A managed slowdown?
If you have been paying much attention to the more melodramatic elements of the media of late you might believe that China, like so many of the established economies of the West, was starting to run into trouble. The basis of this assessment seems to be that China’s rate of growth has slowed recently, but is this really a sign of trouble ahead. I’m no economist (thankfully), but my experience on the ground here in China is that what we are seeing is a managed slowdown engineered by the country’s government.
Why? Because, after two decades of spectacular double digit growth, the authorities are now keen to create a ‘breathing space’ which will allow the all-important infrastructure to catch up. And which will also hopefully deflate the nascent property bubble which some predict could lead to problems similar to those seen in the West during the early stages of the global crisis.
A hot-house environment
This managed slowdown is certainly having some effect on what was becoming a runaway employment market, particularly at professional and managerial level. Antal’s latest Global Snapshot, which surveys hiring and firing trends in 30 countries, found the percentage of companies here recruiting staff was slightly down to 67% from 70% in July. However this is still one of the highest rates around the world and well ahead of the average figure in Western Europe, for example, of just 39%.
While the market might be slightly less frantic than in the first part of 2011, the war for talent is most definitely still on and the shortage of veteran managerial talent is still acute. The problem that China faces is that very few of its professional managers have much more than five years’ relevant experience. However, at the same time, there is a clear drive to shed the traditional reliance on expatriate talent and to ‘localise’ operations in the country – a trend clearly reflected in the fact that around 90% of the hires that Antal makes for clients are now of Chinese nationals. And, as in any market where supply cannot keep up with demand, the price of the sought after commodity is going up. Across the board pay is rising between 8-10% but in some key sectors, such as IT, individuals are changing job for twice or even three times their former salaries.
With competition for the best people showing no real signs of abating, both local and multi-national companies have fully embraced the need for transactional recruitment services and are now also moving to an acceptance of recruitment process outsourcing or RPO.
However, for now RPO still tends to be used for high-volume hiring campaigns and the more advanced tools of market mapping and talent pooling or pipelining which are becoming commonplace in the West are still in their infancy here. However China is catching up quickly and we consequently fully expect that RPO in all its aspects will be well-entrenched in both the international and domestic arenas before very long.
The training and development imperative
While ever more sophisticated recruitment tools may help to address the shortage of talent, the only real, long-term solution lies in the creation of more professionals and managers with the right skills to fill the talent pipeline. Universities and business schools, both in China itself and abroad, are playing a major part in achieving this but more conventionally commercial organisations are also now getting involved in the process – we, for example, set up our own management training arm at the end of 2010.
Whatever happens in the world economy, retrenchment, stagnation or genuine recovery, China seems destined to be the next global superpower. But exactly how long that takes may directly depend on how quickly it can develop the people it will need to justify and maintain that position.