Asia Skills Deficit May Force up Pay
Thursday, January 17, 2008 FT
Growing skills shortages in Asia mean that multinational companies operating in the region may, within five years, be forced to pay western-level wages to skilled scientists, IT specialists and engineers, according to Jeff Joerres, chief executive of Manpower, the US staffing company, one of the world's largest recruiting companies.
The shift towards higher value-added manufacturing in Asia is contributing to skills shortages, resulting in "a massive productivity hit" for many companies investing in the region.
Many western companies, he said, were "clearly underestimating" the challenge of finding adequate staff for more advanced jobs, both in China and in younger manufacturing destinations such as Vietnam and Cambodia. "Companies will shift from facing a technology deficit to a talent deficit. They are trading off one productivity loss for another," he said.
Legal changes in the Asian labour market also make attracting and retaining staff more difficult, he warned. In China, the government introduced this month a new labour contract that raises the amount of compensation that companies have to provide for laying off(dismissing) workers.