China’s HR Outlook for 2019
2019 is set to be an exciting year for the Greater China HR market, with many companies increasingly pivoting their HR focus to the world’s second largest economy.
As one of the largest and quickly growing global markets with a significant workforce, China provides senior HR leaders with an opportunity to be at the forefront of trialling new and innovative approaches.
The China Advantage
With a comparatively stable political landscape, China offers businesses the advantage of being able to plan over longer-term timeframes and invest more heavily in rapid growth. Coupled with the size and importance of the Greater China market, this means that both MNCs and local companies are willing to invest significantly in securing top talent and growing their workforces quickly.
The larger workforces mean that HR leaders in China are often at the forefront of digital developments including big data, predictive analytics and AI. They also often have fewer restrictions in terms of existing processes than their APAC counterparts, giving them more scope to trial new approaches.
Local companies have a strong reputation for digital adoption and also have the added advantage of being able to make decisions locally, which means they can execute across the China market at speed. Fewer reporting layers also help to give HR leaders in local companies a greater chance to have a greater influence on the broader business.
Roles in Hot Demand
For many MNCs, China is now being spun off to be a region of its own separate from APAC, with direct reporting lines to the global HQ. This is increasing the need for senior HR leaders with the gravitas and experience to operate at both a regional and global level. This also provides an exciting opportunity for China-based HR leaders to have a greater influence on MNCs’ global approaches.
Whilst local companies and start-ups still hold a large attraction for HR leaders, we are starting to see MNCs begin to win back more top talent through their global career development opportunities. In turn, this global experience is then particularly valuable for Chinese companies looking to expand globally into new markets.
Strategic HR business partners remain in hot demand, particularly those with significant experience in strategic HR, workforce planning, organisational design, culture change, and talent acquisition. Automation and AI are also beginning to play an increasing role in HR, particularly in areas that have traditionally been within the domain of an HRBP. As such, the role of HR business partner is increasingly facing pressure to step up to become a much more commercial, high-impact sparring partner to the C-suite executive team, including leading the strategy on long-term workforce development and talent planning.
In this sphere, it is often those HR leaders with career stints outside of China that are in the highest demand. HR talent with an international education and work experience continues to be highly sought-after due to their more global mindset as well as the learning agility that they demonstrate. With the growing focus on attracting the right talent in this critical market, businesses are also investing significantly in HR leaders who specialise in talent acquisition, development and retention.
The desire to have the right workforce strategy in such an important market also means companies are willing to offer higher salaries for the right HR expertise. However, we are also seeing a slowing in the pace of growth for salaries, and it is becoming less common for candidates to be offered double-digit figures when switching companies. Some companies are choosing to lure talent with stock options and sign-on bonuses. Other benefits, such as flexible working arrangements and the chance to work on significant international projects, are also playing a role in attracting and retaining top HR talent.
Top of Mind for HR Leaders
In the coming year, many HR leaders will be focusing on how they can build a sustainable workplace into the future. This includes managing an ageing workforce, as well as developing the next generation of talent. This will become particularly critical as a large cohort of baby boomers in senior positions get set to retire, and a new generation of leaders needs to be upskilled to help take their place.
HR leaders will also be increasingly focusing on supporting their organisations to become more inclusive, flexible and employee-focused in order to attract and retain top talent into the future. Workplace wellness programs will continue play a significant role in this, as well as CSR and a greater focus on employee value proposition.
A tightening regulatory environment also means that HR leaders will be placing a greater importance on the protection of employees’ data and privacy. This is becoming even more critical given the recent advances in big data and the collection of much more detailed personal information to help support personalisation of employee engagement.
2019 is set to be an exciting year for China’s HR leaders. We look forward to continuing to update you on the latest innovations and issues in HR, and discussing these with you at our ChapmanCG HR leaders roundtable events.