The following report provides an update on the key trends that we have observed within the Supply Chain & Operations job market in China. It identifies emerging themes across various industries and details the major factors impacting hiring and talent movement.

ECONOMIC LANDSCAPE

China's economy advanced 6.7% on a year-on-year basis in the second quarter of 2018, matching market consensus but slightly lower than the 6.8% expansion seen in the first quarter of 2018. It was the weakest pace of growth since the third quarter of 2016 amid intensifying tariff battles with the US and efforts to deleverage debt and financial risks.
On a quarterly basis, the economy grew by 1.8% in the second quarter of 2018, an uplift from the 1.4% expansion seen in the previous quarter and beating market expectations of 1.6%.
The unemployment rate declined to 3.83% in the second quarter of 2018, its lowest rate since 2002, and down from 3.89% in the preceding quarter.

MARKET TRENDS

There is a skills shortage for R&D talent in China, with some pharmaceutical companies going as far as hiring talent from Japan. An increasing number of pharmaceutical companies, both local and multinationals, are placing greater emphasis on the R&D function and investing in resources.
Professionals with backgrounds in procurement and supply chain are in demand by private hospitals - where there has been a talent shortage since 2012 - especially those from a similar industry with experience in R&D.
There is growing demand for supply chain professionals with APO (EPR system) or e-commerce project experience in China, with cross-functional knowledge being an added advantage. It has been easier to find APO talent in Singapore than in China, while hiring e-commerce talent has been active in China across the food & beverage, retail and healthcare OTC industries.
Indirect sourcing professionals have been sought after in China, particularly those with rich experience in marketing-related categories such as digital, e-commerce, creative, events, and PR. The healthcare, consumer and retail sectors have been active in sourcing candidates who match this profile.
An increasing number of companies in the consumer and retail industries have been centralising their IT and logistics spends into their corporate indirect sourcing function. As such, there has been a tendency for companies to hire IT and logistics professionals with no experience in sourcing, creating a good opportunity for those considering a career transition.
Candidates with demonstrated business partnering skills have been increasingly in demand, especially within the sourcing and procurement sector. Companies in this space have been actively seeking talent with strong business acumen and extensive experience in managing and engaging users from commercial functions.
Growth in the food & beverage and OTC industries is being driven primarily by the explosive rise of e-commerce. Consumers have come to expect a modern day retail experience associated with affordability, convenience, flexibility and speed. This has created a growing need for logistics professionals with expertise in last-mile delivery solutions. A similar trend is being seen in the apparel industry.
Professionals with solid experience in demand and supply planning have been in demand by companies within the FMCG and chemical industries, as many seek to improve their supply chain and operations processes.
As organisations continue their efforts to drive process improvements and cost savings in the supply chain and operations function, process improvement professionals with a proven track record in reducing costs for organisations will increase. Project Managers along with Continuous Improvement and Solution Implementation professionals with relevant certifications (PMP, LEAN/Six Sigma) continue to remain in demand.

SALARIES AND BONUSES

On average salary increases of around 6 to 8% have been the norm for supply chain and operations professionals this year. For ATL procurement, 15% has been seen for top performers in the retail, consumer, food & beverage and healthcare industries.
In relation to bonuses, the sectors that performed better, such as healthcare, chemical, high-tech and e-commerce along with local biopharmaceutical companies, saw higher uplifts than other industries.
As for job movers, salary increments varied depending on the qualifications of the individual and industry in 2017, with a 15 to 25% base increase common when moving companies in China. This is also in line with the figures seen so far this year in China.

THE FUTURE

Given the solid economic landscape in China, demand for supply chain & operations and procurement professionals is expected to remain relatively robust for the remainder of the year.
According to the Institute of International Finance, Bank of China, there have already been 5,179 newly established foreign-invested enterprises so far this year, and foreign direct investment is expected to increase by 3% in 2018. The encouraging outlook means that the China job market will remain active this year.
The ongoing trade tensions between the United States and China could have significant implications for heavily integrated and globalised supply chains.
In order to move with the times, supply chain & operations professionals must embrace technological advancements such as AI, blockchain, cloud and IoT, and be prepared for the changing retail environment, smarter logistics as well as Industry 4.0.