We've noted this trend a couple of times before (here, for example). The interesting question is how firms in Shanghai, Guangzhou and other cities close to the coasts will respond. Factories can raise their wages and improve conditions to appease picky workers. Or if workers won't come to them, they can go to the workers—moving inland or overseas, where labour is cheaper. (That amounts to paying higher logistical costs in order to escape higher wage costs.) But firms in service industries, like Sichuan restaurants, have to remain close to their customers. So South Beauty is trying a third option: migrating up the age-scale. It has removed the age-limit for applicants, and is now happy to hire older staff.
We talk about peak oil. Is there such a thing as peak talent?
Since human capital is renewable, the metaphor is strained. However, people can't move around the world like oil does. As the above passage indicates, firms are more mobile than talent. Also, necessity is the mother of invention. As the supply of cheap labor tightens, businesses get creative.
US regions could learn a lot from China's demographic challenges. They would also benefit from a better understanding of best talent management practices:
If talent is the leading indicator of whether a business is up or down, a success or a failure (and it is) . . . do you know how to accurately judge raw human talent? Understand a person's unique combination of traits? Develop that talent? Convert what supposedly are "soft" subjective judgments about people into objective criteria that are as specific, verifiable, and concrete as the contents of a financial statement?The talent masters do. They put people before numbers for the simple reason that it is talent that delivers the numbers. Success comes from those who are able to extract meaning from events and the forces affecting a business, and are able to look at the world and assess the risks to take and the risks to avoid.
What regions do wrong is put the numbers before people. Instead of developing talent, we develop places. Why else would we educate foreign born people at our finest universities and then push them back from whence they came?
Talent retention strategies are cut from the same cloth. There is no concern about developing people. The focus is on a place, such as Memphis. We should be trying to better align the interests of talent and place, not undermining growth and prosperity (which what plugging the brain drain does). The failure to acknowledge the linkage between geographic mobility and economic wellbeing is appalling.