RPO and Talent Management Blog by Ochre House | Ochre Talk

China and the pressure for talent

In the June 2011 addition of Harvard Business Review, there is an interesting article exploring some of the misunderstandings and fallacies about China when seen through a Western lens.

Of striking reality is the size and scale of growth of what is commonly referred to as China’s domestic demand.



So what does this mean for talent? Here are two ideas and their implications.

Acceleration of the service sector

As has been a common pattern in developed markets, domestic demand has given rise to increased wealth and consumption of discretionary services; hotels, restaurants, concerts etc. From a talent standpoint, the big issue is that services need to be delivered at the point where they are consumed; which increases local demand for service workers.

The potential implication for talent: Labour costs increase as service workers migrate from production industries to serve China’s hedonistic pursuits.

Increasing local knowledge and capability

Over the past few decades, China has increased its innovation and R&D capability dramatically. No longer is the design work delivered by global corporations for the lower value added manufacturing to be fulfilled in China. If you need some evidence, look at how the patent filing rate in China is now eclipsing that of Japan and the US, detailed in this Thomson Reuters white paper.

The potential implication for talent: Employers will increasingly demand higher proportions of ‘knowledge workers’. However, the availability of this talent continues to be in relatively short supply. China’s education system hasn’t yet caught up with the knowledge and skills required by today’s employers. Josh Nobel of the FT offers this interesting analysis. Whilst the pressures on talent in China have been well documented, this increasing pressure on domestic demand suggests the ‘war for talent’ may have only just begun.

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