Older workers as a solution to talent shortage: Hong Kong Labour Department launches Re-employment Allowance Pilot Scheme to “unleash potential” of elderly and middle-aged workforce

Hong Kong residents aged 40 and above who are lawfully employable and who have not been in paid employment for at least three consecutive months are eligible to apply for the REA Scheme. Eligible participants will receive an allowance of HK$10,000 for the first six consecutive months of full-time employment, and an additional HK$10,000 for completing 12 consecutive months of full-time employment. The allowance will be halved for part-time employees, with a maximum re-employment allowance of HK$20,000 for all eligible participants.

This incentive comes off the back of the Labour Department’s Employment Programme for the Elderly and Middle-aged (EPEM).  Under the EPEM, employers are encouraged to engage unemployed job seekers in the 40+ and 60+ age categories by the provision of on-the-job training allowances offered by the government. To encourage employers to employ participants of the REA scheme, the Labour Department will extend the duration of on-the-job training allowances under the EPEM for 6 to 12 months. 

According to the Labour Department, “The REA Scheme encourages elderly and middle-aged people to return to the employment market, and helps unleash this potential labour force, which is beneficial to both employees and employers.”

The overall aim of the REA Scheme is to address the prevailing manpower shortages that have constrained Hong Kong’s post-pandemic recovery, by expanding the potential labour force to meet the immediate needs of employers. By encouraging experienced workers to return to the workforce, the scheme is expected to enhance overall workforce productivity and provide economic benefits through increased employment and consumer spending.  

The Future of Work – how older workers can tackle the talent shortage

Concerns about labour and skill shortages remain high on the agenda of policy makers and employers in advanced economies worldwide. A recent survey by ManpowerGroup for 2024 found that about 78% of Hong Kong-based companies were struggling to locate talent as they head into next year.

One of the ways employers are attempting to combat skills shortages is to retain and attract older workers and benefit from their experience and knowledge. In doing so, employers will need to adapt by adjusting recruitment, retention and development strategies to respond to the different priorities and pressures of a multigenerational workforce.

Different generations are often ascribed divergent values and characteristics influenced by the circumstances and key events of their generation. However, many employment practices that are highly valued by older workers are beneficial for all, even if individual motivations are different. For example, flexible working options and health and wellbeing support alongside training and development opportunities may be particularly attractive to older workers - but they are also valued by those with caring commitments, and younger workers who increasingly look to build flexibility into their life. Employers need to rethink work and design workplaces that appeal to employees at different life stages in order to take advantage of the benefits of a multi-generational workforce, such as increased resilience and innovation, retention and productivity, and diversity of skills and perspectives. 

For more on the global talent shortage and the impact of shifting demographics and ageing workforces on the world of work, visit our Future of Work Hub.