China's executive talent market is facing a changing environment and the competition between multinationals and Chinese firms is becoming more fierce, say executives from Russell Reynolds Associates, a leading global executive search and assessment firm.
"Since our company came to China in 1997, we have noticed an evolution of the executive talent market," said Grace Cheng, the Russell Reynolds Associates' country manager for Greater China. "Now companies need new skills and competencies in senior talent to manage and grow business with increasing levels of ambiguity and complexity.
"Our own experience tells us that today's organizations require senior talent to go way beyond their typical functional responsibilities－such as demonstrating strong management, leadership and communication skills－and serve as strategic partners to other senior leaders.
"For example, over 90 percent of our successful candidates from our CFO searches in the region have had leadership experience outside the finance function. They stood out due to their commercial acumen, communication capabilities, relationship-building skills, and strategic mindsets. Moreover, multi-sector experience and an appetite for innovation and digital knowledge have become significantly more desirable compared to five years ago," said Cheng, who has 18 years executive search and assessment experience.
She said senior executives in the market are more sophisticated in seeking career opportunities and are selective and demanding when making career changes.
"Our research shows that executive talent in China wants significantly more to switch jobs－the 'switching premium' averages around 25 percent and that percentage is almost three times as much as that of leaders from outside of China, and the second-highest in Asia, just slightly trailing that in India," Cheng said.
She said her company also analyzed drivers of attraction for executives in China.
"We found that compensation, respect shown by the organization and future career opportunities are the most important factors influencing leaders in China's selection of potential employers. They also appear to value manager quality and leadership reputation more than their peers outside of China."
She said that during the past three decades of rapid economic growth, China's market drivers and environment have gone through drastic and fundamental changes, as has the competitive landscape for MNCs and Chinese enterprises.
"It is not an understatement to say that MNCs and Chinese firms are on the verge of a full-scale 'war' for executive talent," she said.
She said that while MNCs still remain a strong brand for employment, they are losing appeal for some top professionals who are increasingly concerned about intense competition and uncertain strategic directions MNCs face, as well as a glass ceiling for their career development.
"Before our clients were all from the MNCs, mostly the Fortune 500. Yet now the revenue from Chinese domestic companies already contributes 50 percent or more in some sectors of our business.
"For a long time, there have been two distinct pools of talent supply to MNCs and Chinese firms. The picture has changed in the past few years－we now see a steady flow of talent from MNCs to Chinese firms," Cheng said.
"MNCs' headquarters struggle to forge bonds with their local leaders. According to our research, many senior executives in MNCs' local organizations lack confidence in and hold strong skepticism toward their headquarters' understanding of the region. Local leaders think their headquarters lack understanding of the realities of doing business in the local market and listening to their opinions.
"Our research also suggests that, compared to their peers outside of China, of those executive talents in China, 50 percent are more likely to leave and 30 percent are more receptive to recruitment from other organizations, which leads to a highly competitive and fluid talent market," said Zhang Jin, the partner and leader of the firm's industrial and natural resources sector in the Asia-Pacific region.
"Leading Chinese firms are hungry for talent and they have created a brand for themselves as a place of bold vision, rich opportunities, and lucrative pay. The rise of private enterprises－especially those in emerging sectors such as the Internet and technology, private equity invested companies and venture capital funded startups－has created career alternatives for talent that never existed before," Zhang said.
In recent years, Russell Reynolds has dealt with an increasing number of customers from private companies, especially in the high-tech, consumer, industrial and energy sector.
"Changing market conditions and the evolving talent landscape are further aggregating the already imbalanced demand and supply of talent, making recruiting ever more challenging. MNCs must rethink their organization structure and leadership competencies for China, ensure culture fit in recruiting and up their game in talent retention. We also see an increasing number of MNCs are now making bets with high-potential talent," Zhang said.