Oct 15 2013
The Peter Felix, AESC and BlueSteps President and CEO, recently had the opportunity to speak with Dr. Henry Wang, President of the China Global Talents Society, about current global executive search trends in China and the upcoming China Global Executive Talent Forum.
Peter Felix: Good morning, Henry, it’s a pleasure to talk to you this morning; you’re in Beijing, I’m in New York and look forward to our conversation this morning. Thank you for taking the time to speak with the AESC and BlueSteps about talent management and the shortage of executive talent in China.
First of all, tell us about the work you do at the Center for China and Globalization.Dr. Henry Wang: Yes, thank you for taking the time for this call. Center for China and Globalization is actually a think tank. It has been devoted to talent research globalization and other China-based global issues for the past five years. We’re particularly focused on studies on global talent issues. For example, we recently published a number of books in China and outside China and also published some papers and did some research. We’re particularly active in advising the Chinese government in terms of the talent plan. We also worked with some private enterprises on their talent strategies. Basically, we are the leading think tank on the global talent development in China.
Peter Felix: Thank you, that’s fascinating, and of course you and I have been working together, so I’m getting a better understanding of all of this.
One of the things that fascinates us is understanding what China is today in relation to globalization. Henry, what are the current challenges and where are the opportunities for China?
Dr. Henry Wang: Yes, well I think China has entered a new era of development. China has been, for the past thirty-some years, mainly been involved in becoming the Manufacturing center of the world. It has been utilizing its migrant workers and it has been very active in its domestic infrastructure. They have been building well-established infrastructure; the airports are quite well developed, speed highways, speed railways, etc. China is transforming its economy, particularly by going global through investment and trade. China’s international trade has grown five times and China’s foreign direct investment has grown over sixty times, which means there’s a lot of opportunity for Chinese companies to collaborate inside and outside of China. Since China is getting more and more globalized, Chinese companies are getting more and more globalized. Then, there will be more opportunities for foreign companies to come to China and for Chinese companies going global. Particularly, in the executive search industry, there are a lot of opportunities. Today, I think China is getting more talent-oriented, rather than heavily focused on investments. It’s updating its economy from being investment-driven to a more high tech and talent-driven economy. So we foresee more shortages and more interest from China on talent and on globalization of its country and its industry, so that’s where I see the opportunities are.
Peter Felix: That’s great. In fact, I remember you attended our global conference on executive search in March, in New York, and you talked about eight key transformations. You’ve mentioned one or two of them, but are there any others that are fundamentally important in Education, Social Policy, or other issues, such as the Environment? Can you talk about those?
Dr. Henry Wang: Sure, yes. In the last several of years, China has had a big transformation going on. China has to shifted from population dividend, which China has been heavily utilizing in the last few decades. China now has a large college graduate population of about 7-8 million graduates every year, so they have an enormous new labor force that is well-educated. China has shifted from population dividend to talent dividend. China is going to shift from “made in China” to more “created in China.” China is also going to switch from concentrating on attracting capital to more attracting talent. Also, China is going to be moving from being more investment-driven on the infrastructure to more talent-driven for a service economy and a more high-tech and well-rounded economy. There’s a lot of transformation going on in the last few years. China is not only utilizing domestic talent, but they are also going to expand and rely more on global talent in the future. Chinese enterprises, government, service sector, tech, universities, hospitals, social enterprises and think tanks all have a big need for global talent, which means there will be a big opportunity for foreigners to work in China. China has also started the Thousand Talent program, which will create big opportunities for foreign companies to come to China and a lot of Chinese talent will go abroad as well.
Peter Felix: It’s very clear from the outside that with this rapid growth that China is experiencing a talent gap. Although, as you say, there are a lot of new graduates being produced, but the speed of growth in China creates a shortage of experienced executives; and indeed when we’ve performed our Industry Outlook reports, for the past five years, executive search consultants have always ranked China as the number one market to experience a shortage. What are companies doing right now? Does it mean that in order to achieve growth that young people are being put into positions of responsibility much earlier? When there’s a shortage in the market, people often job jump rather rapidly. Give us an idea of the reality of the situation in China today as far as executive talent is concerned.
Dr. Henry Wang: That’s right. One of the biggest challenges is that China’s economy has already become the second largest in the world. When a country takes off economically, normally there’s a lot of companies going overseas and becoming international. After the Second World War, many European and American companies went global. After the 1964 Tokyo Olympics, Japanese companies started going global. After the 1988 Seoul Olympics, a lot of Korean companies went global. After the 2008 Beijing Olympics, we haven’t seen as many companies as we should have going global. I think the key challenge before them is that they’re lacking the international and global talent—particularly the executive talent. So that’s what hinders China on its going global efforts. This year, China has 89 companies on the global Fortune 500 companies list. Of course, if you count Taiwan, that number becomes 95. Most of these companies are domestic-oriented, so for those companies to have more international collaboration, be more diversified in the global markets and have a more global business, one of the key challenges they have is they don’t have enough global talent—particularly global executive talent. That’s the challenge that they’re facing. It’s extremely important that global executives from other countries can come to China and collaborate with China and help China find the right match and right executives. Right now we see that there are only a handful of Chinese companies who are very active internationally, for example Lenovo or Huawei. Most of them have a desire to expand internationally, but are unsure of how to attract the talent that they should have.
Peter Felix: It’s quite a challenge. Lenovo seemed to have done quite well in developing an international management team. Could you comment on them a little and Huawei?
Dr. Henry Wang: Those two are good examples. Lenovo has a very international pull. They have an American CEO and are all localized. Huawei also localized and I noticed that they are headed by an American now. Companies that want to expand internationally need to hire local talent and hire executives from experienced multi-nationals. China’s multi-nationals account for almost one fifth of the Fortune 500. They really should be capturing the same share of global executive talent, but they’re far from that level, so there’s enormous opportunity for global talent to collaborate with China and Chinese companies to expand their reach look beyond their territories to find global talent.
Peter Felix: I noticed that McKinsey had made a comment that China needs 75,000 leaders of this kind. They estimate that there are only 3,000-5,000 individuals who meet the criteria at the moment, which is a huge gap.
Dr. Henry Wang: That’s right. There are so many companies and different enterprises in China that need global talent, but there are only a few thousand available in the Chinese market. There is 20 times a need there and that needs to be addressed. China recently updated its foreigner’s access and entry law and has recently launched a new green card for foreigners. As these policies are placed, there will be more and more foreigners coming to work in China for Chinese companies, not only inside China, but outside of China as well.
Peter Felix: Absolutely. Tell us about the China Global Talents Society that was set up earlier this year. What is its mission and how is it structured?
Dr. Henry Wang: Basically, the China Global Talents Society is affiliated with the China Talent Society, which is part of the Ministry of Human Resources. The China Global Talents Society mainly focuses attention on global talent for China and also for the global talent exchanges with outside countries. The reason it was established was mainly to meet the global talent needs for China. Also, it is particularly meant to study and research the exchanges in this area. The China Global Talents Society is basically meant to serve the future of the global talent community inside and outside of China. This is a new platform for China to connect with the outside world on global talent and global executive talent as well.
Peter Felix: The AESC is excited to participate in the forum that is taking place in November with the Global Talents Society and the AESC in partnership. Can you describe to us the forum and what will take place there?
Dr. Henry Wang: Yes, the Global Talents Society of China and the ASEC are partnering to organize this China Global Executive Talent forum, which is really innovative because it’s the first time that the AESC and the global executive search industry has come to China in a large format. There are large executive search firms in China, but these mainly focus on the domestic and regional issues. This is the first time a forum will focus on global trends, which is a first for the industry and companies in China. This is really needed by companies in China and will help bridge a connection with the outside world. I think it is really good timing and it’s really good to put global search industries leaders in China in direct contact with companies in China and promote collaboration.
Peter Felix: Excellent, we’re looking forward to it and so are our member firms. This will be an excellent opportunity to focus attention not just on the need on the demand, but also on the issues that arise when recruiting global talent and when corporations and organizations develop their global reach. Obviously, it doesn’t happen overnight and it requires a lot of care and a lot of research and, of course, finding the right people.
I think that brings our podcast to a close. Of course, you and I look forward to collaborating over the next months as we prepare for this forum. I appreciate you taking the time this morning, or this evening in Beijing, and we’ll look forward to seeing you in Beijing in November.
About the Association of Executive Search Consultants
The Association of Executive Search Consultants (AESC) is the worldwide professional association for the retained executive search and leadership consulting industry. The AESC promotes the highest professional standards in retained executive search and leadership consulting through its industry recognized Code of Ethics and Professional Practice Guidelines. The AESC also serves to broaden public understanding of the retained executive search and leadership consulting process and acts as an advocate for the interests of its member firms.
BlueSteps is the exclusive service of the AESC that puts senior executives on the radar screen of over 8,000 executive search professionals in more than 75 countries. Be visible, and be considered for 90,000+ opportunities handled by AESC search firms every year. Find out more at www.BlueSteps.com.