT workers being confined to contingent employment, or even facing unemployment or under-employment.
2.4.5 IT workforce mutual co-operation with Mainland
Section 2.3.4 above mentions the Mainland China integration trend In 2006, 12.4% (about 7,998) IT professionals worked full-time in Mainland (VTC, 2006 Executive Summary) This figure dropped significantly to 2,300 in 2008(VTC, 2008 Executive Summary); it further dropped to 523 in 2010 (VTC, 2010 Executive Summary) With increasing cooperation with the Mainland, one should expect more Hong Kong IT professionals worked in the Mainland instead of less VTC (2008) explained that
The notable decline in the number of Hong Kong IT employees working on the Mainland may be due to the increasing qualification and maturity of Mainland IT professionals across all job categories, capable of managing daily business operations independently However, recent reports, such as the VTC (2008), highlight that the IT sector has actually seen significant growth in recruiting Mainland Chinese talent This shift in human resource trends can be largely attributed to policies like the Admission Scheme for Mainland Talents and Professionals (ASMTP), introduced by the HK SAR Government in mid-2000s, which facilitates the inflow of Mainland IT professionals to Hong Kong.
Chapter Conclusions
This chapter provides an overview of the research context, highlighting the critical issue of effectively attracting, recruiting, retaining, developing, and managing contingent IT workers in Hong Kong As IT workforce demands, especially within IT project management, continue to rise, understanding how to address these challenges becomes increasingly urgent This emphasizes the need for further research to better comprehend this situation and explore strategies for improved workforce management in the region.
Table 2.1:Thumbnail sketch of the context of this thesis
The Hong Kong IT sector of the general economy
The global financial crisis reduced growth in many sectors, but IT continued to grow that places strong cost pressure and heavy manpower demands
Hong Kong CIOs are increasingly leveraging outsourcing, contingent employment, Mainland China resources, and cloud computing to meet the area's evolving IT needs As IT plays a more vital role in business originations, organizations require cost-effective, dynamic, and flexible solutions These trends underscore the importance of adopting innovative IT strategies to drive efficiency and competitiveness in the changing digital landscape.
The nature of IT employment
The number of contingent IT employees has been increasing in the last decade; IT projects have 50% to 80% of the total workforce as contingent
IT workers are not uncommon; and this figure appears not to be likely to get smaller
IT project managers are on demand aligning with growth of the IT sector; becoming an IT project manager is a popular career goal of IT workers Continuous learning in
In Hong Kong's knowledge-based economy and the rapidly evolving IT industry, continuous learning is essential for success Professionals often pursue formal education through academic institutions and professional associations or obtain relevant certifications to stay competitive and up-to-date.
Chapter Summary
In summary, Chapter 2 has provided an overview of the Hong Kong IT sector’s context It briefly describes the market situation of the Hong Kong IT sector, the five key trends: increasing importance of IT role in organisations, outsourcing, contingent employment, the Mainland China integration and the cloud computing The workforce demand and supply situations are discussed with special focus on
IT project managers, contingent workforce and co-operation with the Mainland This chapter provides the context of this research, and the next chapter – Literature Survey, will provide the contemporary theories that support the themes of this thesis.