Chapter 1
Talent remains a pressing challenge in the GBA
Identifying the talent gap in the GBA
Talent is imperative to realizing business potential, especially for companies competing in an innovation and technology (I&T) hub such as the GBA. However, as indicated in recent studies2, many companies in the GBA are facing a shortage in critical talent for business and technology innovation. The shortage is driven by the strong growth of commitment from I&T companies and a relative lag in talent supply. In China, high-end and I&T talents are traditionally concentrated in Beijing, Shanghai and Hangzhou. While the GBA is set to lead the I&T development in China, its “soft environment” such as investment in R&D talent and enterprise innovation2 has been less attractive compared to other sophisticated economic clusters within China.
With the supply shortage in high-end talent and market transformation towards a more human-centric direction, more and more companies in the GBA have pivoted to revisit the adage “people are your most valuable asset”. Increasingly, they have recognized the significance of upskilling their employees and developing cross-disciplinary and innovative talent pipeline to close the talent gaps in the longer run.
Talent gap in the GBA
According to 2020 List of Sought-After Talent Categories in the Greater Bay Area published by Guangdong’s authorities3, there is a lack of talent across 7 strategic industries of the GBA region in Chinese mainland. The gap amounts to 331,731 vacancies consolidated from 16,959 sizable I&T companies in the GBA area.
For international companies expanding into the GBA, they face additional challenges in leveraging existing talents to spearhead their GBA strategies. Many companies need to deploy critical talents from head offices across the GBA locations for maintaining management oversight, instilling company values and transferring brand/operation know-how. However, they need to address key issues such as differences in income tax, insufficient supporting facilities (e.g., accommodation, medical and education) and uncompetitive salary packages to develop and attract the right talent to work in the GBA.
Chapter 2
Tactics for international companies: reinvent your GBA talent strategy for the future
Key talent issues and tactics
Tactics to help international companies rethink and reimagine their talent strategy in the GBA
1. Adopt a holistic approach to remuneration and customize remuneration practices to fit local needs
International companies may consider a differentiating approach to their remuneration system in which different elements are tailored for varying market needs across the GBA to attract and retain key talents, for local hires as well as talent assigned to GBA locations from head offices. For example:
- Varying pay positioning and pay mix (variable pay vs. fixed pay), taking into account the differences in pay levels, income tax levels, criticality and availability of talent in home location versus Chinese mainland.
- Use of long-term incentives (such as share-based incentives) to compete for critical talents for innovation and technology against leading tech companies.
- Different pace of promotion and salary adjustment to meet with talent expectation.
- Other differentiating elements (e.g., benefits) to reflect relative talent’s priority and work culture.
2. Grow talent from within to build a sustainable talent pipeline
International companies may adopt short-term tactics to help acquire or develop talents who can be more adept at understanding the differences in work cultures. These include hiring local talents from the Mainland with an educational background from Hong Kong or overseas, or putting in place a short-term rotation program to expose the workforce to different GBA market environment and work culture.
In the longer term, international companies need to rethink their overall employee value proposition (EVP) of the GBA to make it appealing to local talents and achieve a sustainable talent pipeline. Companies setting up operation in the GBA can consider the following when defining a strong EVP:
- What EVP elements (e.g., management style, reward strategy, work nature, company’s market position, career opportunities) are integral to who you are as an organization and, as a result, should be applied to the GBA?
- What EVP elements would set the company apart from competitors and should be emphasized externally as well as internally?
- How can EVP elements be delivered so that the external employer branding is aligned with the internal experience?
3. Enable international leaders to succeed in the GBA
In many cases it is crucial for international companies to task experienced leaders or managers to spearhead their GBA expansions. These leaders will play an integral role in ensuring the organization’s purpose, values, culture, and objectives are inherited in the new operation. However, the challenges that come from relocation/long-term assignment are often underestimated, leading to poor business performance and significant stress in the assignees.
Making use of talent assessment and talent development programs, companies can ensure candidates are:
- Aware of the potential disruptions that come with the assignment, e.g., being away from friends and family for a long time
- Prepared for the new challenges and develop a growth mindset and resilience
- Equipped with cultural sensitivity and open to experimenting with new ways of interaction and communication
- Supported with learning resources, coaching and feedback prior to and during the assignment
How EY can help
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Read moreSummary
The GBA strategy aims to stimulate technological innovation, economic prosperity, and social progress. To succeed in the GBA, talent will be a critical factor and companies need to reinvent its talent strategy to develop a sustainable and successful talent base for the GBA.
