Luxury Retailers Scramble for Managers in China

on August 19 2011 | in Retail Trends | by | with 3 Comments

Luxury shopping in Hong Kong, Chanel, Hong Kong

With a population of 1.3 billion, you wouldn’t expect it to be difficult to find people in China. But for luxury retailers, people are the one thing that simply can’t be found.

Finding qualified managers in China, already difficult for companies making the Eastward move, is becoming even more difficult as companies move into second-, third-, and fourth-tier cities. And as more companies vie for a place in the People’s Republic, demand is only increasing.

“It is not easy in China,” said Helen Willerton, managing director of Chloe’s Asia Pacific sector. “There are so many positions to fill and not enough people to fill them. Finding staff in China is on everyone’s agenda at the moment.”

A big part of the problem is the Chinese education system versus Western business needs. While Chinese systems focus on rote memorization, Western businesses are looking for creative free thinkers. And Chinese higher education is little better.

“Chinese students are very accustomed to having a professor stand in front of them and then take notes on very detailed minutia. It is not really a great approach for teaching sales skills,” said Rick Phillips, chief technology officer at employment training company Castle Worldwide, Inc.

Chinese are working to remedy the education gap, however. U.S.-based Castle is working with China’s ministry of education to develop new education programs specifically for the fashion industry. Fudan University in Shanghai and Tsinghua University in Beijing offer luxury training programs, and Skema, a French business school, plans to open a master’s program on luxury and fashion management on a campus near Shanghai in September.

But for now, the manager shortage is keenly felt. Chinese students who have studied overseas are in high demand, as are international candidates with experience in China.

“Western brands often think that they can’t be successful in China if their CEO is not Chinese or at least doesn’t speak Chinese,” said headhunter Floriane de Saint Pierre, who runs a talent consultancy in Paris. But, according to Saint Pierre, most Western luxury brands in China do not have Chinese presidents. “Some of them are headed by Western managers, who have developed their career in Asia,” she said. “They know how to surround themselves with Chinese high potential managers, who will be ready very soon for succession plans.”

For creative positions, however, many companies are still staying in the West. Roula Rozakeas, senior client partner in Hong Kong offices of the Korn/Ferry International executive recruiting firm, has observed an increase in these creative positions.

“We are seeing requests for more functional positions that we have not seen in the past,” said Rozakeas. She attributes this to a shift in the retail model: where before companies would have mainland offices report to Hong Kong offices and then to headquarters, Chinese mainland offices report directly to headquarters. “We need people who can run China at a more senior level,” Rozakeas said.

And although Chinese candidates are preferred, Chinese market experience is equally important in the hiring process.

“It is not about definitely finding Asian candidates,” Rozeakeas said. “It is about finding China market experience or Greater China experience. There are candidates in Australia who have that kind of exposure.”

Regardless of nationality, the intense demand is commensurately driving up compensation.

“You are hearing stories of people jumping for double the salary. It is a very volatile market at the moment,” said Chloe’s Willerton. “I think everyone is very, very aware of that.”

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image credit: ming-yen hsu

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3 Responses to Luxury Retailers Scramble for Managers in China

  1. Ping says:

    When my friend Jim from Miami forwarded this article to me today, I read through the article with joy. It is so well-written and very informative.

    I was designing and working on my own collection in the Netherlands for the past 5 years. Your article really gives me the courage to think out of the box and try something different.

    I don’t hesitated to make the decision now.

  2. ken grant says:

    I certainly agree that education has something to do with the problem in finding good quality staff capable of thinking for themselves and responding to unpredictable situations.

    However, there is also an enormous commercial challenge when the mentality of staff across all industries is one of following the money and only the money. They change jobs for very little increase in benefit, and show little loyalty to their employers.

    This is why luxury brands in China don’t invest much in staff training, the ROI isn’t there. Why train anyone if they leave you a few months later to go to a competitor? The down side is that service quality doesn’t really improve much, which is OK while the customers have low expectations of service, but is beginning to become a problem as more HNW Chinese see service as a key ingredient in ‘luxury’

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