Focus on Electrical and Software Control is Changing the Face of Mainland China’s M&O Sector

Published on 2018-12-04

Since 2015, a key priority of Mainland China’s manufacturing and operations (M&O) sector has been the realisation of the Made in China 2025 initiative.

This ambitious, government-led scheme to transpose the nation’s manufacturing focus from the production of low-cost consumer goods to the development of high-technology products, has seen a major shift in how the M&O industry operates.

M&O is a core business for Chinese companies, so finding the right people to fill positions is absolutely critical,” explains Simon Lance, Managing Director at Hays Greater China. “Due to the importance of the sector, and with Made in China 2025 bringing new demands, the sector is extremely active."

Companies are looking to upgrade their products and investing in product development. In manufacturing there is a lot of talk around process improvement, automation, and cost saving. In change management a localisation drive is seeing companies place more emphasis on the utilisation of local staff, returning foreign M&O experts to their home countries." 

The domestic market is changing, and though labour costs are growing, the Chinese populace is getting richer leading companies to concentrate on affluent local consumers, developing third or fourth generation products. There are many changes occurring, and it’s very exciting.” 

As the focus of Mainland China’s M&O sector changes, foreign companies are altering their perception of Chinese manufacturing. Gone is the opinion of Mainland China as a location for cheap labour and outsourcing; multinational companies are coming to understand the possibilities that Made in China 2025 represents.

The nature of Chinese industrial business is different from ten years ago when foreign companies came for low labour, operational and supply chain costs. Now they are investing in engineering or R&D centres because Mainland China is rapidly advancing in these areas,” Simon says. 

This means that R&D managers with electrical engineering or software engineering backgrounds are key positions that companies wish to fill, as the move from mechanical control shifts to electrical, and then eventually software control.

While the Made in China 2025 initiative is enabling companies to move into more high-tech spaces, the rising price of labour means that companies must turn to cost saving tactics in order to maximise profits.

Companies are aware that you cannot expect sales teams to always generate greater profits, and with escalating wages an increasing concern, they are looking to the operations side of the business to make savings.” Simon notes. 

For this reason, there is a necessity for lean, value chain and Six Sigma specialists who can overhaul procedures and processes to maximise efficiency. As this is a candidate short area some companies are looking to promote internally from engineering or process engineering departments and upskill those who are deemed to possess the skills and talent to make the transition."

However, with many companies impatient to cut costs, they are more likely to turn to recruitment companies such as Hays to make critical hires, with candidates who have experience with the Toyota Production System top choices for both automotive manufacturers and first tier suppliers.

As Made in China 2025 continues to drive the concept behind the new wave of Mainland China’s manufacturing industry, it is unlikely that this desire to locate highly skilled candidates with experience in automation, lean processes and software control will contract in the coming 12 months, and candidates should be aware of the advantages that this entails.

Generally speaking the market is growing stably, and it is a good time to seek out a new opportunity. Even if you are content in your position now, it pays to consider your options with an eye to the future.” Simon suggests.

Job seekers can expect to receive packages that will raise their salaries by 10 to 20 per cent, and an improved job scope, the opportunity to manage larger teams and enhanced career progression are also available to those with the right attributes.

An overview of what other trends have been observed in Mainland China’s manufacturing and operations sector can be viewed below.

An increasing number of engineering and supply chain professionals are undertaking additional training to ensure that they keep up to date with the newest practices.

Similarly, more and more R&D experts are attending networking and conferences, particularly on the subject of automotive aiders.

This year has seen a trend for companies with manufacturing operations in eastern China moving to the centre or west of the country, opening up opportunities in these areas.

Both multinational and domestic companies are turning to overseas candidates with technical backgrounds in order to upgrade product development.

As Chinese manufacturing companies increase their international market share, the M&A activity of last year has continued into 2018, with organisations acquiring large multinationals and setting up overseas offices as they invest in product development. 

To read the full Inside Story of Manufacturing & Operations in Mainland China, please click here. 

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For further information please contact Lily Zhuang, Senior Marketing Executive, North & East China, on +86 (0) 21 2322 9683 or Lily.Zhuang@hays.cn.

 About Hays

Hays plc (the "Group") is a leading global professional recruiting group and is celebrating its 50th anniversary this year. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2018 the Group employed 10,978 staff operating from 257 offices in 33 markets across 20 specialisms. For the year ended 30 June 2018:

– the Group reported net fees of £1.072 billion and operating profit (pre-exceptional items) of £243.4 million;

– the Group placed around 77,000 candidates into permanent jobs and around 244,000 people into temporary assignments;

– 19% of Group net fees were generated in Australia & New Zealand, 26% in Germany, 24% in United Kingdom & Ireland and 31% in Rest of World (RoW);

– the temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;

– Hays operates in the following markets: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Mainland China, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA.