Corporate

The Inside Story of Digital Technology in Mainland China

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Of the many fronts in which the US and Mainland China are competing for global supremacy, perhaps the newest is digital technology, with artificial intelligence (AI) its primary battleground. It is a campaign in which Mainland China is determined to be victorious in.

Technology has been pinpointed by the Chinese government as an area in which the modus operandi must be changed. For so long, Mainland China has been the chief provider of ‘cheap and cheerful’, but recently there has been a determined drive to become the creators of market-leading value-added technology, with an eye on world domination. 

Much like the Made in China 2025 initiative to drive forward Chinese industry, the government is making a concerted push into technology, with a stated aim to become the world leader in AI by 2030. 

“Artificial intelligence has become the new focus of international competition,” said a State Council policy statement.  “We must take the initiative to firmly grasp the next stage of AI development to create a new competitive advantage, open the development of new industries and improve the protection of national security.”

To this end, Mainland China intends to build a domestic industry worth almost US$150 billion and as a PwC report predicts, AI could add US$15.7 trillion to the global economy by 2030 – more than the output of India and Mainland China combined – so there is no surprise that private companies such as Baidu, Alibaba Group Holding and Tencent Holdings are making concerted moves into the industry

All this movement is driving mass requirements for candidates in various areas of the AI industry.

While this global war for AI dominance rumbles on, there is another battle taking shape closer to home. With one of the world’s largest consumer pools, online retailers are fighting for customer share and interaction. For now, the stand out player is Alibaba, with its e-commerce presence pushing it to become the world’s sixth largest retailer, its revenues in 2017 had been outstripping predictions even before November’s Singles Day event in November saw it hit an astronomic US$25.4 billion in sales.

Though it accounts for about 80 per cent of online sales in Mainland China, it’s not just Jack Ma’s conglomerate that is reaping the rewards of the online shopping market. Multiple outlets in the e-commerce sector are taking gradual steps towards challenging the dominance of bricks and mortar retailers, and companies are exploring ways of reaching out to customers. As Chinese spend 95 per cent of their online time on their mobile devices, it is here, with internet commerce and mobile downloadable apps that the battle for consumer capture and sales is likely to be fought and won.

As a result of this, there are an abundance of vacancies in the sector and it is an extremely candidate short market, particularly in the areas of Ecommerce Operation Managers, Internet Operators, Big Data Analysts and Product Managers who can install and operate online strategies.

Due to this shortage, there has been competition for candidates over the last 18 months. This has led to local companies accelerating their recruitment processes to ensure that they are able to secure available candidates, meaning that roles do not remain vacant for long. MNCs, who tend to have more structured interview processes, are unable to move so quickly leading them to miss out. These talent wars are likely to continue into the next year as the continuous creation of different products and different applications will require a steady stream of those who can develop, maintain and implement strategies.

Despite this shortage, digital technology is not an unattractive career path. Quite to the contrary, it is one of the most popular industries at the moment as career progressions are fast and candidates are keen on operating with the latest technology in the most current trend areas. However, demand is so strong that candidates can receive four or five offers at a time, a trend that is expected to continue for the coming year.

All this means that it is a good time for candidates to consider finding new positions as companies work hard to entice them, with bigger organisations unleashing considerable budgets on employer branding, online marketing, offline event strategies and seminars.

The shortage is so pronounced, particularly in niche tech areas, that candidates are fully aware of their power and are holding out for increasingly substantial packages, with some local companies offering increases of between 30 and 50 per cent for junior and mid-level candidates. However, as salaries continue to rise, candidates may persuaded to move after less than two years in a position, with some not even seeing out probation periods before absconding to the next wage increase.

MNCs, conversely, seem less prepared to engage in salary skirmishes, preferring candidates who are looking for more than just the highest bidder. As they seek out creative, proactive candidates with leadership potential and an ability to drive innovation, they offer status and global exposure rather than fiscal reward. Due to the international nature of these roles, English speaking is a must, particularly in the mid to senior-level vacancies. 

To fill these positions, companies are looking increasingly overseas, with the USA proving to be a fertile hunting ground. With a large and longstanding internet practice, companies are extremely interested in attracting candidates from the States, especially those who have operated in Silicon Valley and have worked with big data or on large Internet platforms. The key challenge here is of course that the local internet giants require Mandarin-speaking candidates at all costs. Due to this necessity, a returning Chinese national is preferred, however the only barrier to Mandarin-fluent foreigners would be recently tightened visa restrictions, something unlikely to pose serious impediments for any large Internet conglomerate. 

And so, as China’s digital technology companies look to bring high level talent from the U.S., as they set up R&D centres in Silicon Valley, and as the government continues to pour vast investment into AI, it feels like there could be two clear winners in the digital tech war: Mainland China and the candidates who work within its industry.

Originally produced for Hays Recruitment

The Inside Story of Marketing & Digital in Hong Kong

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Hong Kong’s marketing industry, at times, feels like it is trapped in the recent past, focused almost entirely on the traditional areas of TV and print media. Despite the global recognition of the rapid – and perhaps terminal – decline of these outlets, there is still a distinct feeling that digital marketing in Hong Kong remains a ‘poor cousin’ to the establishment.

This feeling is backed up by an admanGo report which showed that, although digital marketing made year on year growth, it was the six per cent third quarter advertising spend shift into television that took the headlines and drew an impassioned Facebook rebuttal from Pixels CEO Kevin Huang.

However, due to the relative youth of the digital industry, it is perhaps understandable that businesses show it little reverence. Hong Kong’s companies are very much married to traditional mind sets, with a WL Media HK studyshowing that Hong Kong’s businesses are three times less likely to have adopted internet marketing than their rivals in Singapore.

On the face of it, Hong Kong’s digital marketing industry could be facing a dilemma, and yet there are distinct signs of positivity.

As a region, Hong Kong is growing and changing. There is a generation discovering new art forms and indulging in alternative, diverse life styles. If advertisers want to engage with this new Hong Kong and its consumer needs, then they will need to adapt to more innovative forms of marketing approaches.

In fact, there is evidence that they may already have.

As pointed out by campaignasia, the admanGo report did not paint a full picture as it “fails to monitor the majority of digital ad spend, especially in paid search, paid social and programmatic advertising.” This year has seen unprecedented confidence from advertisers, as well as a PwC report predicting digital to reach US$6.6 billion in revenue in 2021.

Some of this improvement may have been affected by a new direction taken by the Hong Kong government. While in the past it had been slow to encourage the digital marketing industry, this year’s change in leadership has led to a change of direction, bringing promises to invest more in FinTech and technology through its Innovation and Technology Venture Fund of HK$2 billion(US$ 256 million), a portion of which is set aside for marketing.

This investment boom is leading to various industries developing greater interest in digital marketing strategies, whether they be innovative creative startups, FSCG (fast selling consumer goods) companies or traditional financial institutions. This means that there is an increase in opportunities for candidates wanting to break into the digital marketing sector.

The areas of social media and content are particularly important in the coming months as companies increase investment in their own branding. Part of this, where there is a candidate shortage, is in customer experience. Previously this specialty may have been listed under the operations sector, but as it increasingly involves looking into customer behaviour, marketing departments are on the lookout for data analysts who are able to tailor social media content and strategies to reflect what their consumers are doing online.

As an extension of this, some companies are recognising content marketing as an important function in driving incremental sales through thought leadership. It is currently proving difficult to source talent in these areas and in the past, companies may have recruited freelance copywriters to provide content. However, a recognition that freelancers often struggle to understand corporate ideologies has seen this moving in-house in the last 12 months. This is particularly prevalent in the growing travel and hospitality sectors.

Being such a new industry, and one that is growing at speed, there are obviously difficulties in sourcing ideal candidates. Taking a positive stance, companies are more and more open to candidates from a variety of industry backgrounds, understanding that they may not necessarily tick all boxes required. This means that companies are developing workforces with a diversity in outlooks and thinking that encourages innovation and creativity. However, this does mean that there has to be some level of expectation management as candidates from differing backgrounds with varying working practices may need to alter their professional practices in the way they work.

Another way of tackling this shallow talent pool is by looking outside of Hong Kong. As local language skills are not a primary concern in Hong Kong, looking abroad poses few problems, however Asian countries with close cultural ties – Singapore, Korea and Mainland China in particular – are preferred as marketing strategies will need to be culturally relevant.

For candidates looking towards a move, now is a good time for considering options and beginning proactive steps into the job market. Due to shortages, some companies are open to approach, and it may be enough for candidates to meet with hiring managers, demonstrate their thought processes, experiences and impart their ideas of how they are able to impact the company’s future direction.

Yet some companies continue to be selective. While candidate requirements may have broadened in the last 12 months, there is an increasing importancebeing placed on an ability to fit a company’s culture and its vision for the future.

Because companies know that it is imperative that, as Hong Kong’s marketing industry shifts away from dying media towards digital and reflects the transforming needs of a diversifying region, it is time to make an impact.

There is a growing feeling that if businesses do not change now, then they never will, leaving them unable to catch up. There may be nothing worse than having eschewed the ‘poor cousin’ to find him become the market leader after all.

Originally produced for Hays Recruitment Asia

The Inside Story of Banking & Financial Services in Japan

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Following the 2008 global financial crisis, a state of affairs blamed by some on the freewheeling deregulation of the banking sector, regulatory compliance has been the overriding theme of an industry looking to insulate itself against a catastrophic repeat.

Since then risk compliance has been an integral part of banking concern, with global banks seeing regulatory fees dramatically increasing relative to earnings and credit losses. However, banks in Japan have been slow to follow suit. While some of the more prominent firms may have large compliance units others, particularly smaller organisations, may be restricted to just two or three professionals in their entire compliance unit.

Financial Services Agency (FSA) survey from October of this year, sparked by concern regarding patchy measures for fighting criminal abuse of the financial system, uncovered deficiencies amongst Japan's regional banks and credit associations. The report also found that many of Japan's smaller lenders have inadequate risk management and little buy-in from senior management.

Despite appearances to the contrary, this does not necessarily mean that Japanese banks are entirely negligent in this area. The last 24 months has seen rising concern over compliance practices, and firms have been adding to their compliance departments in order to ensure the robustness of their infrastructure, while others have been outsourcing some of their compliance practices.

One problem that the banks are facing is that some of the old regulations were out-dated and more applicable to the post-bubble era of the 1990s. The FSA has been making moves to change these regulations.

As this happens, in order to adapt to newer controls the banks will require additional staff to implement any new governance that comes out. Regulators are currently in the process of advising banks on the levels of compliance professionals required, applying pressure to ensure that these recommendations are carried out.

Compliance issues also bleed into the other hot topic in the Japanese banking industry, that of crypto currency adoption. By the start of October, worldwide Initial Coin Offerings (ICOs) coin sales worth $2.3 billion had been conducted during 2017 almost 25 times that of the entire previous year, and this exponential growth is making it very much a global talking point.

While Japan was the first nation to popularise the e-wallet, the Japanese public are famously techno-adverse when it comes to payment, with 2014 statistics showing more than 80 per cent of transactions by value were made in cash, and it would not have been beyond the realms of impossibility for Japan to go the ways of China and Korea in banning crypto currency.

However, in September Japan’s financial regulator approved the registrationof 11 crypto currency exchanges. Following this approval there is some debate as to whether these currencies will act as replacements for, or concurrently with the yen. In the meantime, perhaps the biggest question is as to how, and by whom, these currencies will be regulated.

So, with banks already in poor shape with risk compliance, new regulations being adopted, and the possibility of a new currency system, the Japanese banking industry is crying out for experienced compliance professionals. The problem here is that these professionals are made very much conspicuous by their absence.

While Japan’s employment market as a whole is in short supply, with job availability in July reaching a 43 year high of 1.52 positions for every job seeker, this is particularly prevalent in the banking compliance sector where it is estimated that there are three to four positions for every candidate, and companies are struggling to find adequate hires. 

Historically compliance has not been considered an attractive area for candidates in Japan as it has long been deemed a low-impact, poorly remunerated, perhaps uninteresting sector. However, this perception is starting to change as compliance becomes a number one priority in the banking industry, and companies recognise the need to encourage staff into this sector.

To this end, companies are seeing to it that successful candidates can now expect highly competitive salaries, with the additional attractiveness of working an area that offers visibility in an integral piece of the firm.

This is leading not only junior level candidates to become increasingly responsive to the enticement of compliance and securities firms, but also those from other sectors of the industry such as trading or, most prevalently, operations, who see the potential of applying their skills and knowledge to an area with perhaps a better work life balance and an improved salary.

One adverse affect of this skills shift is the rise in candidates required for the operations sector as replacements for those who have moved into compliance. This revolving door situation means that banking operations is another area of firm growth.

When companies do find a suitable candidate, particularly in the hyper-competitive compliance market, they are likely to move quickly and aggressively, driving through the recruitment process with haste. However, this is not necessarily always the case throughout the whole of the banking industry, and quite often the process can be painfully slow, as the candidate short market can lead companies to act with extreme caution as the fear of hiring the wrong candidate, and thus being lumbered with them on a long term contract, prohibits speed of action. This situation is something of a double-edged sword, as companies understand that they must move with urgency, but are apprehensive of doing so.

Despite this recruitment hesitancy, now is a good time for candidates to be in the market, particularly for those in compliance and operations areas, yet candidates must be aware that, although their skills are highly sought after, they can not expect to command astronomical salaries. Each position has a market value spectrum, with some negotiating power depending on the depth of the candidate pool. But if candidates hold out for over and above this valuation, they are likely to be overlooked.

Aside from salary, thanks to the recent societal shift towards shorter office hours following the much publicised working-to-death culture and a realisation by organisations that overworked staff leads to high turnover, candidates can expect to be offered more flexible working options. This may include shorter hours, limited overtime and in some cases, particularly for working mothers, working from home.

Partly thanks to regulatory bodies clamping down on previously lax practices, and partly in reaction to new technological advances, while it may have taken the banking industry in Japan some time, it seems that companies are finally realising the necessity of regulatory compliance. As a result it is a particularly good time for candidates with knowledge of this area. Candidates with a combination of extensive experience working with a regulatory body as well as in a securities firm will be pursued above all others.

Originally produced for Hays Recruitment Asia

The Inside Story of Manufacturing & Operations in Mainland China

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For almost thirty years the phrase ‘Made in China’ has been analogous with the low-cost manufacture of consumer goods. From shoes to cell phones, from refrigerators to air conditioners, thanks to its inexpensive labour and vast governmental assistance, Mainland China has been very much considered the world’s factory. Times, however, are changing, and for this new age the phrase has received an upgrade: ‘Made in China 2025.’

Taking inspiration from Germany’s ‘Industry 4.0’ strategy, Made in China 2025 (MIC 2025) is an initiative to comprehensively upgrade Chinese manufacturing, shifting the focus from consumer goods towards high-tech areas of industrial robots, aerospace and automation by way of heavy investments in research innovation and government subsidies.

This transformation is having a profound effect on how Chinese manufacturing is perceived overseas. Whereas previously foreign organisations looked to invest in Mainland China’s manufacturing and operations (M&O) sector due to low labour and operational costs, companies now recognise the possibilities inherent in the new Chinese model. Understanding that the nation is on the cusp of actualising its desire to move from mechanical drive to electrical and software control, foreign companies are as a result investing in engineering and research and development (R&D) centres. The foreign powers who have traditionally operated in this high-tech space are taking notice.

“[Made in China 2025 is] a very, very serious challenge, not just to us, but to Europe, Japan and the global trading system,” said U.S. Trade Representative Robert Lighthizer. “They want to be on top of all the high-tech, all the cutting-edge economic areas. And it’s smart for them to do it.”

While the advantages of MIC 2025 are obvious in advancing Mainland China’s desire to become a high-income economy, it also provides opportunities for companies to reduce costs, as manufacturing moves away from a labour-heavy space towards a higher reliance on automation and IoT, an increasing concern as salaries rise.

In 2017 many Chinese provinces raised their wage minimums, something that, according to Zhao Yang, chief Mainland China economist at Nomura International in Hong Kong, is “guided by the top leadership’s emphasis on poverty alleviation and sharing more of the fruit of growth with the disadvantaged.” However, the costs of these rising wages, in some instances equalling or bettering some areas of Europe, are being passed on to manufacturing companies, and to alleviate this they are turning to operations departments to cut costs, with the use of Six Sigma and lean practices especially prevalent.

However, this does not mean that Trade Representative Lighthizer has overstated concerns of Mainland China’s ability to compete with American high-tech industry. Mainland China’s manufacturing market share is growing in anumber of areas as companies invest heavily in product development and domestic and international M&A activity. These ventures were prominent through 2017, and have continued to be so this year, though recent months have seen a slight slowdown in M&A following the heightening of the recent trade war with the U.S.

This robust activity is having a dramatic effect in how Mainland China’s M&O sector is being implemented and is driving a desire to locate candidates for a number of areas. From R&D managers with electrical or software engineering backgrounds, to automation engineers, to lean and Six Sigma engineers, there is a battle to acquire the top talent that will enable organisations to improve in the MIC 2025 era.

Unfortunately, companies are finding these areas candidate short, forcing them to adopt a number of tactics to fill talent gaps. One strategy is to look internally to existing employees who may have abilities that can be adapted through upskilling, and in the areas of automation and Six Sigma, these positions are regularly filled by employees from engineering or process engineering departments.

While this may be an initially cost-efficient way to locate talent, many companies are proving impatient. As sales teams cannot always be relied upon to increase profits, companies are pressing operational areas to make savings by placing lean engineers as quickly as possible, meaning that they are more likely to hire directly than take the time required to train existing staff.

In these instances, companies regularly turn to recruitment companies such as Hays to source highly skilled candidates, and those experienced in the famed Toyota Production System are top of manufacturing companies’ wish lists, whether they are automotive manufacturing firms or first tier suppliers. If these optimal candidates are not available, companies desperate to fill roles are showing flexibility to those who may not quite meet requirements but have similar skills or experience in comparable roles.

In R&D and engineering sectors companies are looking further afield, with even domestic organisations interested in candidates from overseas should they have the skillsets required to assist in product development. Elsewhere, however, localisation is very much the key, as there is an understanding that, with 20 years of repeatedly upgraded experience to mine within the Chinese manufacturing industry, the talent in the area is sufficient to not require costly overseas hires, and there is a trend for foreign employees already at companies being returned and replaced with local candidates.

With a strong and stable market, there are plenty of opportunities to exploit. Even if candidates are not considering new opportunities in the immediacy, it is a good time to appraise options, with salary increases of between 10 and 20 per cent available. When this is combined with the chance to progress careers and manage larger teams, candidates are in positions of strength in these exciting and fast-changing times.

Original for Hays Recruitment Asia