China's gross domestic product accounts for around 18 per cent of global economic output and is equivalent to the European Union's. The APAC region represents more than one-third of the global economy and shows dynamic growth. This holds considerable opportunities for European companies. But without the right leaders, they remain untapped, as Julia Larsen-Disney, Director of Mercuri Urval China, and Ricky Foo, Partner & Director of Mercuri Urval Singapore, explained at an event in the company’s office in Vienna.
China with its 1.4 billion people has long since made the leap from being an extended workbench to a highly innovative economy. The country is a leader in many fields of technology, including important components for the energy transition such as batteries for electric cars or solar cells, and present itself as a target market in itself that cannot be avoided by many companies. The Covid-19 pandemic, on the other hand, has shown the dangers of interrupted supply chains. Companies are therefore well advised to rethink their China strategy against the background of an opportunity-risk analysis. With regard to skilled workers and managers, demographic change is also making itself felt in China. It is increasingly becoming a challenge to recruit and retain qualified employees. Salaries and additional benefits have to fit. Conversely, foreigners can be employed either on local contracts or expat contracts - or both. A strategic question is therefore: how should multinationals recruit from China's increasingly skilled talent pool while benefiting from global talent flows?
Even without China, the APAC region has an impressive 2.3 billion inhabitants, 1.4 billion of whom live in India. However, anyone who thinks that a shortage of skilled labour is not an issue is mistaken. It is precisely the high growth dynamic that ensures that there are more jobs than relevant applicants. In addition, international companies are increasingly pursuing a China + 1 strategy in order to diversify the dependency of their Asian business or investments. Therefore, they are increasingly looking at countries such as India, Indonesia, Singapore, Vietnam, Thailand and Malaysia. But India as the fifth largest economy in the world is a very complex structure, which is illustrated by the number of no less than 23 official national languages, English and Hindi being the most important ones. One thing is safe to say: There are no shortcuts in hiring leaders. The focus on affordability and convenience may well be at the expense of sustainability and performance. Without sound advice it will be difficult to find the right leaders for one's own branches or subsidiaries in all the countries mentioned. But a thorough leadership assessment is the key to success!
Would you like to know more? Then click here to learn more about China and the APAC region. Or please don’t hesitate to contact Julia Larsen-Disney and Ricky Foo.