Greed is Good - or is it?

From Management Issues

The booming Chinese economy is leading to a retention melt-down that has left companies struggling to retain their professional staff, and faced with either having to pay higher salaries or excessive recruitment costs.

A survey by Mercer Human Resource Consulting of over 100 organisations in China, many of which are multinationals, shows that more than half (54 per cent) have experienced an increase in turnover for professional staff since last year, while four out of 10 have reported higher turnover for support staff.

Meanwhile, the average tenure for 25-35 year olds - the age group targeted most by multinational companies - fell from an average of between three and five years in 2004 to just one to two years in 2005.

"The employment market in China has ignited in recent years, as more multinational organisations set up operations there and local companies expand," said Mercer's Brenda Wilson. "Individuals with transferable skills have become a valuable commodity, and companies are battling to keep hold of them."

Pete's Points
"Greed is Good" has started in the Chinese economy. Let this be a warning for all, that the Chinese products that we have taken for granted in the last few years are no longer as likely to remain as cheap as they once were.

Given that the Chinese now control most of the production of certain goods that are appearing on our shelves and given that 'entrepreneurs' in Australia have taken their production facilities or their investments in the manufacturing industry off shore to China there is likely to be some friction between those who expected to be able to make a killing investing in the human resource capital of China and those Chinese who now want their 'fair share' of the proceeds.

It would be interesting to be around in a few years time to see the impact of these rumblings in the Chinese economy and the reaction of the rest of the world to it.

Meanwhile for those of us who remain cynical about world events I suspect that the truculence of Iran about its nuclear industry is more likely to lead to events that will shake the world in the short term. World stability is not helped by the news recently that Chad is seeking to take control of its oil production. It once again reinforces the feeling by western investors that investing in tin pot regimes is likely to lead to a loss of their investment.

Do not be surprised to hear of civil war or something similar in Chad soon. The oil companies and their investors are not going to give up their incomes as easily as that!