Dangers for Hiring in China (III)

By Frank Mulligan, Talent Software

Yesterday, and the day before, I began looking at the dangers ahead for HR in China.

Of course there are more .....

Worker Shortages It’s hard to believe that a country with over 1.3 billion people could actually run out of production staff and that companies would have to make strong efforts to hire them. But here in China, we have and we do.

At one time people used to come up from countryside in droves to work in the factories or construction sites in the East coast of China. The factories jobs offered much more than they could get from subsistence farming. There was some possibility of not getting paid but this was worth the risk.

In the last few years the price of commodities has gone up and the Chinese government has initiated a policy of heavy support for the Western provinces of China. Money has flowed westward, and with it jobs.

So, over the last few years, the typical scenario has been that when the peasants go back home during Chinese New Year many do not return to their factory jobs after the holidays. Staying at home with their family is a much better choice when there are at least the signs of opportunities in their home town. This problem is not going away so you need a longer term Workforce Plan to solve it.

Surplus of Graduates Despite continuing progress in average educational achievement, colleges and universities in China will graduate too few candidates to fill the technical, information-intensive, judgment-intensive jobs that are coming online now.

The volume of graduates in China is high but their ability to add value to a company is virtually zero. This is related to the fact that universities in China produce graduates with a purely intellectual understanding of their subject area. The few (10%) who can add value to company operations are in such high demand you have to fight hard to get them.

For experienced hires the problem is different. So many industries in China are newly expanded so the depth of skills is just not there. Look back through the pipeline of virtually any industry in China and you will see that it gets harder and harder to find the skills you need. A Job Descriptioin that looks for 10 years of experience in China is targeted at a very small pool.

Culture Collapse With the rapid turnover of staff in China, companies are finding it extremely hard to maintain any semblance of a corporate culture. If everyone in an office has been there for less than 2 years it’s hard to see how any cohesive culture could develop.

And it gets worse. The very people who are responsible for developing that culture, the HR staff, are themselves also newly hired and are in the process of understanding what the culture is all about. Then they leave as well. Catch 22.

The question here is not how hard all of this is. The question is whether your company will be one of the winners.

Giving up is not a good choice.

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