How China’s growing emphasis on productivity and sustainability with impact recruitment

China has recovered significantly from the economic impact of the Global Financial Crisis and remains a huge growth region. Organisations in China are developing higher expectations in terms of return on investment, resulting in growing pressure to ramp up productivity. Richard King, Managing Director, Michael Page China explores the reasons behind this and what it means for the future of China’s professional employment market.

According to a 2012 report by Ernst & Young (EY), China’s declining export growth to key markets in Asia, Europe and North America, as well as competition for investment from other economies, has directly cumulated in the need for organisations to focus on internal productivity in order to drive sustainable growth.

China’s business leaders are aware that past experiences of other East Asian economies have demonstrated that capital-driven growth alone is not sustainable.

As stated in a report by The Economist, China’s GDP per worker is only 17% of America’s. China’s leaders have recognised this, as evidenced by the shift from a growth pattern to a consumption-led, efficiency-focused growth scheme as a key objective of the 12th five year plan (2011-15). This, of course, presents both opportunities and risks, especially in the realm of recruitment.

At Michael Page China, we too have heard increased rhetoric from clients that they are seeking out top tier talent in a bid to improve productivity rather than simple top line revenue growth. This has translated into a healthy demand for skilled professionals across various industries.

Making improvements to the procurement and supply chain function is one of the most direct ways to impact productivity. Organisations have now increased their focus on sourcing talented professionals to fill roles handling indirect procurement to ensure both value for money and higher quality from vendors while roles in direct procurement help save costs and ensure a higher quality of raw materials. In addition, roles focusing on supply chain optimisation help enhance the efficiency of supply chains and reduce waste, resulting in long-term company savings and improved profitability.

Hiring experienced finance professionals for FP&A and business partnering roles who can provide superior decision support ensures the business is well placed to make informed decisions about investments and focus on profitable lines of business. Additionally, organisations rely on the same support to streamline processes that help with both speed of reporting and productivity enhancement.

With the advent of the internet and the digital age, traditional marketing methods have been circumvented by more innovative, complex and sometimes more cost effective, replacements. Professionals with expertise in digital channels, such as digital marketing and e-commerce, means a company can target, market and deliver their products and services more efficiently and build sustainable, long term relationships with customers. These roles capitalise on customer demand to drive sales. Additionally, efficient use of technology has contributed to improved productivity.

Companies looking to attract the best talent in the market in order to increase productivity will need to rely on a strong team of HR professionals in roles in the area of compensation and benefits. These roles ensure organisations effectively reward and retain their top talent, driving workplace satisfaction and, as a result, higher levels of productivity. Similarly, Senior Talent Acquisition Managers/Directors, who can help attract and secure the right talent for respective roles across the organisation, are highly valued in the current market. Such roles help organisations stand out from their competitors – providing a better opportunity to secure top tier talent in China.

Technology has become an increasingly important factor for organisations looking to drive productivity and profitability. The reach of technology is far and wide – from marketing metrics/analysis that help target the right market and decide which channels to use for marketing activities, to IT programs and support which improve reliability, and ultimately productivity. Essentially, advances in technology are expected to enable faster, more efficient systems and reporting that provides data to support business decisions.

Legal roles generally do not directly impact productivity, however those specialising in contracts, anti-bribery and anti-money laundering can help reduce risk. A strong legal team will be well positioned to identify and prevent breaches in regulatory or legal responsibility, thus reducing the risk of penalty to the organisation. Financial penalties have a direct impact on profitability and overall business performance and organisations have been investing in their legal departments, driving growth in the in-house lawyer job market.

Many companies have invested in their Quality Assurance (QA) functions in order to ensure that quality standards are being met, while reducing waste and eliminating substandard products. Also, roles such as Process Engineers help streamline processes which directly impact productivity levels. Although all of the above mentioned business functions add to improved productivity, professionals in technology, procurement & supply chain as well as engineering & manufacturing will offer the most scope to improve operational efficiency. Meanwhile, finance and technology professionals are able to support their employer with decision-making processes to improve productivity. Finally, HR will help improve productivity through optimising the use of human capital.

China currently represents a key market for most multinational companies as it offers a growth opportunity for almost every industry sector. As other large economies such as the US and UK continue to recover, and the availability of growth opportunities in South East Asia increases, there will be more markets competing for investment. As a result, organisational leadership will favour investments that are able to generate profits faster. And for now, one major solution is a focus on productivity.