China faces acute shortages in luxury executive talent, yet it is soon to become the largest global market in luxury products. How is it addressing these challenges?

Source

Heidrick & Struggles

China is the third largest luxury market in the world and will soon be the biggest, and will overtake the United States and Japan. This is a dramatic change from 15 years ago when luxury was vritually non-existent in China. Now, there has been an explosion of luxury in all areas, from houses to art, car, beauty, private jets, fashion, culture and hospitality. Mercedes-Benz, the almost universal mark of luxury sold 150,000 cars in 2010 in China and expects China to become is number one market by 2015.

Chinese Luxury talent in short supply 

Given the exponential growth of the luxury consumer market over the last 15 years in China, the supply of luxury talent excutives to manage luxury brands and sell luxury brands in China has not managed to keep up. There is a serious shortage of executive talent in the Chinese luxury sector.

Reliance on expats diminished local Luxury Talent

Chinas luxury talent shortage has been compounded over the past 10 years because the Chinese luxury talent pipeline has been fuelled by imported talent from the West or more sophisticated Asia pacific consumer markets such as Hong Kong and Singapore, and Taiwan. This dependency on imported talent has stunted the growth and development of local staff looking for a career path in the luxury business.

Moving up to luxury class

In response to this crisis, Chinese luxury brands/employers are having to adjust their hiring strategy by broadening their outlook beyond luxury sector expertise and becoming more accepting of executives with transferable skills from other sectors such as leadership skills, intellectual agility and emotional intelligence.

Luxury employers are targeting sectors such as high-end hospitality and cosmetics to find thos executives who have been taught high-qaulity customer service, one to one human touch, attention to detail and an appreciation of aesthetics. With compeition for talent being so fierce Chinese luxury recruiters have to look beyond hospitality and  cosmetics into general retail, speciality or mass retail. This can introduce diversity into the luxury house which can bring in different perspectives that when used appropriately can lead to competitive advantage.

To ensure the success of this cross-sector recruitment strategy, luxury houses must develop a solid onboarding program for hires arriving from outside of the luxury sector, which lasts from 6 to 12 months. This should consist of structured program of internal coaching. 

 How Chinese Luxury Brands Can Attract Talent

1.) Simplify reporting structures

2.) Allow for more creativity and experimentation

3.) Improve external understanding of brands

4.) Engage in CSR to show societal value