Talent a Potential Game Changer for Chinese Firms: PwC
Talent could prove to be a potential game changer to the growth prospects of Chinese companies.
According to PwC’s 15th Annual Global CEO Survey, more than half (54%) of China respondents – far higher than the global average of 31% – say the talent crunch has prevented their businesses from innovating effectively.
Only a third of the 160 China and Hong Kong-based CEOs polled for the survey (China; 122 & Hong Kong; 38), are very confident they will have the necessary talent to execute their strategies in the next three years.
“It’s a dilemma for CEOs. There’s a huge demand for talent, more so in China than elsewhere, to match its potential for domestic growth. Ironically, the ‘China speed’ – that extraordinary pace where products are designed, factories equipped and production ramped up in a small amount of time – appears to hit a speed bump when it comes to creating the right talent,” says Nora Wu, PwC Asia Pacific Human Capital Leader.
“China CEOs recognise this challenge and are focused on developing their people rather than simply hiring them,” adds Ms Wu.
To bolster their workforces, half of China CEOs plan to expand their headcount by more than 5% this year (vs. 28% globally). However, 59% say it is increasingly difficult to hire in their industry. In fact, this challenge cuts across all sectors, with an acute shortage of senior and middle managers.
In addressing the talent constraints, China CEOs are looking at alternative channels. Two-thirds are investing in workforce development outside of their own companies to build a bigger base of potential employees, while 59% expect to source more people globally. Furthermore, 57% of China CEOs are partnering with other companies to help overcome talent deficits.
Meanwhile, with no signs of a pickup in the euro zone and US economies, strong expectations are being placed on China for growth opportunities. Globally, 30% of global CEOs rank China as their top growth market in the next 12 months.
“The Chinese economy may be slowing down, but the China story remains attractive and critical to global CEOs’ growth strategy. Beijing may have lowered China’s growth rate to 7.5% for this year, it still doesn’t deny the fact that that projection is still more than double the growth rate of the global economy. So, should we consider 7.5% an unexpected slowdown or a powerful engine of growth? I think it’s pretty clear what the answer is,” says David Wu, PwC China Beijing Lead Partner.
China’s rapidly growing middle class – expected to be 40% of China’s population by 2020 – will create a vast new domestic consumer market that is expected to drive the Chinese economy. And with the various measures taken to resolve the talent crunch, it will leave Chinese companies in a better position when the global economy picks up again.