China feeling the effects of talent shortage
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Despite China’s economic slowdown, the country is still experiencing severe talent shortages. Some of the most dramatic effects are being felt in production and operations, where positions such as engineers, the skilled trades and technicians are consiste
Two major employer surveys– from Hays Asia and Met Life – both found that around half of China’s employers are concerned that talent shortages will affect their business.
One of the impacts of this shortage is seen in wages where hourly manufacturing pay has increased an average 12 per cent per year over the last decade. Increases for white-collar workers are believed to be even greater.
In my own industry of financial services and banking, for example, I know from first-hand experience that wages are rising rapidly.
As McKinsey notes in a recent report, a shortage of skilled labour is actually a worldwide trend, but is more of a problem in China (and Asia in general) because of the high levels of economic growth in the region in recent years.
Chinese authorities and the private sector are aware of the issue and are taking action to improve the supply of skilled labour. This includes actions by major educational institutions, such as Tsinghua University’s graduate business school,which has created a new MBA specialty in the increasingly important areas of e-commerce and supply chain management.
High-tech companies such as Huawei have invested in proprietary training programmes and teamed with universities to integrate their rapidly-shifting requirements into curricula. And private-sector HR departments are increasingly relying on data-driven approaches to improve their searches and measure the success of those searches.
These kinds of initiatives will take a while to have an impact; however,three factors are mitigating the impact of the talent shortages on Chinese employers. One is the expertise and experience gained by Chinese filling very senior positions in major multinational companies. A second is the high workforce participation rate of women in China – around 70 percent – which is helping fill the gaps. And a third factor is that Chinese workers are not switching jobs as quickly as they were |before economic growth started to slow.
Thailand could learn from what China is doing in this area, as these shortages are an issue that will only become more problematic here in the years ahead, particularly given the greater competitive pressures of a more integrated skilled-labour market under the Asean Economic Community.
