A large number of multinational companies which have made China their key manufacturing base are now facing shortage of skilled and qualified workforce, a problem compounded by the restrictions on expatriate labour.
A survey conducted by the International Business Machines business consulting services found that top concern for CEOs of major corporations is the issue of human resources.
"Throughout the country, there is shortage of talent, senior electricians, technicians and engineers," a Chinese CEO was quoted as saying.
The pace of growth in China, says the survey, 'merely' compounds the skills shortage. "The rapid change in product requirements and evolving business climate make it very difficult to recruit in China," a CEO said.
Alongside the domestic skills agenda, the survey report says, runs the complaints of high cost and constraints of using utilizing expatriate managers. Shifting production to China, investing in training and using expatriate to lead that training is costly, the report says and quotes a CEO from Europe as saying, "We have too many mangers in Germany and not enough in Asia and China in particular."
Restrictions upon the expatriate labour, the
"In international operations, we see the bottlenecks in development of our staff. We suffer from high turnover of mid-level and senior executive, especially in China. This is a major problem in China: how to recruit, train and retain quality staff there," a CEO from Europe was quoted as saying.
The report says that a CEO from United States agreed with assessment. "There is a problem with the lack of qualified people in different areas in China, so there is risk in finding and training them."
In addition to recruitment and retention, the survey found, management of change is another key issue.
"The Western model moves fast but in China, we need to spend more time in building consensus," a CEO said and another concurred, "Change is the most difficult thing, especially in China."
The regulatory environment, the survey says, is another concern though it is recognized more as an "Asia wide issue."
CEOs, it says, consider regulation regarding the ownership of foreign subsidiaries and investment as limitation to their Asian business.