China in 2015
The Brewing Talent War
Having already engaged in a major talent grab, China is planning a significant transformation of its human resources, one that will affect labor markets around the world.
The Brewing Talent WarBy Sherry Lee
From CommonWealth Magazine (vol. 456 )
Every few years, China tells the world an earth-shattering story. First it was the tale of an economic miracle, then one of explosive productivity.
But the new story that will take shape over the next five years will have implications for anybody who works. Under its 12th five-year plan, China will experience the world's largest-scale manpower migration and talent transformation ever.
In the past three months alone, China has released two significant documents that outlined new policies on labor management.
Kingdom of Talent by 2020
One of the documents was the State Council's "2010-2020 Medium and Long-term Talent Development Plan," China's first-ever long-term human resources initiative.
The development plan first identified China's triple-headed manpower threat: a lag in talent development compared with advanced countries; a lack of high-level innovators; and a less than ideal structure and deployment of human resources. The plan's goal is to nurture a large, structurally sound, rationally deployed, high-caliber talent force by 2020, and join the club of nations with the world's strongest human resources.
Complementing the plan was the second major policy pronouncement, the Ministry of Education's "2010-2020 Medium and Long-term Education Reform and Development Plan."
These new policies seek to overhaul China's manpower model of the past three decades.
Beijing hopes to break loose of its reliance on labor-intensive, polluting factories for economic growth, but any move toward upgrading industry and forging a financial center will require "talent."
In the two voluminous policy pronouncement guidelines, China clearly indicated its intention to adapt a pyramid-style human resources strategy as part of plans to transform its current unsustainable development model.
Talent to Support Economic Transformation
The first strategy is to recruit top-notch talent in all fields at the top of the pyramid to shoulder the burden of China's economic transformation.
Shortly after the global financial meltdown hit in September 2008, and unemployment rates in Europe and the United States surged above 10 percent, China turned crisis into opportunity by hunting for talent from among top financial and technology professionals who had just been let go.
Over the past five years, China has carefully researched a battle that could change the face of the world – the talent war.
It found that while many countries were able to attract or retain top talent, China was suffering a brain drain, as many of its top scholars and scientists studying abroad were not returning home (with more than 400,000 people leaving China every year).
To counter the problem, the country has been on the hunt.
First, it established the Changjiang Scholars Program, attracting outstanding academics to the country's universities. Then, in 2008, the Organization Department of the Chinese Communist Party's Central Committee began promoting a "Recruitment Program of Global Experts" that aspired to draw 2,000 business and scientific elites working around the world back to China along with cutting-edge technologies over a 5-10 year period. As an incentive, Beijing has offered them signing bonuses of 1 million renminbi.
At the same time, provincial governments are imitating the central government. Sichuan Province's plan aims to recruit 200 top personnel back to China over the next 5-10 years. The plan has already achieved some success, recruiting 34 elite personnel within two years.
The central government's Talent Development Plan will further invigorate and deepen the country's elite talent pool.
The plan calls for establishing 100 "scientist workshops" in scientific and research disciplines where a relative advantage exists and cultivating an elite team of leaders.
Much of the plan's might will be directed at institutions with relatively weak human resource structures within the government, the Communist Party, and state-run and private enterprises, complemented by heavy funding to nurture talent. James Chan, the chief innovation officer of management consultant BMGI's Greater China operations, estimates that China will invest 600 billion renminbi in personnel education and training at the government, party, and state-run and private enterprise levels this year, 200 times more than 10 years ago.
Linda Jakobson, the Beijing-based director of the Stockholm International Peace Research Institute's China and Global Security Programme, observes that while the educational level of China's leaders at every level is growing stronger, they still are products of the party school system. In a complicated globalized world, a need still exists for a more diverse and open structure, she argues.
The pursuit of improvement in depth follows Singapore's model. Beijing has long sent talented party members to Singapore to study, and the new talent development guidelines also include provisions to send newly graduated high school or university students to elite schools abroad to further their education. Through targeted talent cultivation, Beijing hopes the program will help produce high-caliber, specialized management personnel.
Aside from recruiting elite personnel, China's second strategy is to develop a huge pool of professionals and entrepreneurial talent in the middle of the pyramid.
Because China is striving to upgrade its secondary industry (manufacturing) and accelerate the rise of its tertiary industry (services), which currently accounts for only 40 percent of GDP, it urgently needs a group of entrepreneurs and experts with modern management skills and an international vision.
The Talent Development Plan especially stresses the goal of cultivating 10,000 operations management specialists within 10 years who are proficient in strategic planning, capital utilization, human resources management, accounting and law.
Also drawing considerable outside attention is China's ambition to expand the political, economic and diplomatic influence its enterprises, particularly state-run companies, have in the world, and the Talent Development Plan has also set specific goals in this area.
China wants to cultivate 100 strategic entrepreneurs within 10 years who are capable of leading Chinese companies into the world's top 500; train 40,000 people with international capabilities for state-run enterprises and state holding companies; and hire at least 50 percent of top executives at state-run companies based on competitive criteria.
Cultivating more entrepreneurial talent is also a target of China's initiative to expand the middle of the pyramid.
Nurturing More Jack Ma's
Over the past five years, China has created 46 million new jobs (in contrast, the U.S. over the past two years has seen 7 million jobs disappear). Yet at a time when there is a large surplus of manpower in the countryside looking for work, employment remains the Chinese government's biggest burden.
China's most prominent entrepreneur in recent years is Jack Ma, chairman and CEO of the Alibaba Group – parent company of the hugely popular consumer-auction website, Taobao.com. Every year, roughly 100,000 people create new virtual shops on Taobao.com, thus generating a large number of jobs indirectly. Ma's dream is to "create 100 million jobs for the world's 10 million small- and medium-sized enterprises."
In the coming five years, the manpower strategy for those at the bottom of the pyramid is especially critical. The main focus will be to raise the skill level of this group that encompasses migrant workers, and high-quantity, low-quality university graduates.
The initiative is particularly urgent because China's overall wages have risen nearly 40 percent over the past year, allowing India and Vietnam to supplant the country's cheap labor edge.
To improve the training of its work force, China has also conceived a medium- and long-term plan to develop a team of technical specialists between 2009 and 2020, part of which enlists the help of foreign enterprises, including Taiwanese companies. Policies such as the creation of cross-Taiwan Strait agricultural development parks with the help of Taiwanese entrepreneurs and experts have introduced agricultural management and technical skills and helped cultivate agricultural specialists.
The plan has also lured the huge pool of university, master's and PhD students to enterprises to help them resolve real-world challenges. The Chengdu Hi-Tech Industrial Development Zone, for instance, established a "PhD work station" in 2005, following the examples of Beijing's Zhongguancun technology hub and Shanghai's Pudong in building.
Yuan Zongyong, the director of the Chengdu Hi-Tech Park Personnel, Labor and Social Security Bureau, says that when PhD candidates join the work station, they receive a 100,000 renminbi subsidy over two years in addition to their regular salary from their employer. There are many benefits. The PhD student receives guidance from both the enterprise and the school, the company gains a skilled employee, and the university's research grows more pragmatic, creating stronger PhDs when they graduate.
To deal with the "diploma bubble" created by the country's 6 million university students who graduate every year, China has adopted a "one village, one university student" policy that sends talent inland. The approach both toughens up the individual and helps alleviate the lack of talent at the grassroots level in central and western China.
The government's goal is to send 100,000 university students to work in less developed villages within the next five years.
China's 12th five-year plan, to be introduced in 2011, will shift the government's manpower priority from quantity to quality. The government's biggest challenge, aside from executing the plan, is raising the quality of workers at the bottom of the pyramid.
But this group, steeped in traditional thinking, is massive and widely dispersed. That means China will have to invest even more money and engage in more intensive persuasion to lure talent inland and to remote areas. Only then can it shed its label as the world's factory and narrow the widening gap between city and countryside.
At the very least, however, even before the 12th five-year plan has been unveiled, China has already begun to unleash a manpower migration whirlwind, a talent recruiting war that is sure to even engulf Taiwan.
Translated from the Chinese by Luke Sabatier