For so long Mainland China has been the envy of the world for its manufacturing capabilities, combining high quality with low-cost production, making it the main protagonist in global economic growth.
While its achievements cannot be underestimated, there is evidence that Mainland China is becoming a victim of its own success, and as local living costs have risen, labour costs have followed. Now, as other nations grow in prominence thanks to their ability to imitate the low-wage model, Mainland China is finding new ways to maintain its reputation as the go-to nation for manufacturing.
The current solution is coupling high quality production with value-added services, typified by the dynamism of the robotics industry.
“Mainland China can no longer compete on price,” says Simon Lance, Managing Director of Hays for Greater China. “All those labour intensive industries will be moving to countries such as Cambodia and Vietnam. As we face a world of more automation, the innovation Mainland China can bring will be key.”
According to Simon, as Mainland China strives to stake its claim as a world leader in value-added manufacturing, there are two key areas in which it needs to develop its workforce:
- Research and Development (R&D) innovation
- Product Marketing
The former is perhaps obvious. As product prices rise in order to alleviate pressure on rising labour outlay, innovative products are required to maintain relevance in this changing climate. As such, candidates who can facilitate this change are escalating in importance.
“Companies are now attempting to redefine their market position, and they need development people who can bring new products to the table,” says Simon.
“But they also need good sales people who can take these new products and ensure that they are marketable.”
“The trend for acquisition of these talents has been around since the last quarter of 2016, but it is now intensifying.”
The industry driving the quest for these candidates is robotics. In 2017, Chinese companies are expected to realise $4 billion from the sale of 110,000 units, and if the predictions of exponential increases are realised, then it is essential that Mainland China continues to be at the forefront. In order to do this, it needs to find the talent in both of the aforementioned areas to do so.
The only issue here is a shortfall in talent, and companies are attempting different strategies to overcome this.
“More and more employers want to create a better employer brand on the market. They attend universities with recruitment fairs, but now more and more information is spread online through social media outlets such as WeChat and Weibo,” Simon continues.
“But they are also approaching candidates in existing positions with offers of stock options, signing on bonuses and salary increases of 20 to 25 per cent, even 50 per cent in some cases, as well as finding ways around non-competition contract clauses.”
In this competitive atmosphere, Simon believes it’s a good time for experienced candidates to look to improve their current situation.
“If you’re really good at your job, it’s always time to move. For mid-level roles, candidates must know not just the product but also the market, as well as having people management skills and an ability to communicate with senior stakeholders.”
“For senior level candidates, visionary thinking is imperative to lead the team to the next developmental stage, and an ability to make tough decisions and, if necessary, challenge top management is also needed, perhaps more so than in other countries.”
An overview of other trends observed in Mainland China’s Manufacturing and Operations sector can be viewed below.
- Companies are aggressively seeking candidates internationally, primarily Chinese who are either in studying or working internationally.
- Recent, more stringently imposed regulations on foreigners – a requirement of two-years experience in the relevant field plus Mandarin fluency – means that ex-pat recruitment has been massively restricted.
- As investment in AR and VR started some two years ago, there are many small startups that companies are watching and waiting to see how they develop. Candidates are advised to do likewise and appropriately upskill if they are looking to proceed in this industry.
- While upskilling is always advisable, candidates should be wary of the recent growth in unaccredited online courses. While they appear time and cost effective, formal classroom courses are still more highly respected and the industry norm.
- With an increasingly tough marketplace brought about by regulatory pressure, companies are seeking new business from outside of their existing client pool, attempting to capture market share from their competitors.
- While predictions on the internationally discussed friction between the U.S. and Mainland China were pessimistic, for the most part companies with established presence in Mainland China consider the cost of relocation and potential supply chain problems not being a price worth paying, particularly in the robotics industry.
To view the full Inside Story of Manufacturing & Operations in Mainland China, please click here.
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Hays, the world’s leading recruiting experts in qualified, professional and skilled people.
About Hays
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2017 the Group employed 10,000 staff operating from 250 offices in 33 countries across 20 specialisms. For the year ended 30 June 2017:
– the Group reported net fees of £954.6 million and operating profit (pre-exceptional items) of £211.5 million;
– the Group placed around 70,000 candidates into permanent jobs and around 240,000 people into temporary assignments;
– 24% of Group net fees were generated in Asia Pacific, 49% in Continental Europe & RoW (CERoW) and 27% in the United Kingdom & Ireland;
– the temporary placement business represented 60% of net fees and the permanent placement business represented 40% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA.