Retail growth in China means finding skilled recruits can be a struggle, says Rebecca Thomson

Recruiting in China

  • Some sectors’ growth in China is outstripping the growth of available talent to fill vacancies
  • Retail is the latest industry to experience this, with UK companies enjoying success but struggling to fill some jobs
  • Competition is tough - brands that are big in the UK may not be well known in China, which makes attracting good staff harder
  • Wage inflation is the result, so sometimes it is cheaper to bring in expatriates than hire locals
  • The only answer is long-term investment in local talent and, if necessary, using UK staff to fill roles in the meantime

The fast growth of the Chinese retail industry is good news, but the speed of development is bringing recruitment challenges. It may have the largest population in the world, but finding Chinese citizens who have the requisite skills to maximise the retail opportunities in this emerging market is proving tough.

Not only is China experiencing wage inflation, making it more expensive to hire, Kingfisher chief executive Ian Cheshire says there is also a “big trend around retail talent in China”. Kingfisher’s B&Q chain has 40 stores in the country. “You’ve got a fairly small pool of established retailers, but there’s no long history of retail talent.”

Nick Thomas, executive director at the China-Britain Business Council - an organisation that helps companies grow in China - agrees. “Any sector that’s growing very fast in China tends to run into a shortage of people, particularly at a senior level.” In fact, in some cases it can be cheaper to bring in expatriate staff than employ increasingly expensive local people.

All of this spells good news for talented retailers in the UK who want to work in China. Guy Salter, deputy chairman at industry body Walpole, which represents the UK luxury sector, says: “It’s become more expensive to hire local people, and although there’s still a definite feeling that it’s better to employ someone local, there’s a fascinating opportunity for UK staff in China,” he says.

UK retailers are also starting to see limitations in the first wave of local talent they tapped when they first moved into the country in the 1990s. Some are questioning whether enough have the skills retailers need to reap maximum commercial advantage from China’s burgeoning middle class.

However, the increasing retail employment opportunities in China also bring many challenges for retailers’ HR teams and recruitment companies alike. The top talent is at a premium - competition for those people is fierce and the best will be quickly snapped up. “The economy is growing faster than the talent pool can keep up with,” says Thomas.

There are ways to deal with the workforce challenges that China presents, and that will largely be through a combination of investment in recruiting and training local people, as well as bringing in expatriate staff to fill in gaps. The Chinese retail market will mature, and the problem won’t last forever, but solving it will require long-
term thinking.