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Talent and Entrepreneur Connect: Talent steers your journey in the future international innovation and technology hub

Photographic portrait of EY Greater China
EY Greater China

Multidisciplinary professional services organization

8 minute read 31 Mar 2022

The Outline Development Plan (“the Outline”) for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) delineates the blueprint for the GBA’s future development and fosters close partnerships among the nine cities and two special administrative regions within the GBA. The associated policy supports provide new propulsion for further expansion into this vast market and enablement to leverage the GBA as a world-class innovation and technology hub.

In brief:

  • Many companies in the GBA are facing a shortage in critical talent for business and technology innovation.
  • Unique angle for employers to reflect on their talent strategy in the GBA.

The GBA initiative is transforming the nine Pearl River Delta cities and the two Special Administrative Regions (SARs) into a globally influential hub of technology, innovation and economic vibrancy, which enjoys a comparable status with other world-class bay areas. According to Global Innovation Index 20201, Guangzhou-Shenzhen-Hong Kong is ranked second among the world’s top 100 science and technology clusters, trailing only Tokyo-Yokohama.

It offers exciting synergies by integrating the competitive advantages of the 11 locations into a globally leading business hub. However, these businesses also need to acknowledge the accompanying uncertainties in regulations, market conditions and talent landscape. Having the ambition to embark on a GBA journey is necessary, but surely not sufficient.

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1

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.

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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.

How EY can Help

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

Summary

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.

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    Photographic portrait of EY Greater China
    EY Greater China
    Multidisciplinary professional services organization
    Related topics
    Greater Bay Area
    Workforce

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