The top 5 largest markets, measured by units sold, represent 70% of the global sales volume. They are, in this order: China, Japan, USA, Korea and Germany (data from IFR World Robotics 2015). Despite China leading the ranking, the country’s degree of automation is still at a low level (i.e. today the proportion of machine tools with numerical control there is about the same level as in Japan in the late 70’s). There’s still plenty of room for improvement, and the path that lays ahead is not free of challenges.
For this piece we interviewed with Georg Stieler, Managing Director of STM’s Shanghai office, who has gained extensive knowledge about the Chinese automation industry while working for foreign suppliers of robotics, sensors & CNC-systems in the region. He shared with us the main talent challenges the industry is facing in China.
ChinaRecruitment.com: Based on your experience, what are the main talent challenges for this particular industry in China?
Georg Stieler: Professionals with a solid interdisciplinary understanding of mechanics and electronics (mechatronics) are hard to find. This is a relatively young industry and even in more mature markets, such Germany, this qualified talent is a scarce resource too. Additionally, there’s an absence of long term career development plans for those employees showing potential. Many automation suppliers are rather small, and management lacks the long-term vision, or the resources, to build up their own talent pipelines.
CR.com: Do these challenges impact with different intensity Chinese and foreign firms?
G.S.: Foreign companies still benefit from a higher employer brand recognition. Oftentimes they are the preferred career choice, especially among young graduates given their reputations and competitiveness. The real challenge for foreign companies is high employee turnover.
High salary expectations, prompted by MNCs remuneration policies, have spread across the industry. Many SMEs have difficulty to cope with those, given the fact that they are not necessarily paired with productivity.
CR.com: What is the ideal profile of a professional working in the automation industry?
G.S.: They have an occupational background in large automation firms, with proven project experience. They understand the Chinese manufacturing facts and status well. They have solid technical skills in at least one field. For system integrators, who want to grow fast, market research and business development skills are also critical.
Sometimes they are former employees of larger companies/system integrators, who founded their own private business. Multiple system integrators firms, developing in this way, can’t find qualified staff because they are already competitors in the market. This dilemma hinders the cultivation of qualified system integrators.
“The automation industry, specially system integration, is a highly competitive marketplace where all practitioners are sought to have rich experience in related areas”
CR.com: Is there any noticeable talent development initiative in the industry you would like to share with our readers?
G.S.: Some German automation companies send their employees to Germany, sometimes for several months. This has had mixed results. In some instances it has been the right approach; in others employees fall back into old habits and behavioral patterns soon after they come back.
Local players are trying to replicate this approach. The country’s largest robot manufacturer Siasun recently took over Teutloff Vocational Training in an attempt to bring in their talent development expertise.
CR.com: Before you mentioned young graduates. With China churning out record numbers of graduates every year, isn’t that helping to diminish scarcity of staff?
G.S.: No, not really. There are no mature internship schemes allowing students to take enough training and practices during their studies. The automation industry, specially system integration, is a highly competitive marketplace where all practitioners are sought to have rich experience in related areas. Fresh graduates simply cannot fulfill the role, and there is no incentive to develop a fresh graduate from scratch because it’s too time-consuming and costly. When I was referring before to the ideal profiles these individuals are around 30 to 35 years old, not young graduates.
CR.com: Will the universities be able to tackle the lack of technical skills to match the requirements of the industry in the mid-term?
G.S.: I am not very optimistic. In the one hand the gap between top tier technical institutions such Shanghai Jiao Tong, Tsinghua or to some extent Tongji against other universities is still considerable. In the other, since this is a young industry posing a lot of technical challenges it takes problem solving skills and creativity to overcome them. Whether at the educational institutions or at a company level, you cannot instill a successful innovation culture overnight. It will take time.
CR.com: To conclude, where are the main clusters in China located?
G.S.: The focal points are Shanghai, Guangzhou and Beijing. Some companies might explore further developing in Zhejiang and Jiangsu, neighboring Shanghai but trying to get away from its higher costs.
After our interview with Mr. Stieler we have summarized the main key take-aways as follows:
This is not unique to China, and applies to mature markets as well. There is a shortage of professionals that bring a solid understanding of both electronics and mechanics.
Though foreign companies benefit from a higher employer brand recognition and be the preferred choice among young graduates, they still face high employee turnover.
With many automation suppliers being rather small, they lack the resources or the management long term-vision to build up their own talent pipelines, resulting in the absence of long term career development plans.