On the hunt for talent in South China
On 17th August, the Guangdong Human Resources and Social Security Department (GHRSSD) published a list of urgently-needed talent within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). The feedback collected from more than 17,000 enterprises across nine cities in Guangdong Province confirms what has already been intensely discussed over the past couple of years among most European Chamber member companies in South China – how the hunt for talent is hotter than ever. Sebastian Hardt, chair of the Human Resources (HR) Working Group of the South China Chapter, tells us more.
According to the GHRSSD study, the greatest demand is for technology research and design specialists, product developers and software engineers, as well as assembly engineers and workshop managers for high technology and advanced manufacturing companies. This forecasts a further increase in the demand for skilled workers and specialised talent, to fill roles from entry level to managerial positions, over the next three to five years.
While the list published by the GHRSSD contains no surprises for many Chamber member companies, three main questions remain:
- Where are the talent and specialists?
- How can an entrepreneur or manager attract such talent and specialists?
- What can a HR department do to retain the talent and specialists it has on board?
Looking at the number of students graduating in China each year, it might be assumed that a lack of educated individuals in the Chinese workforce would not be an issue. According to the Ministry of Education (MOE), more than nine million students will graduate from Chinese universities in 2021, an increase of 350,000 compared to 2020 and a new record-high.[1] But, according to some European Chamber member companies in South China, the level of education and the quality of these graduates are not meeting expectations. Many companies report that graduates need training in practical, job-related knowledge and skill-sets, and that internal education is required to develop talent and specialists. Depending on the required qualifications and skills, the education and development of talent can take up to three years, with very specialised skills taking even longer.
While technical knowledge and hard skills can be learned on the job, most European companies also criticise the lack of critical thinking and soft skills among graduates. These aspects are often difficult to find in the Chinese education system, where the main focus is on learning by rote for written examinations, quantitative testing and competitive ranking – the best example of this being the National College Entrance Examination (gaokao).
Hope for improvement has emerged following remarks made by President Xi Jinping at the fourth session of the 13th National Committee of the Chinese People’s Political Consultative Conference in March, in which he emphasised the need to push forward educational reforms to build a “balanced basic public education service system to contribute to the country’s high-quality development.”[2] While the initiative is welcome, its ability to close the gap will ultimately depend on how well and consistently it is implemented.
Taking into account the small amount of talent already available on the market, as well as the costly and time-consuming educated and developed specialists, competition for staff with local companies and corporations in the GBA is increasing significantly. Chinese entities—like Huawei, Midea, Xiaomi, Lenovo, Ping An, Bank of China and BYD, to name but a few—can now attract talent easier than foreign-invested enterprises (FIEs) since becoming household names and by providing higher salaries and more enticing benefits. In 2020 alone, Huawei invested more than Chinese yuan (CNY) 11 billion in employee benefits for their almost 200,000 employees, and hired more than 20,000 new employees locally.[3] Not only small and newly-founded member companies within the European Chamber face strong competition in the hunt for talent; established large enterprises in the automotive and medical device industries also lose out to rising local competitors in the job market.
Realising that working for a European enterprise for a long time is not considered a big accomplishment by the modern young Chinese professional is, indeed, a bitter pill to swallow. In many cases, these enterprises are exploited by Chinese graduates or young professionals to get one to two years of work experience under their belt and increase their attractiveness and value for the domestic labour market. In addition, traditional manufacturing companies are especially suffering from the glamour of the booming high technology, finance and e-commerce industries with strong bases in the GBA. For some member companies spoken to for this article, offering higher salaries or paying special retention bonuses increases their costs in a less-than-ideal solution. Others have started to outsource specialist tasks where possible.
To attract talent while also retaining highly-educated and experienced employees, South China Chapter member companies employ various approaches. Some try to extend their HR tool box for their current and potentially future employees. Apart from pure salary and bonus payments, monetary benefits like
building up and initiating internal talent development programmes that include fixed salary increase and promotion systems, are the most common options. Other benefits and activities also growing in popularity include complimentary meals; company-owned day care centres; flexible working hours; support in changing residency from hometowns to work locations in order to help families apply for better schools; health checks and additional health insurances; and leisure-time activities like sport events or family days. According to the European Chamber’s Business Confidence Survey 2021, enterprises are increasingly investing in improving working conditions and enhancing training.[4] Entities operating within a bigger corporate group with several global branches also try to promote development possibilities either within China or internationally. However, the flexibility and mobility for location changes even just within China seems to be shrinking.
Unfortunately, there is no secret recipe to overcome the lack of, or to attract and retain, talent. Good examples of best practices, increasing information sharing and strengthening ties within the HR industry will help companies develop high standards together, and make European and non-high-technology companies more attractive to the general labour pool.
Sebastian Hardt is chair of the Human Resource Working Group of South China Chapter. He is also commercial director with responsibility for Financial Controlling, Logistics and Information Technology of the Robert Bosch Plant in Shenzhen, the biggest plant of the Automotive Aftermarket division within the Group.
The European Chamber Human Resources Working Group aims to provide a platform for members to exchange information, and promote awareness on HR and labour-related issues across all industrial and service sectors, by developing an open dialogue with relevant Chinese authorities and international organisations.
The working group is organising a HR Conference that will take place in Guangzhou before the end of the year. For more information on the conference and/or the working group, please contact Peter M. Drucker, business and government affairs manager in Guangzhou (pdrucker@europeanchamber.com.cn).
[1] China will have 9 mln new college graduates this year, Xinhua, 13th May 2021, viewed 9th September 2021, <http://www.xinhuanet.com/english/2021-05/13/c_139943253.htm>
[2] Xi Focus: Xi’s ‘Two Sessions’ messages point way for China at historic development juncture, China Daily, 10th March 2021, viewed 21st April 2021, <http://www.chinatoday.com.cn/ctenglish/2018/ttxw/202103/t20210311_800239929.html>
[3] Huawei Investment & Holding Co, Ltd 2020 Annual Report, Huawei, 2020, viewed 10 September 2021, <https://www.huawei.com/en/annual-report/2020>
[4] European Business in China Business Confidence Survey 2021, European Union Chamber of Commerce, 10th June 2021, <https://www.europeanchamber.com.cn/en/publications-business-confidence-survey>
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