Why Competition for Talent in China is Heating Up
by HRM Asia
Top Chinese talent used to prefer furthering their careers at multinationals than at homegrown companies. But a new Bain & Company report found that this is all changing.
The battle for top talent in China remains fierce, as expanding local companies and multinationals compete toe-to-toe to attract these star performers.
One reason for the competition, a new Bain & Company analysis found, is because many executives are more willing to forego a predictable career path at a multinational company in favour of the steep learning curves and career trajectories local companies can provide.
In the past five years, only 10% of leaders in multinationals have come from local firms, but almost one-third of leaders at local firms were employed at multinational companies within the same time frame.
To understand the mindsets of China’s workers today, Bain also analysed 25,000 LinkedIn China members, representing 220 major corporations across 18 industries.
The research uncovered some key similarities and differences between the characteristics of those working at multinational companies and those employed at local companies:
- They are highly educated: More than 60% of Chinese business leaders at the director level and above have advanced degrees. Leaders in multinational companies are twice as likely to hold MBA degrees vs. local firms.
- They are globally minded: Almost one in five Chinese business leaders has overseas work experience, but more than three in five leaders work for a multinational company with a major presence in China.
- They are young: The average age of business leaders in the study is 39, likely reflective of LinkedIn’s younger user profile. It also reflects the accelerated growth in business activity and leadership opportunities in China over the past two decades. Local firms have more leaders under age 35 than multinational companies.
- They are very mobile: More than 40% of leaders have changed companies in the past five years, with more than half of those job-hoppers also entering completely new industries.
- They are, increasingly, women: Women leaders are present in every industry in China. Overall, 40% of the leaders in the study were female, and among leaders under age 35, the study found an almost equal number of female and male leaders.
Consequently, companies that are aware of the impact of this unbalanced exit are rethinking their structure, roles, value proposition and ways of working to reverse the flow.
“Just a short time ago, multinational companies were considered the best place to build a career in China, due to leadership development opportunities, access to global best practices, attractive compensation packages, and culture, which won over many business leaders,” said James Root, a Bain partner and co-author of the report.
But now, locally owned companies have also matured and upped their game in their internal talent development programmes, creating new opportunities for local talent.
“As a result, multinationals can’t take for granted their ability to attract the best and brightest,” Bain added.
Stephen Shih, one of the report’s co-authors and a partner at Bain, said: “HR leaders need to benchmark their employer brand attractiveness against best-in-class companies, regardless of industry.
"They also need to ensure they are searching for candidates broadly, and not just fishing within the same set of competitors in their sector."