Highest figure for employee burnout in Hong Kong reported in Asia

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1 For immediate release Contact: Manisha Ramchandani Hudson (852) Highest figure for employee burnout in Hong Kong reported in Asia Comprehensive Hudson Report Released for Quarter Two 2006 HONG KONG 11 APRIL 2006 Hudson, one of the world s leading professional staffing, outsourcing and talent management solution providers and a division of Hudson Highland Group, Inc. (NASDAQ: HHGP), today released findings of its comprehensive quarterly Hudson Report for Asia. With a reputation as a key socio-economic indicator in the current marketplace since its Asia launch in December 1998, the survey has been built on the premise that employers expectations of an increase or decrease in staffing levels represent a significant indication of their optimism in the growth of their organisation and their industry as a whole. The Hudson Report represents the expectations of over 2,400 key employment decision makers from multinational organisations of all sizes in all major industry sectors, with 525 of these companies based in Hong Kong. Significant findings in the Q Hudson Report are: 58% of employers expect to increase their hiring which is the highest figure reported in Hong Kong reported since Q4 2000; The Banking & Professional Services sector has the highest expectations, with 64% forecasting employment growth; Demand for IT sales staff is very high, particularly those with international and/or China experience; Sixty-seven percent of respondents work over 50 hours per week, compared with 70% in Q2 2005; In the longer term, 41% say they are working significantly or slightly longer hours than two years ago; Hong Kong has the highest incidence of staff burnout of all the markets surveyed in Asia; The number of companies reporting increased burnout has jumped to 43%, from 34% a year ago; The main reasons for burnout are increased workload and difficulties in recruiting the required staff; As well as increased hiring, measures to combat burnout include workflow re-engineering, review of job descriptions and greater use of technology. 1

2 The latest employment trends Expectations for permanent employment remain high in Hong Kong. The upward trend continues with 58% of employers planning to increase headcount, up from an already high figure of 54% in Quarter 1 (Q1). A further 41% of professionals surveyed anticipate that employment will remain steady and only a nominal 1% forecast a decline in headcount. Erika Morton, country manager, Hong Kong, Hudson comments Employment expectations in Hong Kong are still rising and are now at the highest level in over five years. Most sectors are forecasting significant growth in headcount to cope with their increased volume of work. However, this heavy workload is also leading to an increase in employee burnout, the highest figure reported in Asia. Most sectors are forecasting significant growth in headcount to cope with their increased volume of work. However, this heavy workload is also leading to an increase in employee burnout, the highest figure reported in Asia. Banks are the most optimistic, with 64% planning to hire additional staff. Recruitment is focusing on new business development roles and on the China market, in preparation for banking deregulation. The Media/PR/Advertising sector has the greatest increase in companies planning to hire more staff since the previous quarter a sharp rise from 34% to 49%. Growth in this area also reflects the confidence felt in many business sectors. Permanent employment expectations over time Employment expectations continue to grow on a year-on-year basis. Overall, 58% of companies forecast increased hiring, compared with 50% in the same quarter a year ago. Most sectors are expecting significant growth. 2

3 Confidence has grown fastest in the IT&T sector: 51% of companies say they will increase headcount, a strong rise from 35% in Q This reflects the buoyant demand for IT back office staff. Many jobs that were previously on a contract basis are now becoming permanent headcount. The hottest jobs in Hong Kong The buoyant state of the employment market is shown by the fact that increased hiring is forecast for all 12 job categories surveyed. The area where demand is highest is Sales, which accounts for 33% of all anticipated new jobs. This confirms a trend that has become evident over the last year, up from 31% in the previous quarter. Demand for staff in banking and finance also remains high, confirming the sustained recovery in this area. Reduction in working hours over the past year Across all the sectors surveyed, with the sole exception of Banking, companies report a reduction in working hours compared with Q2 2005, when this issue was previously surveyed. Overall, 67% of respondents say they work more than 50 hours per week, compared with 70% a year earlier. The increase in working hours is greatest in the Consumer sector, where 34% say they are working slightly longer hours and 15% significantly longer. Fifty-eight percent of respondents in the Legal sector report 50 plus hour working weeks, a lower proportion than any other sector surveyed. However, there is a substantial minority who work much longer hours: 26% say they work between 61 and 70 hours and a further 13% more than 70 hours. Both figures are much higher than for any other sector. 3

4 Working hours compare with two years ago More respondents report an increase in working hours, compared with two years ago. Across all sectors, 41% say they are working significantly or slightly longer than they did two years ago, compared with 14% who report significantly or slightly shorter hours. The number of respondents reporting significantly longer hours is higher than for any other market surveyed in Asia. Sharp increase in burnout Overall there is a significant rise in the number of companies reporting increased levels of staff burnout over the past year with 43% saying that that burnout has increased, compared with 34% when this issue was surveyed in Q Hong Kong reports the highest level of burnout of all the markets surveyed in Asia. By far the steepest rise in levels of burnout is reported by the Legal sector with 45% saying they are experiencing increased burnout, compared with just 20% in Q2, This is due a combination of increased workload and the shortage of lawyers in areas such as IPOs and M&A. A rapid increase in the volume of work is by far the most significant reason for burnout in all the sectors surveyed. Overall, 84% of respondents reporting increased burnout cite this as a reason. The second most important reason is the difficulty of recruiting the required staff, with 44% raising this issue. Measures to reduce employee burnout Respondents reporting increased burnout see hiring more staff as a means of combatting it. Overall, 54% cite this as a key solution. This is consistent with higher workloads being seen as a major cause of burnout. 4

5 The Legal sector sees increased hiring as particularly important, with 86% of respondents citing it. This is not surprising in view of the high degree of difficulty experienced by legal firms in recruiting staff with the required skills. Hudson Hudson delivers specialised professional staffing, outsourcing, and talent management solutions worldwide. From single placements to total solutions, the firm helps clients achieve greater organisational performance by attracting, selecting, developing and engaging the best and brightest people for their businesses. Hudson is a division of Hudson Highland Group, Inc. one of the world s leading professional staffing, retained executive search and talent management solution providers. The company employs more than 3,800 professionals serving clients and candidates in more than 24 countries through its Hudson and Highland Partners businesses. More information is available at Special Note: Safe Harbour Statement Under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of Such forward-looking statements involve certain risks and uncertainties, including statements regarding each company's strategic direction, prospects and future results. Certain factors, including factors outside either company s control, may cause actual results to differ materially from those contained in the forward- looking statements, including economic and other conditions in the markets in which the companies operate, risks associated with acquisitions, competition, seasonality and the other risks discussed in our filings made with the Securities and Exchange Commission, which discussions are incorporated in this release by reference. 5