Talent - a potential game changer for Chinese companies
[16 March 2012]
Talent constraints squeezing competitiveness
Talent could prove to be a potential game changer to the growth prospects of Chinese companies. This is according to PwC’s 15th Annual Global CEO Survey that explores Chinese CEOs' focus on developing talent and boosting innovation in their bid to capitalise on the Chinese economy's still-promising growth outlook and burgeoning domestic consumption.
The reports shows more than half (54%) of Chinese CEOs – far higher than the 40% globally - 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, especially as the focus of growth in China is now shifting from export to the domestic market,” says PwC Partner and China sector spokesperson Colum Rice.
“The survey tells us Chinese CEOs recognise this challenge and are focused on developing their people rather than simply hiring them,” adds Mr Rice.
To bolster their workforces, half of Chinese CEOs plan to expand their headcount by more than 5% this year (vs. 28% globally). Yet, 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, Chinese 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 Chinese CEOs are partnering with other companies to help overcome talent deficits.
Meanwhile, with limited 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 change the fact that this 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 Mr Rice.
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 be of critical importance to economies, such as New Zealand, that export to China. 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.
Notes to editors:
You can download PwC’s 15th Annual Global CEO Survey – The View from China on www.pwc.co.nz
'China: transforming value for growth' is a China-focused analysis of PwC's Annual Global CEO Survey, now in its 15th year. For PwC's 15th Annual Global CEO Survey, 1,258 interviews were conducted in 60 territories in the last quarter of 2011 – including 122 from China and 38 in Hong Kong. In depth interviews were also conducted with 39 CEOs, including three based in China. The report draws views and insights from 160 top management executives in China and Hong Kong, and seeks to inform and engage the business community about the key concerns and goals of CEOs in this part of the world
PwC’s 15th Annual Global CEO Survey – The View from China is a summarised report of the responses from CEOs in China and Hong Kong.