Workforce Schizophenia

By Frank Mulligan, Talent Software

I think I have lost track of the number of times that I have used the expression íWar for Talentí. It describes a real phenomenon in China, the massive shortage of skilled professionals in the labor force.

This has tended to make people believe that all is rosy in China. Huge Foreign Direct Investment, lots of new factories, plenty of jobs. All boats rising in a high tide.

Well, actually no.

The market in China is very schizophrenic because alongside qualified, experienced professionals juggling multiple job offers you have new graduates struggling hard to get a job. It doesnít seem to make sense until you think a little more deeply about how recent the growth in China has been. And how shallow that makes the labour pool.

Many industries in China have taken off only recently. So as a consequence it is difficult to look back through the pipeline and find people with many years of experience in that industry. Automotive took off about 3 years ago, and is very hot now, but you would be hard pressed to find a high quality 20-year veteran of the automotive industry in China. 20 years ago China had virtually no private cars.

The Labor Divide

The China Daily recently reported that China will generate about 25 milliion new entrants into the workforce this year. Unfortunately, it is likely that the number of new employment openings will probably only amount to about 11 million.

The 11 million new jobs is a record for China but as you can easily see there is a shortfall of about 14 million jobs. This is likely to continue until the year 2010 according to the Institute of Population and Labour Economics of the Chinese Academy of Social Sciences.

Many of the new entrants to the workforce are rural residents who have recently moved to the city to seek a better life. But by far the largest group are the 13 million people who have been let go by non-performing State Owned Enterprises (SOEs).

So while the pressure is on for companies to find suitable professionals for experienced hire roles, the pressure is also on for government Employment Centers to find roles for inexperienced hires.

All options have to considered.

Comments to: frank.mulligan@recruit-china.com