China’s digital talent shortage is worsening as demand grows amid deepening economic restructuring, two recently released studies show. Smart manufacturing sector job listings rose by about 54% in 2022 from the previous year on zhaopin.com, a leading Chinese recruitment platform. The supply shortage was worst in fields ranging from software engineering to electronics and automation, the company said in a report last week. Demand for technical talent has grown as China pushes for structural reform of its economy, seeking to transition from being the world’s factory to smarter and higher-end production. The intelligent manufacturing sector was short of 4.3 million digital workers last year, according to a joint report by Deloitte and Chinese firm Renrui Human Resources Technology. The gap will widen to 5.5 million by 2025, the report forecast.
China’s five-year plan to 2025 focuses on innovation-driven growth, aiming to build advanced manufacturing clusters and boost key industries, including integrated circuits, robotics and engineering machinery. About half of the 2,500 firms surveyed said demand for digital talent was outpacing supply. The supply-demand ratio is expected to rise from the current 1:2.2 to 1:2.6 within the next three years, which will “fail to support the digitalization needs of the industry”, the report said. The quality of existing workers in digital-related positions was also not satisfactory, it added, citing responses from nearly half the firms surveyed. The talent gap has left China facing an employment paradox. While there is mounting pressure to create jobs to tackle overall unemployment in a sluggish economy, manufacturers are struggling to recruit qualified staff as they reform and upgrade. The biggest shortages were in interdisciplinary and hi-end skills, according to Zhang Xin, Product Expert at CIIC Management Consulting, the research arm of state-owned human resource firm China International Intellectech Co. “Our latest research shows that 40% of industry players had a considerable increase in demand for technical experts in operating and repairing hi-end machines,” she said.
“Also unlike before, when a position might only involve a single skill, employers today are increasingly seeking people with extensive expertise, which is one of the most important challenges in the talent shortage so far.” “Many companies have realized this problem and partnered with colleges and vocational schools to train the specific workers they need,” Zhang added. “Schools have also realized that students face a mismatch of skills and market demand, and are therefore adjusting study courses.”
The South China Morning Post reported earlier last month that at a manufacturer in Tianjin, hoisting a piece of coated metal into a blazing-hot gas furnace must be precisely controlled. The exactness of this carburizing step is vital, as it can determine if the part – in this case, industrial gearboxes – will last for 10 years or 50 years. However, the data being relayed from inside the furnace is not handled on-site. Instead, it is transmitted all the way to Germany, where engineers monitor the highly technical process from the headquarters of the plant’s owner. Without access to core technology, which increases the added value of such products, the Chinese side is responsible for purely operating the machine.
Therein lies a critical hurdle facing China’s manufacturers – bridging technical gaps in an increasingly competitive global trade environment. “The supply of a large number of key core technologies and middleware in China’s manufacturing sector is heavily dependent on foreign countries,” a Zheshang Securities report said last March. A second major hurdle involves manpower. While China continues to offer relatively cheap labor, a comprehensive industrial and supply chain, and policy support, demographic and societal changes have created a shortage of skilled blue-collar workers. While automation is becoming more ubiquitous in manufacturing, such technical experts remain essential in operating the machines and repairing them – from digital coding to physical components. If factories are unable to find these skilled workers, the resulting labor crunch could force companies to cut orders. On a nationwide scale, this could have far-reaching ramifications as China strives to reinvigorate its economy after three difficult years under zero-Covid. This reflects a broader trend in China that has resulted in a mismatch between the jobs young people are looking for and the jobs that are in dire demand. Even as 95% of the country’s vocational graduates are able to land jobs soon after graduation, manufacturers have been reporting difficulties in hiring blue-collar workers, especially skilled ones.
A trending topic trending on Weibo – China’s Twitter-like platform – was about the cost to find such workers exceeding CNY10,000. “A lot of people are looking for a job, but at the same time, it is difficult for us to find qualified, skillful workers,” said Cindy Zheng, CFO of the Wago Electric Tianjin company, an electrical connector manufacturer that is headquartered in Germany. Young people these days like to work flexible gigs, such as delivery jobs, while 20-something young workers tend to shy away from working at a manufacturing company, she added, as reported by the South China Morning Post.
