It's happening all around us, every day, and everyone is playing a key part - but we're all in danger of being left behind. Hong Kong workplaces are evolving and adapting at a rate never experienced before, both proactively and reactively, to the demands of the global marketplace and a transforming talent base.

For employers, this is presenting a number of human capital challenges - such as how to fill key organisational roles from a shrinking talent base - for which there are no easy answers. Employees, on the other hand, are having to grow and change the way they work to meet productivity expectations, while desperately hoping their companies have the ability to meet the needs of the future.

These issues were addressed in the recent World of Work Report 2012/13, conducted by Randstad, which surveyed some 10,000 employers and employees in Asia - including 540 business leaders and 340 employees in Hong Kong - and identified key areas of concern that, if not properly addressed, could cause serious problems for organisations and their workers in the years to come.

Four issues dominated: a lack of leadership stunting future growth, critical skills shortages, retention difficulties, and the ticking time bomb of the city's rapidly ageing workforce. Brian Keegan, director of Randstad Hong Kong, and Robert Lamb, the company's director of client solutions, take a closer look at these challenges and what they mean for the future of the Hong Kong workplace.

Looking for leadership

Over half of surveyed employers believed their top productivity challenge was a lack of leadership for the next phase of organisational growth.

"Respondents are saying that they know they don't have the leaders in the right places or those leaders don't have the leadership skills to drive the productivity levels of those they're being asked to drive," Robert Lamb says.

The report points to a huge gap that needs filling. A mere 4 per cent of organisations surveyed rated their current leadership capabilities as excellent, while only 45 per cent gave a "good" grading.

Another important finding was a drop in leadership trust from employees. In the most recent report, 37 per cent of employees said they did not trust their leader, rising from 28 per cent the year before.

This was mirrored by employers' responses to the type of leaders they are hunting for. "Ninety-five per cent of prospective employees are looking for inspirational leadership," Keegan says. "This means leaders that will listen to employees and that they can trust, and they will grow and help them grow."

The need for effective leaders is exacerbated by the current state of Hong Kong's job market. "While redundancies happen, there is also a talent shortage. What that's done is it has made organisations and the people who work in them struggle to trust their leadership," Lamb says.

Solving the skills shortage

Filling critical vacancies is a key productivity challenge for 30 per cent of surveyed employers. "What that means is that there are jobs that are left open, or there are jobs occupied by people who don't have the level of skills they would like them to have. This is stifling productivity," Robert Lamb says.

"Only 40 per cent of employers said they are confident in attracting the type of people that they want."

Employers were also asked about the sort of work in which they expect the majority of their workforce to be engaged five years from now. The responses showed 67 per cent expected their employees to be engaged in skilled knowledge work.

"Every industry has specific knowledge that's key to those organisations to be successful. People who have a very specific knowledge set are the number one [types of employees] that our typical clients are trying to attract," Lamb says.

"We did see skilled technical work being very important in the last few years, but that has tapered off."

Asked about the competencies they seek most, 30 per cent of organisations cited leadership skills, while 23 per cent said they wanted more sales and business development staff. Surprisingly, only 17 per cent said that people who can drive creativity and innovation were crucial.

The report also found a growing list of new job titles, which is unlikely to slow down in the near future. "Hong Kong develops at an incredible pace. A lot of jobs we're filling in 2012 didn't even exist in 2001. We're seeing the new jobs of the future, such as talent engagement managers, customer coaches and people transformation managers," Lamb says.

Rejuvenating a greying workforce

A significant 53 per cent of employers believe the city's ageing workforce will have a negative impact on their organisation over the next 10 years - and they're not confident the government is doing all that can be done to address the issue.

Only 28 per cent of respondents were confident that government policies or initiatives will deliver the skills that the market will need, while only 46 per cent expressed confidence in the education sector. If all trends persist, Hong Kong is likely to face a severe skills shortage by 2017. Asked about their HR plans over the next 10 years, 42 per cent said they would adopt flexible work arrangements, 36 per cent said they would hire more temporary and contract workers, and 30 per cent said they would recruit more staff from overseas.

Robert Lamb sees this as a "trend towards a more blended workforce ... meaning not everybody is working nine to five".

Holding on to employees

With most employers expressing concern about employee turnover, about 58 per cent of employees surveyed said they were likely to leave their jobs over the coming year.

When asked their reasons for leaving, 46 per cent pointed to the lack of opportunity for growth and advancement, while only 18 per cent cited salary.

"They have no career path. They can't see any future," Robert Lamb says. "I've also spent a lot of time in China and it's the same thing there. Now we have the statistics to back us up. Employees stay in the organisation because of the vision or because of the work environment, and not necessarily due to the remuneration."

Brian Keegan stresses that salary only forms part of a bigger picture and that good talent demands a good price in a number of areas. "What's really important is to look at the overall employee package. One of the clear things from the research is that employees are asking more for training and development," he says.

"We're not saying that salary has become unimportant in Hong Kong, but to make people stay, we're finding that what Generation Y is really crying out for is clear, set guidelines as to what the next step in their career will be. For many employees, expectations are being let down, and that's actually what's causing them to leave as much as the salary change."