The booming Chinese economy means that technology firms – particularly e-commerce companies – are struggling to find skilled candidates and managers to help fuel that growth.
The latest Salary and Employment Forecast from international recruitment company Michael Page shows that there is strong growth in demand for technology professionals across sectors such as finance and retail, in IT and telecommunications companies themselves, and at an increasing number of internet and social media businesses. “Employers across all professional occupational groups are continually looking to improve their IT systems and infrastructure, which is leading to consistent jobs growth for technology professionals at all levels,” the report says.
What will make interesting reading for those in recruitment or HR is that many of these companies are looking to invest in learning and development, and require support to help source and develop those sought-after skills. Another report, released by consulting firm PricewaterhouseCoopers (PwC), found that 59% of Chinese CEOs are finding it increasingly difficult to hire, and two-thirds are investing in workforce development outside of their own companies to build a bigger base of potential employees. HR therefore has an important role in staffing China’s rapidly expanding economy.
According to Andy Bentote, managing director for North and East China at Michael Page, there are two key employment markets in China. On the one hand, long-established multi-national companies already have a presence there or may have formed a joint venture with a local company. On the other, there are Chinese companies looking to expand – some of them into the West. However, the jobs market is still very much focused on local recruitment – around 95% of the placements Michael Page makes are for local workers.
China’s outlook for growth
PwC’s 15th annual global CEO survey focuses on China. It polled more than 1,200 CEOs based in 60 different territories, including 122 from mainland China and 38 from Hong Kong. Here are just some of the comparisons it was able to draw.
Chinese employers are also looking to focus on developing more “international” leadership skills if they are to succeed in expanding abroad. After decades of Communist rule and a very different style of education where pupils learn by rote, the management style in China tends to be a lot more hierarchical. “There is still resistance to Western ways of working. [Chinese employers] have a command and control approach to management and Western managers can struggle with this,” says Peter Gillingwater, director of executive search firm European Leaders. But more enlightened employers are looking into this, he adds, and this is fuelling greater investment in learning and development among Chinese companies.
Demand for managers
The Michael Page report also highlights a move to a more regional set-up for many companies, moving away from central control. This has led to greater demand for managers in cities such as Guangzhou and Shenzen, which are popular growth regions for e-commerce companies. Shenzen (in the south of China) in particular is home to some of the world’s largest telecommunications, hardware and software companies, such as mobile phone manufacturer Huawei. Bentote also notes that there is much investment going into cities such as Chongqing in the South-West of China, which is further inland so rents tend to be cheaper.
Elsewhere, a raft of banking and corporate employers are locating themselves in the main business hub of Shanghai, so international companies are seeing a lot of internal movement and may be placing IT managers in roles in these offices, while there is also a lot of research and development activity happening in Beijing. Salaries across the technology sector as a whole are expected to increase by between 10% and 15%, with higher increases expected for experienced technology professionals in emerging growth areas such as internet application development. Internet companies, it adds, are growing “exponentially” in mainland China.
Finding candidates with sufficient management experience to fill those roles is proving a challenge, however. “Both Chinese and multinational companies will try to put more locals into management roles, to ‘localise’ the management, but we still need to parachute in a reasonable number of senior managers who are parachuted in from elsewhere,” says Bentote.
Challenges for Western employees
But, unless you’ve got experience in China and are able to speak Mandarin, working for a Chinese company in particular will be a struggle, he adds. If employers do bring Western managers in, they tend to prefer someone who has previous experience of working for a Chinese company, or has perhaps worked in Hong Kong. Multinational companies with a presence in China are slightly different, but the emphasis will still be on knowing how the Chinese market works.
Peter Gillingwater says that Western candidates often underestimate how differently business is done in China. “You need to be au fait with the cultural aspects. People tend to see China as one homogenous entity but there are different ways of doing business in different regions and even the language dialects are different depending on where you are,” he explains.
Because of the candidate shortage, and also because of the need to internationalise their businesses, more China-based employers will have to source staff from abroad. The PwC report found that almost 60% of Chinese company CEOs expect to source more workers globally.
However, in doing that, these employers may need to become more open to Western ways of working. Gillingwater acknowledges that this may be a slow process. “You only have to look at Apple’s issues with its suppliers in China and its different expectations around working practices,” he says. Apple’s Foxconn factory in southern China is one of the region’s biggest employers, yet attracted a great deal of publicity around workers apparently driven to suicide due to poor working conditions. His company will soon be working on a project where they will transplant Western HR processes into a Chinese company that plans to move into Europe.
An encouraging development is that candidate behaviour is beginning to settle in this fast-growing market. The Michael Page report found that candidates are “putting more thought into a potential change of employer, and are making the effort to ensure they move companies for more than just monetary reasons. For many candidates, there is an increasing focus on non-financial incentives such as training and development opportunities.”
This is good news for HR and, for Western professionals who can deal with the language and cultural barriers, the non-financial benefits will also prove rewarding. “You’ll get the opportunity to be part of something in what will become the most important market in the world. You’ll learn a hell of a lot,” Bentote concludes.