I've described before the reasons why China Market is looking so promising to enter right now even though it is still a bit under the radar. However, in my opinion “under the radar” is one of the reasons itself.
Let's take a look at one of the most important parts of penetrating the market – talent.
Obviously, considering a new market entry one of the top questions on the table is finding talents. It includes lots of aspects in consideration like costs, time to hire, time to integrate in the processes, legislation, skillset and many more. As I've mentioned before, now is the perfect time to enter, and yes, it also means now is the perfect opportunity to hire talents.
Unemployment has been a big newsmaker recently, I bet you have heard about big tech layoffs and so on but none of that is about China, right? So what is actually going on there and why do I personally call this moment a perfect opportunity?
China faced a huge unemployment hit a bit earlier than those headlines you've seen. It all started even before COVID with the general economic slowdown. Then it got hit by COVID and even more by last summer lockdowns. The total unemployment rate right now is about 6% which is extremely high and if we look at postgraduates it‘s 17%! To put it into perspective, China is about to see a record number of 11.6 million graduates who are expected to join the labour market. You can do your math here.
You'd ask me: “And why is this good?" Well, I told you about the economic recovery earlier and here is a nice lag for you to jump in and hire great talents!
Tencent with as many as 109,000 workers last September – has cut more than 7,000 jobs in the last two quarters. Chinese giants also did their layoffs and now SMB's are in a great position to onboard the best ones. Even the Ministry of Education agrees:
"It will increase the role of small- and medium-sized enterprises in absorbing talent, while it will also offer more support for self-and flexible employment"
Another point making you more flexible is the new threshold standards of local giants. It's almost impossible to get a job without a master degree regardless your job experience. Even graduates from the top western universities now think twice before going back to China looking for a job. The competition is tough and the thresholds are extremely high. Which for a company entering the market means a vast choice of top talent ready to start ASAP.
This labour market position does influence the costs of hiring. But still, so does the inflation, right? Don't assume you would get a bargain for a top talent just because of that. However, what many might miss here is that you are not limited to big cities with massive cost of living. COVID influenced all of us in many ways and one of them is remote work and moving out of the big cities. It did so in China as well! During and after lockdowns many moved back to their home cities which also eased their expenses and salary expectations as a result.
Although, the market is not an easy one to enter by any means but if you ever considered it now is the time!