The Challenge of Managerial Staff Shortage on the Chinese Labor Market - The Development of HRM in China

  • One of the major challenges today is the global shortage of managerial staff. Globalization and opening up of new markets lead to a steadily rising demand, but the supply of Western talent is decreasing. Now enterprises tend to seek skilled personnel in rapidly developing economies such as China. China as a fast growing economy is usually assumed to have a vast number of low-cost workers and a bountiful supply of talent. This perception is likely to turn out to be a miscalculation endangering efficiency, growth or even the existence of enterpriOne of the major challenges today is the global shortage of managerial staff. Globalization and opening up of new markets lead to a steadily rising demand, but the supply of Western talent is decreasing. Now enterprises tend to seek skilled personnel in rapidly developing economies such as China. China as a fast growing economy is usually assumed to have a vast number of low-cost workers and a bountiful supply of talent. This perception is likely to turn out to be a miscalculation endangering efficiency, growth or even the existence of enterprises that are willing to enter the Chinese market. However, not only foreign enterprises located in China suffer from talent shortage. State enterprises are also affected by competition for managerial staff. The remains of the socialist era are not yet completely overcome, especially with respect to human resource management (HRM renli ziyuan guanli). Combined with the demographic shift towards an ageing society caused by the Cultural Revolution, the One-Child Policy and a higher life expectancy, the upcoming shortage could impede economic growth. It is the cause of an increase in wages and competition, as well as rapidly changing enterprise and HRM strategies. This thesis basically concentrates on the development of the HRM sector with regard to recruitment, retention, motivation and performance appraisal of managerial staff. The current situation of staff shortage also requires a closer look on the recruitment strategies for the future generation of leaders, which are today’s young graduates. The thesis will not deal with the shortage of chief executive officers (CEO) as their turnover is closely related to shareholders and enterprise performance. Explaining this aspect would go beyond the scope of this thesis. Consequently, this thesis focuses on the central aspects of HRM under three main angles. First, HRM practice in China originated in the Mao era and in the shift from state control to reform and market liberalization. The Party planned every aspect of HRM and created a soft budget constraint. These factors prevented the development of efficient and profitable HRM strategies. Market liberalization and the state’s retreat from labor market control led to the initiation of competition. In order to adapt to these changing conditions, enterprises had to rationalize production, financing and human resources. The responsibility was gradually handed over to the enterprises, which now have to cope with market mechanisms and emerging challenges. Then, the current challenge to HRM is subject to the second part of this thesis. Managerial staff shortage is influenced by policies adopted a long time ago, but also by long distances immobility of staff. This narrows down the number of suitable personnel despite the national supply and leads to a high competition between enterprises. Competition related problems are increasing wages, which trigger a high turnover rate. Companies in China need to find a solution to all these problems as to not endanger their economic achievements. Finally, the third part analyzes the development and new approaches of the HRM sector towards recruitment, retention, motivation and assessment. The future developments are uncertain and depend on the pace of adaptation to new challenges. In spite of that, the fourth part not only summarizes the main aspects of this thesis, but also tries to give an outlook. Concerning actuality and reliability of sources it has to be stressed, that the Chinese labor market has not been subject to studies on HRM for many years. Therefore, most of the references used in this thesis are newspaper articles and internet sources. They are most suitable to represent the current conditions on the labor market. In this respect the Hudson Reports and the study by Diana Farrell were important, as they are reliable sources for numerical data. The interview with Madelaine Pfau was essential for this thesis, since her experiences with the Chinese market offered insight into the subject. Several of her ideas and opinions were the basis for further research, such as the suggestion to take a look at the HRM of Haier. The minutes of this interview are attached to my thesis. The Chinese sources consist of two research studies, an internet newspaper article and a publication from BriTay. One of the research studies deals with the adaptation of the Behavioral Event Interview to the Chinese HRM. The other gives an introduction to the HRM strategies of Haier. The newspaper article covers the use of competency models in China and tries to give further suggestions to the topic in form of an interview. The last suitable Chinese source is also an internet source from BriTay. BriTay is a consulting and management service company that was acquired by the international consultancy MRI worldwide in 2002. Therefore, BriTay was considered to be another reliable source for this thesis.show moreshow less

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Metadaten
Author: Vanessa Rieger
URN:urn:nbn:de:bvb:20-opus-34437
Document Type:Bachelor Thesis
Granting Institution:Universität Würzburg, Philosophische Fakultät (Histor., philolog., Kultur- und geograph. Wissensch.)
Faculties:Philosophische Fakultät (Histor., philolog., Kultur- und geograph. Wissensch.) / Institut für Kulturwissenschaften Ost- und Südasiens
Referee:Prof. Dr. Dieter Kuhn
Date of final exam:2008/06/30
Language:English
Year of Completion:2008
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
GND Keyword:China; Personalbeschaffung; Personalpolitik
Tag:China; human resource management; personnel recruitment
JEL-Classification:M Business Administration and Business Economics; Marketing; Accounting / M1 Business Administration / M12 Personnel Management
O Economic Development, Technological Change, and Growth / O1 Economic Development / O15 Human Resources; Human Development; Income Distribution; Migration
Release Date:2009/03/04

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