Premiumsoft - 211021800 Dirección Estratégica de Los Recursos Humanos - ..

HK1164
DEREK MAN
NEALE O'CONNOR
ANUPRIYA GOSWAMI
PREMIUMSOFT: NEED FOR STRATEGIC

HUMAN RESOURCE MANAGEMENT
PremiumSoft, a Hong Kong–based software company, was cofounded by Ken Lin in 1999. The
aim of its main product, a database administration software called Navicat, was to help database
administrators better manage and navigate their databases. It was used by over 40% of Fortune
500 companies, including Apple Inc., Google Inc., Oracle, Microsoft, IBM, Samsung, JP
Morgan, KPMG, and General Electric.1 The company employed 41 people, 28 of whom were
developers. Total revenues in 2018 were USD5m, up from USD3m in 2011. 2 Ken credited
much of the company’s growth in recent years to an increase in the coverage of a database
product such as Navicat and its growth in China, where PremiumSoft had been doubling its
sales year-on-year.
PremiumSoft relied heavily on its creative workforce to drive new product delivery, manage
product upgrades, and incorporate customer feedback in its products. Ken’s core responsibility
was setting up strategic goals for the organization and identifying new products and
opportunities for innovation to ensure the company’s growth. In addition to his role as Director
of Software Development, Ken had been the company’s human resource (HR) manager since
its founding. He alone handled all the HR-related activities including recruiting and retaining
talent, and ensuring a healthy work environment. This role, however, had become more
challenging over time. Demand for good developers was at an all-time high, and just across the
border, Chinese companies such as Alibaba and Tencent were willing to provide Silicon
Valley–like salaries and benefits to attract developers.3 The expected growth of the technology
sector and competition from the international market could make talent acquisition and
retention even more difficult.
With an expected workforce increase of 50% over the coming three to four years, PremiumSoft
needed a strategic human resource management plan. Ken was evaluating the need to recruit a
professional HR manager for PremiumSoft. Was the timing right? In what ways could a
strategic human resource capability support the growth of the company? What was the
recommended HR strategy for PremiumSoft?
1
Navicat.com, About Us, 1999, https://www.navicat.com/en/company/aboutus, accessed 2 July 2018.
2
PremiumSoft’s 2018 financial year ran from 1st April 2017 to 31st March 2018.
3
A. Goswami, D. Man, N. O’Connor, J. Van den Berg, and K. Lin, Interview—Ken Introducing PremiumSoft, 2018.
Anupriya Goswami prepared this case under the supervision of Dr. Derek Man and Professor Neale O'Connor for class discussion.
This case is not intended to show effective or ineffective handling of decision or business processes. The authors might have
disguised certain information to protect confidentiality. Cases are written in the past tense, this is not meant to imply that all
practices, organizations, people, places or fact mentioned in the case no longer occur, exist or apply.
© 2018 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be digitized, photocopied
or otherwise reproduced, posted or transmitted in any form or by any means without the permission of The University of Hong
Kong.
Ref. 18/618C
Last edited: 21 December 2018

This document is authorized for use only by EAE Institución Superior de Formación Un NIF : B-64273956 in 2021.
18/618C PremiumSoft: Need for Strategic Human Resource Management
Technology Industry in Hong Kong

Hong Kong acted as a business platform for companies looking to access the Asia market
(China in particular), or mainland companies wanting to go international. 4 Hong Kong’s
innovation and technology sector together with that of Shenzhen—the Shenzhen-Hong Kong
technology cluster—was ranked the world’s second largest based on the Global Innovation
Index 2018.5 Technology companies and start-ups were considering the impact of the Greater
Bay area development on their own company’s growth due to expected corporate synergies.6
Biotechnology, artificial intelligence, smart city, and financial technologies were identified as
the four areas of strength for further development in Hong Kong. In 2017, Hong Kong saw a
steady upward trend in the number of start-ups (+16%) and the number of staff employed in
these start-ups (+21%) from 2016, according to a survey by InvestHK.7
Company Background
Company Overview
PremiumSoft was founded in 1999 by Ken Lin and Roy Choi as a web design company. The
web design business provided Ken with the initial capital to turn PremiumSoft into a software
development company without having to rely on borrowing money or involving external
investors.8
PremiumSoft developed applications for Windows, MacOS, and Linux, and provided customer
support for those applications. One of the products, Navicat, served over 3 million database
users around the world. PremiumSoft had over 150,000 registered customers across 7
continents and 138 countries. The customer base included governments, educational institutions,
SMEs, and large multinationals from various sectors. PremiumSoft had been awarded a number
of accolades.9 Regularly rated number one in database.com ratings in the database category for
the first 10 years after its founding and rated among the top 10 in the following decade,
PremiumSoft’s database programs were downloaded over 45,000 times per week.10
In the first phase of development, which lasted 10 years, PremiumSoft was focused on the
Structured Query Language (SQL) software market. In 2011, there were two major products—
Navicat and Navicoder. During the second phase, from 2011 to 2018, the company focused
more on supporting emerging nonrelational database technologies (loosely called NoSQL by
some) for big data databases and cloud computing needs with an expansion strategy focused on
4
HKTDC, “Innovation and Technology Industry in Hong Kong” (Hong Kong: HKTDC Research, 2018), p. 1, http://hong-kong-
economy-research.hktdc.com/business-news/article/Hong-Kong-Industry-Profiles/Innovation-and-Technology-Industry-in-
Hong-Kong/hkip/en/1/1X000000/1X09U6YK.htm.
5
S. Dutta, S. Lanvin, and S. Wunsch-Vincent, Global Innovation Index. 11th ed. (Ithaca, NY: Cornell University, INSEAD, and
the World Intellectual Property Organization, 2018), p. 41, https://www.globalinnovationindex.org/gii-2018-report#, accessed
18 August 2018.
6
R. Sze, A. Lau, and S. Yuen, “The Greater Bay Area Initiative” (Hong Kong: KPMG, 2017), pp. 3,16,
https://home.kpmg.com/cn/en/home/insights/2017/09/the-greater-bay-area-initiative.html, accessed 12 August 2018.
7
HKTDC.com, Innovation and Technology Industry in Hong Kong.”
8
N. O’Connor and A. Yu, “PremiumSoft: Managing Creative People” (Hong Kong: Asia Case Research Centre, The University
of Hong Kong, 2011), p. 2, accessed 2 July 2018.
9
2018 DBTA Readers’ Choice Awards: Navicat Premium won the “Best DBA Solution” award; 2018 DBTA Readers’ Choice
Awards: Navicat Data Modeler was a finalist in “Best Data Modeling Solution”; DBTA 100 2018—The Companies That Matter
Most in Data: Navicat was recognized as Top 100 Company in Data Management and Analysis (recognized companies based on
their presence, execution, vision, and innovation in delivering products and services to the marketplace); 2017 DBTA Readers’
Choice Awards: Navicat Premium won as the “Best Database Administration Solution”; Hong Kong ICT Awards 2008: Best
Business Grand Award and Product Gold Award (in recognition of outstanding achievements using the criteria of “functionality,
innovation, marketing performance, cost performance, research & development resources and societal impact”); 2008 Red
Herring Asia 100 (for leadership in technology innovation); and a number of other industry-related awards. “Awards &
Recognitions,” http://www.navicat.com/en/company/awards.html, accessed 19 August 2018.
10
O’Connor and Yu, “PremiumSoft: Managing Creative People.”
the China market. At that time, the technology market had a huge demand for product as well
as talent in both these technical areas. One such nonrelational database, MongoDB, was gaining
popularity in America. Navicat Monitor, a new server-side product, enabled a database
administrator (DBA) to monitor database performance.11
The founders also tried to expand and operate a new business in Shanghai in 2016. The new
business turned out to be a challenge and a learning experience. The office rent and cost of an
experienced developer was high. The product—a mobile app for a social media network—had
low profitability. After one year of continued efforts, the lack of profitability forced the
founders to close the Shanghai office and refocus on their core business.
While the new business failed, sales of their core product in China was growing rapidly. In the
first eight months of 2018, sales to China had reached around CNY3m (from 1 January 2018
to 31 August 2018). PremiumSoft saw a revenue growth of 66% from 2011 to 2018. Alibaba
was the biggest customer in China. It bought over 1,000 licenses and signed a maintenance
contract with PremiumSoft. Other premium customers included Huawei, Shanghai Putong
Development Bank, Shanghai Fudan University, and Xi'an Jiaotong University. PremiumSoft
sponsored its products in the university for the education and information system offices and
met the university administration regularly for feedback.
The company launched mobile and desktop versions of its cloud service product—Navicat
Cloud, which operated in similar ways as Microsoft Office 365’s subscription-based model [see
Exhibit 1]. Customers using the product could put their code and models on the cloud platform
to enable collaboration with their team members. The mobile version provided connectivity to
the navigator cloud from anywhere.
Operations and Work Culture

In order to manage multiple projects during the first decade of the company’s development in
1999, PremiumSoft, like other technology teams in banking and software engineering, used the
waterfall model for project management. 12 By using the linear methodology of a waterfall
model, the time spent early in the software development could reduce costs at later stages. It
entailed outlining detailed specification before testing and implementation. However, critics
argued that the user or clients often did not know the exact final requirements before the product
was built and any enhancement later caused redesigning, redevelopment, and retesting, costing
additional resources and time.13 At that time, the teams at PremiumSoft used Google Docs to
share content and collaborate. The multiple editing rights made it easier to manage content but
did not clarify who was responsible for which task, the duration required for each task, and the
status update of the project. The irregular follow-up meetings also caused delays in project
delivery.
After 2011, as PremiumSoft became more customer centric, the senior managers knew that they
had to make changes to the development process to be able to react quickly to daily customer
feedback. The waterfall model was no longer suitable, and PremiumSoft adopted agile project
management, a popular model among the software development community. Instead of
11
More about Navicat Monitor: If the CPU memory was not enough, the monitoring tool would send an SMS or email alert to
check the performance. A matrix can be used to observe what happened to the database and how to improve the database servers’
performance. With this product, PremiumSoft supported the mySQL DB earlier, and the road map for the future involved the
ability to support all other database. A single monitoring tool from a single computer to monitor all databases in the future could
provide a significant product advantage. See Goswami et al., Interview–Ken Introducing PremiumSoft.
12
Techrepublic.com, “Understanding the pros and cons of the Waterfall Model of software development,” 2006,
https://www.techrepublic.com/article/understanding-the-pros-and-cons-of-the-waterfall-model-of-software-development/,
accessed 19 August 2018.
13
D. L. Parnas and P. C. Clements, “A Rational Design Process: How and Why to Fake It,” IEEE, 1986, p. 2,
https://www.cs.tufts.edu/~nr/cs257/archive/david-parnas/fake-it.pdf, accessed 19 August 2018.
solidifying user requirements early on, the framework allowed iterations throughout the project
life cycle, as the product was tested and feedback was provided for further development. This
allowed more room for changes during testing and development.
PremiumSoft used third-party systems for more professional and efficient agile project
management instead of developing all systems in-house. The systems enabled the team to
clarify each of their tasks and allowed them to share content. The demo meeting after two weeks
of development was used to identify areas for improvement, and a subsequent review meeting
was held after two weeks. This disciplined approach of biweekly review was a significant
improvement over previous practices. The reaction time for potential updates and
enhancements was reduced significantly. Ken remarked that the agile project management
helped reduce project delivery time by 50% by 2018, compared to the delivery time in 2011.
Maintaining a healthy, friendly, and comfortable work environment was a priority for Ken. He
ensured there was no overtime beyond five working days and offered flexible working hours,
meaning the company allowed employees to work from 9:30 a.m. to 6:30 p.m. or 10 a.m. to 7
p.m. Ken did not prefer a work-from-home arrangement as he believed such arrangements had
a negative impact on front-end interface design work that required communication between
different teams. The user experience (UX) designers worked in close coordination with
developers in the office while reviewing and making quick decisions on adjusting user interface
or other details on the desktop monitors, which would not be possible with a work-from-home
arrangement.
The leadership at PremiumSoft had set up many avenues for communication among teams.
Supervisors held regular meetings with employees to deal with any programming obstacles.
Employees were also given the opportunity to speak directly with the directors to discuss
emerging problems that might delay the release or new features that they thought would be
valuable additions.14
The company highly encouraged team activities such as basketball and team lunches and
dinners to enhance teamwork and communication. When asked to describe the key
characteristics of PremiumSoft, Alex, a 28-year-old senior developer with five years of
experience in the company, described the work environment as “casual, no overtime, and
flexible.”
The Team
PremiumSoft’s team was research and development oriented. The total staff of 41 people
consisted of 28 developers, 3 user experience (UX) designers, 3 people in customer support,
and a separate marketing team. There were three major teams structured around products [see
Exhibit 2]. The biggest functional team, the Navicat team, was divided to serve a Windows
platform and a Mac OS platform. For newer products such as Navicat Monitor, a server-side
product, the team size was relatively small—six developers. Once a product performed well in
the market, new team members were hired based on the product development workload. Each
team had a supervisor and a few senior and junior developers. The deadlines were created by
consensus among the team members and were adhered to by self-regulation.
Ken was a graduate in information technology with master of science (MSc) in computer
science and held the position of director. Ken’s role included discussing and setting strategic
goals with supervisors, identifying key features for developers to modify or develop, and
identifying new products for the company. The project managers and leaders engaged in
14
building a road map for developing and managing those products. Ken did not do any
programming.15
In addition to the two director positions, there were three levels in the company—supervisors,
senior developers, and junior developers. Supervisor was the next highest level in the
organization structure after director. Supervisors handled the architecture design and project
management, came up with product ideas, helped design the features for the product to attract
more customers, and assisted Ken in hiring new team members. The responsibility of the project
lead or supervisor was also to ensure quality and timely delivery.
According to Ken, the difference between a supervisor and a senior developer was that the
supervisor, like a software architect, was expected to come up with new product ideas and create
an outline for the product. A senior developer’s responsibilities also included gathering market
intelligence, analyzing competitors and their product, investigating new technologies, and
coding.
Junior and senior developers did most of the coding. They seldom participated in the software
design and the architecture design. Junior developers with experience of less than five years
focused on the coding and on the task allocated to them in the speed meeting. The major
functional difference between being a senior developer and a junior developer was his or her
years of experience and the expectation that the senior developer would teach new staff. The
reporting line remained the same for a senior and a junior developer, with both reporting to the
supervisor.
Ken focused on the continual growth of the company in the database software market through
the launch of new products, for which he expected supervisors to play a key role. So far, Ken
was proposing most of the product ideas.
It will be healthy to roll out new products in the market. Our mission is to cover
most database software for the database engineering. We hope our supervisors
can help contribute on what kind of product we can make in future.16
—Ken Lin, Director of Software Development, PremiumSoft
Company’s Growth Road Map

PremiumSoft’s Navicat Premium enabled connectivity to the popular database platforms such
as Oracle, MySQL, MariaDB, SQLite, PostgreSQL, and SQL 17 by the means of a single
software. PremiumSoft was planning to add support for MongoDB and work on adding
additional database support moving forward. Besides this horizontal development,
PremiumSoft also worked on expanding vertically by adding more useful features to allow its
users to maintain or manage databases more efficiently and effectively.
For vertical and horizontal growth, PremiumSoft had prepared an internal road map for three
to four years. A successful implementation of the product road map could help differentiate
PremiumSoft from its competitors.
15
Ibid., p. 3.
16
Goswami et al., Interview—Ken Introducing PremiumSoft.
17
Codegeekz.com,. “Navicat Premium for Enhancing Your Database Administration System,” 2016,
https://codegeekz.com/navicat-premium-for-enhancing-your-database-administration-system/#respond, accessed 16 October
2018.
Human Resource Management at PremiumSoft

Talent Search
PremiumSoft utilized the job application portal of universities to post jobs. Ken was inclined
to post job openings on those portals with a less complex process. In 2011, after posting jobs
on three university portals in Hong Kong, PremiumSoft received about 100 résumés.18 In 2017,
a similar posting generated 20 applications. Ten of the 20 applicants were selected for
interviews, out of which Ken extended an offer to five. According to Ken, the technical skill
level of the new hires was comparable to that of hires from 2011.
Ken preferred to hire candidates with a computer science degree. A final-year project in a
related subject, proficiency in the programming languages used in PremiumSoft products, and
graduation with high academic standing were key recruiting criteria.19
PremiumSoft mostly hired new graduates. Only 5% to 10% of the workforce was recruited from
other companies. Ken explained that hiring developers with work experience was not their
general practice due to higher salary expectations compared to new graduates. Moreover, the
willingness to learn new languages was observed to be higher among younger candidates.
Hiring by word of mouth was common practice, as Ken mentioned: “After hiring a fresh
graduate, we ask them if they have a classmate who is interested, and we would consider the
candidate. Of course, some staff members leave our company to join other [start-up] companies
where their friends are working.”20
Selection and Screening

Since most hires were new graduates, they required training on the job. Basic programming
skills were tested during the interview process, but programming experience was not a
requirement. The key personal traits Ken considered during recruitment were a willingness to
learn, cultural fit, problem-solving capabilities, and logic reasoning.
Communication skill was an equally important criterion, as most of the ideas evolved through
discussions among team members during team meetings. As the developers were expected to
present the problems they were facing during a weekly speed meeting, any failure to utilize the
meeting time impacted the product development. Communication was a priority for Ken not
only for the benefit of the project but also for understanding his staff and team building for a
collaborative work environment. There were no formal tests to evaluate communication skill.
Ken relied on his personal experience in hiring candidates and evaluating their personality by
intuition and tested communication skills through conversations. Ken mentioned an example:
“In the interview we ask them, ‘What’s your hobby?’ If they say, ‘I don’t have any hobby’ or
they say, ‘I play computer games’ but do not elaborate, then we cannot understand his or her
interest. We need to understand his or her personality to find if the candidate fits our culture.”21
In addition to Ken, team leaders also participated in the interview process. There was no formal
meet-and-greet session with existing employees, and candidates were expected to learn about
the organization through the interview process, website, or friends employed in the company.
18
The three were Hong Kong University of Science and Technology, the Chinese University of Hong Kong, and the Polytechnic
University. In total, there are nine universities in Hong Kong.
19
20
21
Ibid.
Employee Turnover
In 2017, five graduates were hired, for a total of 41 staff members. The turnover rate of the
company by 2017 was about one person a year, making it less than 3%, compared to industry
average of 7.8% in April 2016.22
Compensation and Benefits

The starting monthly salary for graduates was HKD17,000. Most of the senior staff’s salaries
were more than HKD40,000. If they had over 10 years of experience, the salary was
HKD60,000 per month or more. The Hong Kong salary rate was reasonable compared to that
in mainland China. As Ken mentioned: “I have seen a case where a large mainland China
corporate offered CNY 2 million to an experienced developer.23 It is crazy.”24
Since the competition for talent was quite extensive in the technology market in Hong Kong,
retaining employees with an attractive package was important. Ken considered offering equity
to some of the key senior employees who had been with the company for a long time. However,
due to lack of time available and experience in the implementation of the idea, the company
simply matched the salary level in the market to retain employees. Ken admitted that the salary
packages offered by PremiumSoft were matched to average salary levels.
Non-salary benefits included an annual leave of 16 days,25 a birthday leave, medical benefits,
and an annual physical. Tuition reimbursement for the pursuit of a higher degree up to
HKD20,000 was introduced in 2017. Employees received a bonus if they did not take their
annual leave. The company also offered team-building activities such basketball and a team
lunch.
Learning and Development

The teams who developed the product managed the system enhancements and fixed bugs. The
bugs were usually reported by the customers or were found by cross-functional team members.
The person who handled a feature had to fix the issues. Knowledge of the product was the key
constraint, so the product creation team was rarely moved to a new product development. If a
new product was to be launched, the company hired new people. For example, the Navicat team
had worked on the product for over 10 years. If the developer discontinued servicing the old
product and was moved to another product, then it would be difficult to find a replacement to
maintain the original product.
Increased reliance on a few people with sole knowledge of the product was mitigated by
educating other team members about the product. The team division between Mac and
Windows operating systems was changed in 2018, and the teams worked together on the same
feature. This not only allowed them to learn about their individual project but also provided a
wider platform for them to learn about different areas of the company.
Some employees appreciated the flexibility to learn new things. For example, they worked for
the Mac platform and then were provided more areas to become familiar with, such as the
mobile platform or the Linux platform. Even after working for five years in the company, Alex
22
The turnover rate as a percentage of number of IT posts in the industry sectors increased from 6.9% (5 817) in April 2014 to
7.8% (7 074) in April 2016. 2016 Manpower Survey Report Information Technology Sector 2016,
http://www.vtc.edu.hk/uploads/files/publications/innovation%20and%20technology%20training%20board/2016%20MPS/201
6%20Manpower%20Survey%20Report%20(Web).pdf; accessed 30 July 2018.
23
1CNY = 1.13 HKD; Bloomberg.com, 2018, https://www.bloomberg.com/quote/CNYHKD:CUR, accessed 16 October 2018.
24
25
In addition to annual leave, employers were required to provide 12 compulsory statutory holidays to employees. These 12
holidays are known as statutory holidays or labor holidays. Labour Department, Statutory Holidays, 2018,
https://www.labour.gov.hk/eng/faq/cap57f_whole.htm#q5, accessed 30 July 2018.
found opportunities for developing new skills in different areas: “I’ve gained knowledge of
technology in this company—IPhone development, Android development, and software
development. I think there is still opportunity in PremiumSoft to keep learning new things. I am
working on Navicat Monitor and it helps me gain knowledge on monitoring.”26
Because PremiumSoft was building its own projects, it had the flexibility to decide the language
to use for development work. This flexibility was not necessarily available at larger companies,
because they would use a specific platform language to do their job. Leo, a junior developer at
PremiumSoft, a Hong Kong resident, and a recent graduate in computer science,
mentioned:“We get a chance to learn different kinds of languages here. The other company
may be using old language or technology but here our team can decide which language to use,
something more up-to-date.”27
Project work and meetings with seniors in the company provided employees an opportunity to
develop management and communication skills.
Training and Opportunities for Career Growth

New hires were expected to learn on the job in the absence of a formal on-boarding routine. A
new graduate who joined as a developer and performed well consistently would be promoted
in two to three years from junior developer to senior developer. In about five years with the
company, he or she could manage a small team for development. According to Ken, promotions
and hiring also depended on the company’s growth. Promotions without company growth
would mean the senior developers wouldn’t have anyone to manage.
Alex’s five-year career progression in the company involved working as a junior developer for
three-and-a-half years after graduation and then being promoted to a senior developer’s role.
The initial role of junior software developer involved fixing bugs. With several projects in
development, fixing bugs was a major work driver in the company. After one year, Alex was
assigned to start a new project related to an iPhone app, and then after one year, he joined
another project with an Android app. As a part of a new group, he was then assigned to software
app development for the Navicat Monitor product.
Some employees were unclear on how their individual growth plan was tied to the company’s
growth plan and what their career progression within PremiumSoft would look like within a
certain time period; one of the employees stated: “After five years, I’m not sure if I will still be
working in PremiumSoft, but I think I will be working in software development. I would like to
be involved more in the management role or project planning role.”28 The employee had not
communicated his goals to his manager, but he had identified the path to develop his project
management skills: “I think I can get more opportunity to learn more and improve my project
management skill. Because we always have meetings and we talk about how to plan a project,
I think I have some opportunity to learn.”29
Performance Appraisals
A cash bonus program was in place at PremiumSoft. An employee received a salary increase at
the end of each year if his or her performance was good. Performance feedback was gathered
from each team leader. There was no standard questionnaire for evaluating employees by same
standards. Ken solicited input from the employee’s supervisor before conducting an informal
appraisal of the employee over lunch.
26
A. Goswami and J. Van den Berg, Interview—Alex, PremiumSoft, 2018.
27 A. Goswami and J, Van den Berg, Interview—Leo, PremiumSoft, 2018.
28 A. Goswami and J. Van den Berg, Interview PremiumSoft, 2018
29
Ibid.
In the absence of clear expectations for promotion, an employee’s assumed knowledge level
was one of the key promotion criteria. A senior developer, when interviewed, shared that he
was not given a formal performance review that would highlight the key strengths that the
company appreciated and the areas where he needed further development from a technical and
nontechnical skill perspective. There was a general perception that the employee would be
promoted after certain years of service in the company. As one of the employees mentioned:
“When you work for a period of time in information technology [IT], they will promote you. If
you have worked for three or four years as junior developer, you will be promoted.”30
Employees’ Perspectives
According to Ken, the new generation of employees, the millennials, differed from the new
recruits 10 years earlier. Ken observed a difference in their assumed self-worth: “I think the
generation of millennials put themselves in the very top position. They think our company relies
on them heavily.”31
In 2017, Hong Kong was ranked the world’s least affordable urban area in which to buy a home;
city apartments cost 18.1 times the gross annual median income.32 Ken empathized with the
need to seek a higher salary in order to afford a home and a comfortable lifestyle. A salary hike
of nearly 20%–30% was common as employees moved from one company to another. Ken
considered that the trend of switching jobs frequently was a result of the economic conditions:
“Everyone wants more salary. Salary should be the first priority. Even if I graduated now, I
would look for the best-paying job.”33
Leo mentioned the nature of the job as the primary reason for joining PremiumSoft. The three
key criteria for joining a company highlighted were the nature of job, the salary, and other
benefits in order of importance. Even though salary was ranked higher than benefits, the work-
life balance was a critical criterion, which would defer employees from switching jobs for a
higher salary.
Leo, a junior developer who had been with the company for a year after joining straight out of
university, said, “I was looking for a software developer job after graduation; then I searched
for related jobs. PremiumSoft provided a good offer—the work of web development, which I
am stronger in, fit my expectation, the salary fit my expectation, and the benefits were good, so
decided to join the company. The most attractive thing about the company I think is the
environment. The communication between the coworkers is good and I like it.”34
However, there were employees who had prioritized salary over the culture of flexible hours
and no overtime and left the company. Alex had applied for a job at PremiumSoft after
obtaining his bachelor’s degree in computer science. He first heard about the company from a
friend. Alex worked on one of the key products of the company—Navicat Monitor. The ease
of managing sick leave, no overtime, and flexible work hours were all aspects of the job that he
appreciated.
30
Ibid.
31
Ibid.
32
SCMP.com, “Hong Kong the world’s priciest home market for the seventh year,” 2017,
https://www.scmp.com/business/article/2064554/hong-kong-named-most-expensive-housing-market-world-seventh-straight-
year, accessed 18 July 2018.
33
Goswami et al., Interview–Ken Introducing PremiumSoft.
34
Goswami et al., Interview—Leo, PremiumSoft.
For me, it [flexible hours] is attractive but maybe not for other people. I had
someone leave this job and join another company because he wanted more
salary. So, I think most people consider the salary more than the flexible and
casual work environment.
—Alex, Senior Developer, PremiumSoft 35
The young developers in the company considered the learning opportunities far more important
than promotion, title, or the brand name of the company. As Leo mentioned, “I think the salary
and opportunity provided by the company is important. I would like to learn something new
and not just stick to something old.”36 PremiumSoft offered Leo an opportunity to learn new
things and solve problems, which motivated him: “I enjoy the most when I can solve some
problem in the project.”37
Alex identified the need to hire more people due to the strain of delivering new projects: “When
I joined this company five years ago, the strength of the workforce was 41 people. After five
years, it is still 41 people.” To realize the planned growth for next three to four years, the
workforce was expected to grow from 41 people to 60 people. Alex recommended that the new
staff be mostly junior developers rather than senior ones: “Hiring more senior developers will
not help our company too much, but recruiting junior developers will be much more helpful.”
Leo agreed with this assessment: “I think PremiumSoft may need more junior developers
because there are lot of tasks in the company that leaders can distribute to the junior
developer.”38
When asked how to make PremiumSoft more competitive when recruiting (junior) developers,
the key recommendation from the employees was to improve the salary and increase the amount
of annual leave. Leo said, “I think the nonfinancial benefits in the company now are good and
may be better than other companies, so I think they can improve the salary to make it more
attractive.”39
Alex mentioned that there was an opportunity to improve the office infrastructure: “I think the
office is a little bit small and the environment is not very good. I have seen a better office when
I was working as an intern at another company. We do not have a facility for the employees to
relax.”40
A Need for Professional Human Resource Management

Greater Bay Area development (GBA) was expected to have a major impact on talent
availability in the region by removing the barriers to talent movement between Hong Kong,
mainland China, and Macau due to different taxation systems and cultural differences.41 A joint
survey by KPMG and HKGCC indicated that 24% of respondents considered free flow of talent
as one of the top potential benefits to business due to GBA.42
Major companies set up offices in multiple locations in search of talent. They used their
employees’ network to identify talent and utilized the rich human resource market in China,
35
Goswami et al., Interview—Alex, PremiumSoft.
36
Ibid.
37
Ibid.
38
Goswami et al., Interview—Leo, PremiumSoft.
39
Ibid.
40
Goswami et al., Interview—Alex, PremiumSoft.
41
R. Sze, A. Lau, and S. Yuen, “The Greater Bay Area Initiative,” KPMG, 2017, pp. 3,16,
https://home.kpmg.com/cn/en/home/insights/2017/09/the-greater-bay-area-initiative.html, accessed 12 August 2018.
42
Ibid.
10
which made China a more competitive landscape for talent acquisition compared to that of
Hong Kong. As Ken mentioned, “In my experience, there are two groups of people. Some
people like the Hong Kong environment and they don’t really care about the salary, and some
people are willing to move for higher salary. We hired two staff members from mainland China.
In my opinion, they liked the culture of Hong Kong and liked to stay here. Some people want to
work for China-based companies, and they definitely look for higher salary.”43
The reduction in the number of applicants over the years was becoming a concern for Ken: “We
received fewer résumés in 2018 compared to the number of résumés in 2011. It means there
are lot of opportunities outside. People have many choices.”44
Ken mentioned a few cases in the last five years when talented developers left the company,
stating that the work environment was not challenging enough; they switched to start-ups. Ken
was concerned: “We also have to treasure our team members. It is not easy to find the new
people now. I think our biggest challenge is definitely human resources. Because, nowadays,
the salary is very high for tech people. Good developers can easily find a job at a big company
such as Tencent, Alibaba, or Huawei. We believe that if they are talented people, then
companies outside must be waiting for them.”45
In the two decades of the company’s growth, Ken had managed human resources while the
revenue and product portfolio had increased. In leading the company into its next decade of
growth, Ken was facing the external challenges of a competitive market for talent acquisition
and the internal challenge of meeting the needs of employees for talent retention and ensuring
a healthy work environment.
Although Ken emphasized the need for development in human resource management, he was
hesitant to rush into opening a department and hiring HR managers. Ken believed the HR
manager should understand the culture of PremiumSoft and the nature of the technology
industry: “I don’t want just any human resource manager for our company; she or he must
know our business.”46
Because the company’s recruitment and turnover rate was low and the company often funneled
all resources back into software development work, Ken did not see an immediate need to hire
HR for the management of payrolls and leaves. However, as Ken was juggling multiple
responsibilities and finding avenues for growth, he insisted that the HR role needed to be
strategic, not just technical or tactical: “The workload of managing payroll and MPF is not
excessive but it is difficult to find an HR manager for strategic work.”47
The key goals for strategic human resource management were yet to be defined, but as the
company grew, there were key questions yet to answer: With Ken juggling with multiple roles
and responsibilities, was he the best person to continue in the role of the human resource
manager for PremiumSoft? What would be the appropriate time in the growth trajectory of the
company to hire an HR manager? What was the best HR strategy for the company? What
responsibilities would differentiate the role of HR from a tactical one into a strategic one?
43
44
Ibid.
45
Ibid.
46 Ibid.
47 Ibid.
11
EXHIBIT 1: MAJOR PRODUCTS
Navicat Premium
12
Navicat Monitor
Navicat Data Modeler
13
EXHIBIT 2: ORGANIZATION STRUCTURE48
Programming Team—Led by Software Development Director, Ken Lin
Navicat Windows Team—Responsible for development of Windows products line

Position Role, Years of Experience # of Staff
Product development, project management and supervision,
Technical Manager 1
15 years’ experience
Senior Software
Development 3
Supervisor
Software
Development 2
Supervisor
Senior Developer Product development, six years’ experience 4
Junior Developer Product development, fresh graduate 2
Navicat Mac Team—Responsible for development of Mac products line

Technical Manager 1
Senior Software
Development 3
Supervisor
Senior Developer Product development, six years’ experience 4
Navicat Monitor Team—Responsible for development of web-based server side products

Senior Software
Development 2
Supervisor
Software
Development 1
Supervisor
Senior Developer Product development – 4 years’ experience 1
48
O’Connor and Yu, “PremiumSoft: Managing Creative People,” p. 10.
14
Navicat UI/UX Team—Responsible for UI/UX design and Graphic design

Senior UI/UX
3 years’ experience 2
designers
Senior Graphic
Designer
Administration Team—Led by Finance and Marketing Director, Roy Choi
Marketing Team—Responsible for market research and development of marketing

material
Marketing Manager 10 years’ experience 1
Responsible for finding new resellers in the US, some
Senior Staff 1
experience required
Marketing Staff Online marketing, posting news in different download sites 1
Customer Service Team—Responsible for front-line relationships with current and

potential customers
Customer Support
Supervisor
Senior Support
Specialist
15

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PREMIUMSOFT: NEED FOR STRATEGIC

Last edited: 21 December 2018

Technology Industry in Hong Kong

Operations and Work Culture

Company’s Growth Road Map

Human Resource Management at PremiumSoft

Selection and Screening

Compensation and Benefits

Learning and Development

Training and Opportunities for Career Growth

A Need for Professional Human Resource Management

EXHIBIT 1: MAJOR PRODUCTS

Navicat Data Modeler

EXHIBIT 2: ORGANIZATION STRUCTURE48

Programming Team—Led by Software Development Director, Ken Lin

Navicat Windows Team—Responsible for development of Windows products line

Navicat Mac Team—Responsible for development of Mac products line

Navicat Monitor Team—Responsible for development of web-based server side products

Navicat UI/UX Team—Responsible for UI/UX design and Graphic design

Administration Team—Led by Finance and Marketing Director, Roy Choi

Marketing Team—Responsible for market research and development of marketing

Customer Service Team—Responsible for front-line relationships with current and

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