War for talent hampering Chinese expansion

Apr 28 2006 by Nic Paton Print This Article

A lack of locally-experienced talent managers and a growing trend towards wage inflation are hampering the efforts of companies to hire suitable staff in China, according to research by a recruitment company.

Antal International found that more than half of the companies in China questioned are being held back by problems recruiting quality staff.

Most of the 500 company managers who were questioned in the bi-annual survey believed their operation was being held back by three factors.

These were increased competition for candidates caused by more new entrants to the market, fast-rising packages as companies offered more to attract staff and a concern at the size of the experienced talent market given the number of middle to senior vacancies on offer.

Academic qualifications were less of a concern; most candidates were highly educated with just 10 per cent of managers showing this as an area of concern.

What mattered more to the overwhelming majority was the shortage of people with local market or regional experience as a reason for being unable to find the right person to fill a vacancy.

"The fact that over 50 per cent of companies in China are struggling to recruit using their own methods at the management level is a great concern to new market entrants and those players already here," said Robert Parkinson, head of Antal's Asia region.

"There are so many other intellectual property, licensing, regulatory, cultural, and other important issues for business managers to deal with today that this adds greatly to their already crowded agenda" he added.

While over-fishing in the talent pool has exacerbated the shortage of experienced people, the competition for staff has led to increased wage inflation with people moving roles more frequently as increasingly higher packages are offered to tempt them.

Added to this, the risks associated with hiring the wrong people; especially in a place like China make it a minefield, particularly at a time when growth and opportunity is at stake.

Some companies are looking for Chinese staff in Europe, the U.S and wider Asia and bringing them back to fill the gaps.

Having an international reach into other markets to cover domestic market issues like staffing is now a key aspect to success in China.

The research found that the media, PR, technology, telecommunications and FMCG sectors were most affected by skills shortages, with 59 per cent of companies reporting trouble finding suitable candidates without resorting to external solution providers such as Antal.

This was followed by shipping and transport with 51 per cent reporting hiring issues as their market expanded.

Experienced marketing and sales skills, across a broad range of industries, far outweighed the rest as the area with the most scarcity but was closely followed by accountancy and finance.

Geographically, businesses in the major cities reported the most difficulties with Shanghai and Guangzhou in third and fourth place.

Beijing and nearby cities in the north were the worst hit, with 63 per cent of companies saying they struggled to recruit adequately experienced staff on time without enlisting the help of external recruiters.