Manpower released their annual 2010 Talent Shortage Survey. Specifically to Asia, they found that 45% of employer have difficulty filling vacancies due to lack of talent. Those of us in the HR field know this too well. We either have to adjust the skills requirement or take extended period to fill positions. The survey show the lack of talent trend is on the upward rise.
Country analysis show that most Asia countries show a difficulty score that is above the global average. I am a bit surprised by the China result. Actual experience may depend on the type of skill required for your organization. As a result of the recent economic downturn, companies may be looking to Asia for growth and pressure for critical talent will only continue to increase.
Macro Economics and Labor Risk
Kelly OCG and Eurasia Group released their Q2 2011 Global Market Brief and Labor Risk Index. The Index showed in the second quarter that inflationary pressure is on the rise resulting
in higher prices for a range of goods, like fuel, basic commodities, and housing. As companies hire new staff, they are facing upward
wage pressures. It impacts retention as staff look to job change for the incremental pay hike.
The report indicated that in China, provincial governments, especially along the coast, have already rushed to raise minimum wages. This will increase the cost of labor there, and rising costs could spread to other provinces.
Local MNCs Catching Up
In a Harvard Business Review article, The Battle for China’s Talent, the author writes that the ability for foreign multinational companies (MNC) to attract top talent has been on a decline. While foreign MNCs have suffered from economic recession, Chinese companies have seen growth and expansion. Local companies have grown to become household names, if not global brands. In rational decisions by Chinese workers, they are choosing to work for local firms seeking greater career opportunities.
Foreign companies are under pressure to retain talent, especially middle-managers. As the graphic shows, while many applicants join foreign MNCs with an intent of a longer tenure, many are leaving sooner than expected.
Solutions – Don’t be left in the lurch
Finding solutions may be elusive. Not only are competition heating up against other foreign companies but, local Chinese firms are stepping to recruit top talent. The macro-economies are complicating matters creating rising wage pressures. However, if companies intend to focus growth in Asia, they must identify strategies and solutions to retain their talent base. Talent development and management are key. Don’t be left in the lurch. Focus on high performers and succession planning with high potentials is key to success.