As demand for market research services in and about China continues to grow, attracting and retaining good quality industry professionals has become one of the most significant challenges facing agencies with operations in the Greater China region.
Despite having a population of 1.3bn, hiring and motivating Chinese research executives and managers is a significant challenge for many companies operating in the region. The country’s rapid transition from the planned economy of thirty years ago to the liberalized economic environment that exists today has meant that the labor market has struggled to keep pace with the intense pace of change. While those Chinese born prior to the economic reforms undertaken in the late 1970s/early 1980s tend to lack the education and skills necessary to work in the ‘knowledge’ industries, those born after the 1980s have grown up in a rapidly changing world of vast employment opportunities for those with a strong educational background and good interpersonal skills.
For employers in the market research industry, this effectively means that identifying and recruiting good quality, experienced employees is extremely difficult, while younger talent is easily lured away by other companies or careers in more financially rewarding industries.
Undeniably, carrying out market research remains far more cost effective than in Europe, the U.S. and Japan. Salaries for junior research executives and interviewers remain significantly lower than in many other countries (by as much as three quarters) and simple surveys and research initiatives can often be carried out with minimal operational costs. However, salaries for senior research managers and highly skilled data processing staff have been growing quickly over the last couple of years, and wage levels for senior Chinese employees are roughly comparable with their counterparts in the West. The reality is that when mandatory social insurance payments and other benefits have been taken into account, that carrying out ‘value-added’ full service projects in China can often have very similar costs to those carried out in the UK or the US.
Unfortunately, rapid inflation in China’s major cities indicates that the cost of employing researchers in China is likely to continue rising in the future, which further complicates the task of retaining good quality people. Agencies have to be prepared to offer the right packages to retain high quality researchers and managers, and equally to be prepared to pass these costs on to clients. There is also an ongoing debate as to whether employing Western expatriates in senior positions may be preferable to recruiting locally.
The market research industry in China is far less mature than in the West, which means that recruitment channels remain undeveloped and recruitment is slightly haphazard in nature. The ratio of applications that result in actual appointments is extremely low in China (typically less than 0.5%), which means that a tremendous among of energy needs to be spend identifying and screening potential candidates. Indeed, finding candidates with appropriate industry experience is much more challenging in China than the West, where there is generally a larger overall pool of research analysts in existence.
There are also challenges in terms of the performance of local Chinese staff in comparison to research analysts in Western countries. Whereas challenging established assumptions and probing for answers lies at the heart of Western education, the Chinese education system tends to encourage rote learning and uniformity of thought. Consequently, a major challenge for companies engaged in the ‘knowledge’ sector is to encourage Chinese employees to develop and apply their research, analytical and creative skills as effectively as possible. This perhaps is most evident with fresh graduates, whose levels of confidence and initiative are far below those of graduates in Western countries.
At the same time, it is important to recognize that cultural differences exist on both sides of the equation, and that expatriate managers often lack sufficient local cultural knowledge to manage and motivate Chinese research staff effectively. Managers with limited knowledge of China can find that a lack of local language skills and a failure to truly understand the motivations of employees acts as a barrier to building an effective research team.
On the plus side, the rapid growth of the market research industry is attracting increasing numbers of high quality people, while the growing number of returnee graduates from foreign universities means that the pool of talent is gradually increasing. It is also noticeable that the level of English spoken by job applicants is significantly better than 5 or 10 years ago. Equally, Chinese job applicants often have much better numerical analysis and IT skills than junior researchers in the West, and often Chinese employees often make for excellent quantitative researchers.
As demand for market research in and about China continues to boom, recruiting and retaining high quality staff will remain the number one challenge for market research agencies with operations in China. Overcoming this challenge will require a mix of better local understanding, more creative incentives to attract and retain the best people and best practice from abroad.