Challenging Costs

China needs to up its game to compete says Hays.

Challenging Costs

Asia Pacific

Analysis of the manufacturing sector in mainland China from Hays has suggested that the region has become i a victim of its own success. According to the recruiter as local living costs have risen, labour costs have followed. As a result, as other nations grow in prominence thanks to their ability to imitate the low-wage model, Mainland China is having to find new ways to maintain its reputation as the go-to nation for manufacturing. The current solution appears to be coupling high quality production with value-added services, typified by the dynamism of the robotics industry.

“Mainland China can no longer compete on price,” explains 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,” he says. “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.”



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