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Talent squeeze forcing companies to loosen up

Published on Friday, 05 Apr 2013
Anthony Thompson

While the slowdown in the mainland economy may be giving companies breathing space to review their growth strategies, the modest deceleration is doing little to ease talent demand in the professional recruitment environment.

According to the 2013 Michael Page Salary and Employment Forecast for China, almost half of all employers surveyed believe there will be a shortage of professional skills this year. The majority of these employers also believe a skills shortage will lead to salary levels increasing above the rate of inflation at a rate of 6 per cent, while 36 per cent expect this rate to be in the range of 8 to 10 per cent.

“There is a shortage of professional talent across all industry sectors,” says Anthony Thompson, regional managing director of Michael Page Greater China.

As mid-level and luxury goods companies expand their presence on the mainland, Thompson says there is a shortage of project-management and construction skills to open and operate stores in second- and third-tier cities.

The technology sector is also lacking staff who have the required software, hardware, business-to-customer and business-to-business skills. “From junior-level programmers to senior-level managers of IT manufacturing and technology-related areas, the demand for talent doesn’t seem to be abating,” Thompson says.

Companies involved with fast-moving consumer goods, digital marketing and e-commerce activities are in a similar situation. Additional pressure is being added by managers being unwilling to relocate when companies move their headquarters out of tier-one cities to reduce costs. “Relocation usually involves upward pressure on salaries to retain top talent,” Thompson says.

As mainland conglomerates continue to expand internationally, demand remains high for Chinese- and English-speaking Hong Kong professionals, especially those with international experience.

Thompson has also noticed that mainland multinational and state-owned enterprises are becoming increasingly able to attract high-calibre talent and cites several key reasons for this. “Many mainland companies are financially stable and are in rapid growth mode as they invest in their businesses,” he says. “There are also employees who feel their careers are less likely to be affected by financial controllers sitting on the other side of the world making decisions designed to keep analysts happy.”

The limited availability of good staff is pushing some companies to look outside their industries for management talent.

“Bringing in management from outside an industry can introduce fresh ideas, leadership skills and new ways of driving business growth,” says Eunice Ng, director and general manager at Avanza Consulting. However, she adds, there is a risk that professionals unfamiliar with a particular industry may not understand the dynamics that drive it. There is also the possibility that colleagues will question why the focus is not on training and growing talent from within. “Employers need to be careful to avoid damaging motivation or internal morale,” she says.

To help circumvent staff shortages, and build a talent pipeline for the future, logistics company Agility, which has about 50 offices on the mainland and roughly 1,500 employees in the Greater China region, has implemented a “get, grow and keep” strategy designed to groom its next generation of leaders. “Our plan is to meet about 70 per cent of our management leadership needs by promoting internally,” says Wendy Wong, the company’s HR director for Greater China.

Launched almost two years ago, the “get, grow and keep” scheme is already paying off in several ways. “We are able to create our own leadership culture rather than hiring from outside, which is more expensive and offers no guarantees that people will fit in with the Agility culture,” Wong says.

Agility’s 12-month Management Development Programme consists of four phases that cover residential training, on-the-job action-learning projects, assessments, and coaching and mentoring.

Battles to acquire and retain talent are also heating up in the mainland’s hotel sector. “Demand is outstripping the supply of qualified personnel, which has left hotels scrambling for management staff at all levels” says Dr Qu Xiao, assistant professor at the Hong Kong Polytechnic School of Hotel and Tourism Management.

“In addition to new hotels coming online in Hong Kong, many international hotel giants have committed to widespread expansion in China, which is good career news for our graduates,” he adds.

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