"May we help you?" How China's workforce is at the ready

A number of reports cite China as one of the shared services/sourcing locations in Asia offering the most potential; this is particularly significant as much of the rest of the world is looking to China to drive growth for global organizations.

However, China has not managed to dodge the malaise of the global markets. Its growth rate is down from the double-digits enjoyed only a few years ago; in some areas salaries are rising with inflationary pressure; and regulations are increasing.

KPMG, in a report issued at the end of last year, is bullish on China, however, saying that it expects the number of captives to double in size in the coming years, but warning that multi-national providers will need to develop localized solutions to compete with Chinese domestic service providers. As in India, the growth of China-to-China models is significant, and again, multi-national providers are already developing their services in this area.

From SSONâs own discussions with shared services leaders whose companies are pushing into China, the outsourcing model is frequently cited for the flexibility and scale it provides within a relatively short time. This is particularly important for companies who see China as a big opportunity.

A factor in Chinaâs favor is the quality of staff: the country boasts the largest number of captive R&D centers in the world, and knowledge processing is developing into a competitive edge. Professor Ilan Oshri, who writes a column for SSON, has commented on the tremendous potential of the Chinese labor market in his column: " Could This Work Anywhere Else ?" where he was left dumbfounded by a work revolution quietly brewing.

KPMG cites different drivers for different types of organizations: multi-nationals are focusing on consistency, economies of scale, standardization, control and transparency. State-owned providers are looking for access to best practices and people management; and privately owned organizations are looking for consolidation, process improvement, and a focus on core competencies. As a result, shared services is seen for many as a means of transformation â not necessarily cost-cutting.

The American Chamber of Commerce in Shanghai also cites shared services as a significant growth industry for China, highlighting the opportunity to train employees in shared services-related skills, which can be deployed to service centers or offices outside China to improve business operations globally. This transfer of skills to a domestic workforce, and the transfer of this workforce to other countries, could have a significant, positive impact on global operations.

Certain cities in China are repeatedly chosen for the advantages they provide, according to the American Chamber of Commerce in Shanghai: Dalian for technical skills-base and multilingual capabilities; Wuhan for its lower cost base compared to bigger centers nearby, as well as languages, and the second largest concentration of universities; Tianjin, for the local government support provided, and strong manufacturing base; and Suzhou for its proximity to Shanghai, available space, and resources.