Leadership Development

Talent in China: Developing Professionals to Fill Growing Demand

Despite a population of 1.3 billion, a growing number of global companies are experiencing significant challenges attracting and retaining talent in mainland China. Leading companies respond to this challenge by providing their people with extensive learning and development opportunities.

The growth of the Chinese economy has resulted in a booming demand for people in professional and managerial jobs. McKinsey estimates that China will need to produce about 75,000 globally capable executives over the next five years.

Most companies working in China are narrowing the talent gap by:

  • Sourcing Chinese candidates who have studied abroad. More than 64,000 students from mainland China studied in the United States in 2002 and 2003.
  • Expanding expatriate programs for experienced professionals (a relatively expensive option that will not be sufficient in the long term).
  • Recruiting talent from elite Chinese universities. For example, Tsinghua University was the first to launch an MBA program in 1991.
  • Targeting experienced people from other global Fortune 500 companies.
  • Acquiring local Chinese companies.

As demand for talent outstrips supply, turnover rates have jumped to more than 30 percent in a number of companies. Additionally, compensation is increasing at a steady pace, closing the gap that formerly existed when compared to compensation in other Asian countries. Benefits are becoming a tool to help retention, again increasing the total cost to company.

Instead of just focusing on recruiting and replacing talent, companies will need to pursue a strategy of employee retention initiatives. This is cost-effective (the cost of a replacement can be one-and-a-half to three times annual salary) and will become a differentiator in attracting new talent. One key retention strategy that works especially well in China is providing best-in-class learning and development opportunities. Ideally, the retention strategy links this growth and development with career development and performance management practices. This strategy comes with a number of challenges, including ensuring new hires are quickly assimilated, providing cost-effective and efficient training, reaching a dispersed workforce, providing training in Mandarin and addressing cultural difference in learning styles.

A number of companies, including GE, Deloitte, L’Oreal, McDonald’s and Motorola, have established corporate universities and leadership development programs in China, and have established partnership with top-tier Chinese universities. Important professional management competencies that need to be developed include risk and quality management, international management, working in and across cultures, entrepreneurship, project management, accounting, sales and marketing and others. With such a vast demand and need to meet the learning and development requirements for the future, classroom-based programs alone won’t be sufficient. Internet-based learning has experienced a fast adoption rate in a large number of companies in China, and a growing number of Chinese universities are offering e-learning courses. An estimated 103 million Chinese have access to the Internet (compared with 135 million people in the United States).

A number of Chinese e-learning companies have developed and localized cost-effective e-learning in Mandarin, driving a fast adoption for people who are less proficient in English or who prefer to learn in Mandarin. Although connectivity and bandwidth can still be an issue, most companies can provide employees with high-speed access to e-learning in their offices.

The demand for growth of the pool of management and professional talent, the eagerness in China for learning and growth, and the exponential growth in Internet usage and access have generated significant interest from both companies and universities to implement e-learning strategies and blended leadership development programs. These experiences will become instructive for all of us as we generate and support the development of China’s management and professional human resource capabilities.

Nick van Dam, Ph.D., is the global chief learning officer for Deloitte Touche Tohmatsu, a consultant in Deloitte’s Change, Learning and Leadership Practice, and founder and chairman of the E-Learning for Kids Foundation. He can be reached at nvandam@clomedia.com.

Filed under: Leadership Development, Performance Management, Technology