As multinational companies face stronger headwinds in China, how are local leaders “China CEOs” dealing with the situation, and what would help them move faster? However, on the whole, most don’t see the business environment in China getting any easier. Most also fear that the policy environment for multinationals in the country will get more challenging. Efforts to increase their agility by simplifying interactions with headquarters or by delayering and accelerating decision-making processes may therefore be a boon for many China CEOs and the organizations they oversee.
Chinese schools are indeed climbing the engineering list. Tsinghua drew attention for besting MIT, and two other Chinese universities appeared in the top 10. But while these schools score big in the “how much” categories, they do poorly on the “how good” ones.
The biggest import industry for China is the semiconductor industry. Semiconductors, the heart of the electronics industry, are components in all facets of the consumer market. Everyone knows that the microprocessor is the heart of a computer. Semiconductors are not only in satellites and automobiles but also in daily consumer goods such as refrigerators, microwave ovens and rice cookers. It is also in things such as TV remote controls and calculators. In fact, anything with an on and off switch has a semiconductor in it.
Semiconductors in mobile devices has been making significant gains in the telecommunications industry. Mobile phones have combined the tool for making phone calls to become cameras, music player, digital wallet and health tracking devices. Tablets have become full functional computing devices and displacing laptop computers. Telecommunications semiconductor industry have changed the computing industry.
Competition for market share is moving at a cut-throat pace. There have been a number of industry consolidation, less competitive companies being merged or acquired. Meanwhile, those without suitors have faced closure. In the recent several years, the industry have seen companies such as Texas Instruments, ST Ericsson, and most recently Broadcom have decided to shut its wireless/baseband business due to intense competition.
While Western companies (US and European) companies are facing closure due to market place pressures they are being replaced by Asian based companies with increasing design and wireless component expertise.
Chinese privately owned companies have been emerged into global brands in recent years. Companies such as Xiaomi and Lenovo have emerged to become internationally recognized brands.
Demand of Wireless Talent
The landscape for which Western MNC to recruit talent are seeing a gradual shift towards Asia. At the same time, as Chinese companies are looking to expand into international markets they are hiring employees with MNC experience to help with the growth.
While there is insatiable demand for highly-skill technical talent this shift towards an Asia-based market for wireless and mobile industry has several implications for talent acquisition and talent management. There is obviously implications for Western companies. Similarly, there is implications for Chinese-based companies with this changing talent landscape.
Culture: For Western companies: The challenge of inculcating culture is the biggest. With the shuttering of Western mobile semiconductor companies there will be fewer candidates with “western” work skills in the labor market. Western-based companies doing business in Asia will need to increase training for cross-culture integration.
For Chinese companies: As Chinese telecommunications companies are expanding into global markets they are snapping up talent with MNC experience to help them grow. As these new hires are being brought into companies this will naturally create a different dynamic and an increasingly heterogenous culture – a combination of both Chinese and MNC management experience. Chinese companies will have a learning and adapt itself from a Chinese to become a global company culture.
Management: For Western companies: As western MNCs are closing down business divisions in Asia and in China, there will be fewer management talent available. This will be the case for management skills with western MNC experience. Over the next few years, it is highly possible that Western MNCs will be recruiting management employees that are grounded on Asian-based management practices.
For Chinese companies: Chinese companies are attempting to evolve their management style to a more global approach. In order to accomplish this, Chinese-based companies are also recruiting for the same western MNC talent as their competitor. Chinese companies are also facing the same shortage of western-MNC talent.
Retention: For Western companies: Only until recently it was the western MNCs who were seen as top employers to work for. Increasingly, Chinese telecommunications companies are winning best employer awards. With prospects of becoming an IPO company prospective employees are choosing to work for Chinese companies in the mobile industry. Thus, loosing talent to Chinese- based companies is becoming an increasing threat to employee retention for western-MNCs.
For Chinese companies: There are distinct differences between MNC and Chinese company culture. Employee who formally worked for western MNCs are finding challenges with working for Chinese companies. For example, long-work hours and 6 to 7 day work weeks takes a toll on work life balance. Top-down management limits a egalitarian decision making that western MNC workers are used to. Some of these employees are leaving the Chinese company and returning to western MNC work environment.
As this article is attempting to demonstrate, the demise of Western telecommunications semiconductor industry players is creating a talent chasm for western companies as the shift towards an Asian base talent pool is more pronounced than ever. Workforce planning, talent acquisition strategies, talent development and retention must take into consideration this shift towards an Asian talent base. New strategies and different tactics are needed to continue meet the on-going talent demands in the age of mobile.