Job Hopping in China
May 8th, 2006 | by This is China! |-from Beijing
I recently read in the April 2006 edition of China Economic Review that in Shanghai people in their twenties change jobs an average of every 17 months. It’s no wonder that foreign-invested companies are finding their number one challenge to be employee retention. Statistics seem to indicate, though, that the issue is more than just Western companies being savvy enough to keep local Chinese talent or with deep enough pockets to keep them in tow with golden handcuffs or creating a family atmosphere that keeps them feeling warm and fuzzy.
So much of the churn of local staff is simply the result of a hot market that – at least within the Yangtze River valley – which includes Shanghai – it will be another three to five years before the labor market settles out and Chinese can stop popping around foreign invested companies like fleas on a very shaggy dog.
Why three to five years? By that time I estimate that infrastructure costs combined with land and building-lease costs will have topped out at uncompetitive levels that will have forced investment activity further out West in China. Further west - that is, beyond a 200 km radius outside Shanghai – land prices are less than in the Yangtze River Delta (as well as in and around Beijing and the Pearl River Delta, in the deep South of China). The labor pool out west is also plentiful, though finding skilled labor of the caliber of that currently being trained along the China coastline is and will be a challenge. However, the outlying provinces will more and more attract back to its cities the university-educated locals that had hurled themselves into the more developed economies along the China coast.
The supply-demand equation of foreign companies investing and still willing to pay the costs of job-hopping staff in the East will move to the supply side, in which the number of able staff will increase and the number of willing foreign invested companies will level off in the East, if not actually decrease. As well, competition for jobs will be more fierce as graduates from the past two years will acquire the experience that will make them valuable to global companies, and experienced staff in the West give the Easterners a run for their money.
In three to five years, then, things should have settled down along the east coast enough that foreign-invested companies can re-patriate the expats that currently fill the leadership and management roles so difficult to fill solely by local staff.
By then, the game of musical chairs that local staff enjoy playing so much will come to an end, at least in the developed East of China.
