Four Challenges of Human Resources Management in China

Topics: Human resource management, Human resources, Labour economics Pages: 7 (2627 words) Published: July 5, 2013
Four Challenges of Human Resources Management in China

1. Introduction
“Human resources management is defined as a strategic and coherent approach to the management of an organization’s most valued assets-the people working there who individually and collectively contribute to the achievement of its objectives.” (Armstrong, 2010) With the development of China’s economy and market, it is not surprising to find problems in its immature Human Resources Management. “The Asian giant has moved from a labour-intensive, manufacturing-driven market to a more diversified one that includes increasing numbers of high-technology jobs. Expatriates are starting to spend more time to understand the Chinese culture and adapt to the new environment.” (Shukla, 2013) This essay will illustrate four challenges in current Chinese human resources management, rising labour shortage; high staff turnover; unemployment of Chinese university graduates and rising wages. Better still, it will also provide measures to help to overcome two challenges of them, the rising labour shortage and high staff turnover. Those measures try to fit in vertical strategy and horizontal strategy. “The nature, desirability and feasibility of the link between business strategy and HR strategy is a consistent theme which runs through the strategy literature, although, as we shall discuss later, some theories suggest that implementing ‘best practice’ in HRM is even more important than this.” (Torrington et al., 2008) Also, this essay will provide good practices which have been recommended by human resources directors or experts. Human resources strategy links many aspects in business organisations and effective human resources measures can definitely promote organisational development. 2. Challenges of Human Resources in China

1. Rising labour shortage
The biggest challenge in Chinese HR management is reported so many times, which is labour shortage. Chinese labour-intensive export manufacturing has been weakened by “factory wages rise at a double-digit pace and labour shortage” (Schweder, 2013). And labour shortage in Chinese manufacturing is partly caused by “one-child family planning policy” (Schweder, 2013). It is reported that “Shanghai and Guangzhou-the economy’s twin engines, the Yangtze and Pearl river deltas, are spluttering due to a shortfall of migrant workers, especially in the service and manufacturing industries, amid soaring living costs and stagnant salaries”.(Yu and Zheng, 2010) Yu and Zheng (2010) indicate that “according to the latest statistics from the Shanghai Restaurants Association, the shortfall in waitresses currently stands at 20 percent and will double during the Spring Festival period, which falls in early February next year.” Facing soaring labour shortage, some employers point out that more and more post-80 workers are picky on salaries and working conditions. What’s more, high living costs prevent workers from metropolis. “The average monthly salary for an employee in the service sector in Shanghai is about 1300 yuan ($197), barely enough to cover food costs.”(Yu and Zheng, 2010) A senior HR consultant based in Shanghai Zhang Zhenning points out that under such circumstance, more migrant workers tend to seek job opportunities in their hometowns, “where they earn a bit lower but also spend less on living costs”. (Yu and Zheng, 2010) Consequently, many restaurants have to employ part-time university students or unpopular middle-aged rural worker in other province. Only in this way could those restaurants fill the shortage in the customer service sector. Employers are haunted by the same trouble in south China’s Pearl River Delta region. Affected by labour shortage, lots of companies have to slow down their expansion plans. “The worker shortfall has been estimated at more than 900,000, according to a recent survey by the province’s human resources department. The delta’s major cities of Guangzhou,...

References: Armstrong, M. (2010) A Handbook of Human Resources Management Practice Kogan Page
Cappelli, P (2013) Retention not Get Enough Attention in China [online] Available from [Accessed June 5th, 2013]
Hardy, S
Henkens, K., Remery, C. and Schippers, J. (2008) Shortages in an ageing labor market: an analysis of employers’ behavior. The International Journal of Human Resource Management
Lamb, K [Accessed June 5th, 2013]
Torrington, D., Hall, L
Yu R. and Zheng C. (2010) Rising Labor Shortage Hits Delta Regions [online] Available from http: //www.china 2010-11/ 29/ content _11620791.htm [Accessed June 5th, 2013]
Shukla, S (2009) Chinese University Graduates Face Difficult Job Market [online] Available from [Accessed June 5th, 2013]
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