Generation Y 2.0

So much has been written already but what is happening right now and what do we need to be thinking about when it comes to the China’s future workforce?
Although China is experiencing a slow down in exports and property sales, it remains one of the least exposed countries in the financial crisis. Many hope that this will lead to closer ties and cooperation with the western continents and ideally support the IMF in the global crisis.
While many may fear China’s growing superpower, what would happen if China was not able to sustain its markets in years to come? Amazingly, with a population of over 200 million in the Generation Y age group, way outnumbering the 7% over 65’s, and 5 million graduates entering the market each year, China is still struggling to find the right talent, especially in key positions and with few top talents in the pool, the long term future of China’s leadership is still uncertain.

Mercer found that some of the challenges were to find candidates with the right qualifications, language skills (such as English) and the employability factors necessary for the workplace roles expected of them. There are swelling numbers of engineers coming onto the market, keen to learn more but needing time and further investment in order to bring value to businesses. Perhaps all this is indicative of the higher education system and weak ties to industry, it is difficult to tell right now, but what is clear is that organisations in China have a huge talent planning and development challenge ahead of them.

Having seen nothing but a boom in China for some years, the economic pressures are still a shock and worry for many there. Some state owned enterprises are facing consolidation of their huge workforces, attempting to keep their best talent, even though the government has been keen to prevent job losses. Others are still expanding, needing to recruit large numbers of people who can work in an international context. It is still the private sector that could be facing the biggest challenges, however, with increasing production costs, still adjusting to labour law challenges particularly around fixed-term contract workers, labour disputes as employees have become more aware of the rights, reduced export orders, inflation, and so on. Some may argue that this may have been coming to China anyway as it develops. Chinese owned companies have been buying their talent from multinational organisations, where perhaps employees are able to make themselves more marketable with the experience and learning they gain. Atttition rates for GenY have been rather high in comparison to their predecessors in China, 20-40% in some cases.

Competitive reward packages have been changing in the last two to three years but talent planning, attraction, retention, development and people management are all issues that need a great deal more attention. Good quality managers, senior managers and all round business leaders are hard to find at the best of times in China, so what is being done about it?

With HR functions still relatively underdeveloped in China for varying reasons, and those in multinationals having their ‘hands tied’ by their parent companies, this leaves the question about who is taking ownership of talent strategy and able to address it.

Local companies have been looking to other cities to find cheaper talent so that they remain competitive and many multinationals continue to place expatriates in China (from UK, Hong Kong, Singapore and Malaysia for example). Some bring Chinese engineers to Europe for training before returning them to their homeland as well as trying to send those Chinese born and bred outside China to help bridge the gap. But there is little evidence of doing much more than that. Localisation strategies appear to be no more than talk for many, with all but a few leading multi-nationals including China in their leadership development programmes, it is not clear how much sophistication goes into development programmes at lower levels.

And so what of China’s youth? Teenage author Michael Stanat, wrote China’s Generation Y: Understanding the Future Leaders of the World’s Next Superpower in 2005 (See also our earlier article about this, in French), but much of it holds today. We all know that China adopted the mobile phone as soon as it became connected and we have visions of youngsters sitting behind their computers, playing with software and internet games, changing their gadget accessories and applications almost on a weekly basis. They are become more ‘green’ conscious and are better educated than their parents, are savvy and brand aware, big spending and entrepreneurial and, as such, GenY is still a major target for marketing campaigns despite talk of cost consciousness and cutting back.

Working with China is still seen to be a potential major competitive advantage.

“This youth marketplace is having a major ripple effect that continues to shape global business strategies-making Chinese youth culture one of the most sought after new markets in the world.” (www.researchandmarkets.com, 2009).

But representing such a large proportion of the world population, these will be the individuals that will have learnt to survive and thrive in a recession, will come to travel the world (as many foresee themselves doing) and lead and create new enterprises of the future.

How will management practices change? The introduction of global whistleblowing polices has already proved to be an interesting challenge in China where it has traditionally been deemed to be highly disloyal and career limiting to speak out against their command and control management. Our vocal GenY will be pushing these boundaries further. Current Chinese leaders of the right calibre, expected to run large enterprises and multi-national subsidiaries, with all round skills are still rare. They are often seen to be lacking in strategic thought, certain aspects of business acumen, innovation and creative problem solving skills despite many being cunning, but are often strong relationship builders and are loyal and resilient.

Our GenX in China see themselves as a friendly face and pride themselves in building their relationships and networks and many appear hungry to learn from international organisations. Y’ers in China are no less keen, they are thirsty for overseas education programmes and opportunities, and new forums to share ideas and opportunities. However, today’s teen ‘net fluent’ (or ‘cyber-’ as they are referred to there) population are feeling the pressure from their GenX parents, and stories of depression and rebellion continue to emerge. Meanwhile young entrepreneur associations are still forming formally and informally and social media is spreading.

So it’s time for China to address it’s talent gap issues and for us to think about how we can support that for mutual benefit.; there is a duty to the youth of today and the leaders of our future.

Here in EMEA we may think of China being far away or not yet connected to our businesses and that we ourselves have different challenges with a more ageing population; but with some countries in the region having more than 50% of their demographic under the age of 30 (and most 30-40%), this is also a group of future world leaders that needs to be nurtured, especially if they are going to be working with our Chinese counterparts in a more cooperative way.

So talent planning and management practices need to be carefully thought through, considering the rapid pace of change and with some tailoring to Chinese culture. Organisations need to look increasingly at ways to develop Chinese staff from within, including secondments, projects, mentoring, and other forms of training. Forms of interactive and blended learning and communications, including use of social media style technologies may all be effective ways to spread the word and all of which can be done without huge investment but needs to be well thought through. Successful organisations in China are thinking big picture, planning long term and looking to carefully select the right talent to buy in and above all tailoring their learning & development programmes. Stronger ties with universities and business schools may also be a shrewd investment.

As we always say why not ask GenY what they would like to get involved in and what they think may be good ways to gain experience and share know-how how, they can be pretty ingenious and resourceful!

How is the Chinese talent gap affecting your organisation? What are your challenges and perspectives on working with China? How are you finding GenY behaviours there? Are you developing new talent strategies in China or other parts of Asia? Are your leaders ready to work alongside their Chinese counterparts in the future?

This entry was posted on Saturday, March 14th, 2009 at 7:51 pm and is filed under Country Spotlight, Genera(lisa)tion Y, Leadership, Talent Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.