Tech in China: Overcoming the skills shortage

Technology is booming in China, but a shortage of tech skills is damaging business. Raziel Tsang, RP International Principal in North Asia, explores the talent issues holding business back.

Stroll the bustling streets of Shanghai, stop for a bag of mouth-watering fried dumplings and, most likely, you’ll need to whip out your credit card to pay. Such is the rate of technological growth in China, even the smallest street vendors are cash-free.

Fuelling this thirst for technology are tech giants such as WeChat and Alibaba. By adding services like online banking and transport to their mammoth platforms, these businesses support a culture that has accelerated and normalised digitisation at a tremendous rate.

The government is playing an active part too, of course. In 2015, China’s State Council added AI to its Internet Plus Initiative, a programme designed to modernise and transform traditional industries. This was followed up two years later with details of a three-stage road map designed to make China a world leader in AI by 2030. And in 2018, to mark 40 years of economic liberalisation, the government announced further free market style measures to drive forward growth and investment in technology.

Chinese businesses have embraced this boom. A recent survey of business leaders conducted by PwC China found that 17% have AI initiatives “present on a wide-scale” in their organisation, compared with just 6% globally. And when it comes to making decisions based on data and analytics, 56% consider themselves “somewhat ahead” of their competitors, compared with 38% of leaders globally. The same research found that Chinese businesses are significantly more cyber resilient too: 54% of organisations are able to withstand cyber attacks and recover quickly compared with 34% globally.

 

A mismatch of skills and ambition

Yet despite – or because of – this rate of growth, a significant skills gap has emerged over the last two decades. A lack of qualified teachers is holding back students domestically, while encouraging more and more young people to leave home and study abroad. In fact, according to UNESCO, China sends more than 800,000 students abroad each year – more than any other country. This wouldn’t matter so much if all these students returned. But many don’t.

So what can Chinese businesses do? There are three approaches to overcoming this skills shortage, these are:

  1. Secure access to the best skills already available
  2. Develop domestic talent internally
  3. Tap in to global talent

 

Securing access to domestic skills

The best Chinese graduates are snapped up quickly by big business, while the rest tend to find their way to China’s fiercely competitive start-up market. The truth is, there just isn’t enough talent to deliver what the market needs, be it in R&D or commercial delivery.

Right now, at RPI, we’re targeting Chinese nationals who have studied abroad and stayed there, with the view to entice them away from Silicon Valley and Europe back to China. But Chinese businesses must play their part too. They need to be savvy to the expectations of the next generation: what do these young workers expect and require from a business culture? How do they want to work?

According to Computerworld Hong Kong, Huawei is already changing its workplace culture to accommodate Generation Z. “Huawei’s 2017 employee survey found that staff born in the nineties believe that self progression is the most important aspect of their jobs, followed by meaning in their work, recognition and compensation. To cope with these changes, Huawei has ramped up R&D spending and redefined its vision to reflect these shifting values,” writes tech reporter, Tom Macaulay.

 

Developing domestic talent

While the government is investing in developing home grown skills, this is a long-term resolution that won’t have an immediate impact on the market. That said, it’s important for businesses in China to participate in this process and communicate their needs with local colleges and universities.

However, it is difficult to predict exactly what tech skills will be needed in five years’ time. Industry 4.0 is changing everything – how do we know that the skills we are investing in now will still be the priority then? Businesses must look to upskill workers internally if they’re to keep up with market demands.

 

Tapping in to global talent

Attracting talent from overseas is an effective way to overcome the skills gap here and now, but the process, HR complications and cultural challenges of hiring overseas can discourage some businesses.

At RPI, we spend a lot of time educating our clients to think about how they can fully integrate a person from overseas into a predominately Chinese team, as the working culture can be very different from what the candidate is used to.

We often find that it’s the small things that kill the deal, and this is something that we’re equipped to help our clients to deal with. When it comes to resourcing from overseas, it’s not always the job itself that causes problems, but the practicalities of relocating to a new country.

We offer candidates guidance on what type of VISA they will need to apply for, how to declare their taxes, finding somewhere to live, as well as things like how to sign a lease if the landlord doesn’t speak English – and we make sure that we address these issues early in the hiring process, so that they don’t create roadblocks or disappointment further down the line.

Thanks to our global reach, we’re also able to target the right people, with the right skills and the international perspective that’s so crucial to successful overseas appointments. We know what candidates are seeking and what our clients need – and we have the network to bring the right forces together.

If you’re struggling in the face of a skills shortage, we can help. Call our Hong Kong office on [+85 298632239] to find out how our global reach can assist businesses of all sizes to overcome their talent challenges.