CORENET GLOBAL: CHINA FACES SHORTAGE OF TALENT
IN CORPORATE REAL ESTATE
ATLANTA, GA (FEBRUARY 21, 2014) -- While China has an abundance of workers at the low end of the labor spectrum, the country faces a lack of workers with higher-level skills, including those demanded by the corporate real estate industry, according a report from CoreNet Global, the word’s premier association for corporate real estate and workplace professionals.
China is expected to have a surplus of 23 million people on the lower end of the labor market by 2020, and an even bigger shortage of highly skilled workers of about 24 million people, according to research from McKinsey & Company. If China does not bridge this gap by 2020, it could face a negative impact on economic growth. McKinsey estimates that the opportunity cost could reach $250 billion, or about 2.3 percent of GDP.
And the labor shortage specifically affects corporate real estate (CRE).
In China, it is difficult for companies to both find workers with CRE training and skills, and to prevent that talent base from being lured away by other companies. A 2012 survey by Heidrick & Struggles, an executive recruiting firm, found that 77 percent of multi-national companies’ senior executives have difficulty attracting managers to China, while 91 percent said employee turnover is their biggest problem.
The shortage of good people is compounded by two key factors. One is that the Chinese are not as aware of CRE as a career choice compared to other industries.
“In China, corporate real estate is really not well known,” says Lawrence N. Bazrod, Chief Operating Officer at CoreNet Global Inc., in Atlanta. “What we’re finding is that there is not a lot of recognition, certainly in the large Chinese and state-owned companies, about the practice of corporate real estate.”
The second obstacle is that while Service Providers and MNCs can generally hire adequate talent for the entry-level or more junior positions, that is not the case when recruiting for a higher level of skills. Some of the skills that are cited by employers as lacking include:
Companies Finding Solutions
Multi-national companies in China are improvising solutions:
But the most important factor of success may be time. The Chinese government and multi-national companies are recognizing the need for better University programs and for promotion of corporate real estate as a profession -- one that is distinct and different from the development side of the real estate industry.
According to the report, “companies are looking for different ways to improve efficiencies to be more competitive. Multi-national companies will help to push Chinese companies to adopt more international business practices such as transparency of data, performance management metrics and better training.”
To see a copy of the full report, click here.
About CoreNet Global
CoreNet Global is the world’s leading professional association for corporate real estate (CRE) and workplace executives, service providers and economic developers. CoreNet Global’s 8,000 members, who include 70% of the top 100 U.S. companies and nearly half of the Global 2000, meet locally, globally and virtually to develop networks, share knowledge, learn and thrive professionally. For more information, please visit www.corenetglobal.org.