In a country of more than a billion people, it may seem odd that both foreign and domestic firms are reporting that there is a talent deficit in China.
Although there are no exact figures on this shortfall, experts say that the problem is widespread across various industries. HR still remains the most significant challenge for firms, according to a report by China Daily.
According to PricewaterhouseCoopers’ annual global CEO survey in China, more than 59% of respondents said that hiring in China has become increasingly difficult. The survey revealed a talent scarcity across all sectors, with a large shortage in senior and middle managers.
In another study by Manpower Group, 33,000 global employers reported that vacancies at the managerial and executive level are harder to fill in China than in other countries.
Arthur Yeung, academic advisor to the Executive Education Programme of the China Europe International Business School (CEIBS) in Shanghai, said demand for skilled and well-educated workers has outpaced the supply in China, especially after the economy moved into high value-added industries.
"China used to be a manufacturing-driven economy, where there are a large population of blue-collar workers and factory managers to manage the process. But ever since it shifted its focus from manufacturing to high value-added industries, the challenge of attracting and retaining staff has gone up," explained Yeung, who is also the Philips Chair Professor of HR Management.
"The shortage of talent could slow China's growth as productivity gains slow," he added.
China’s education system has also been blamed for the talent shortage. Despite producing the most college graduates in the world, many of these graduates are unable to adapt themselves to the working environment, playing a major role in the talent deficit situation.
"In China's education system there is general focus on specific experience and technical ability rather than the ability to lead, manage and market," Parkinson at RMG International Business Consulting was quoted as saying.