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Semiconductor HR Leadership: The Talent Challenge in China

  • April 2022

China is the largest semiconductor market in the world, accounting for about 35 percent of the global share. However, local development of semiconductor technology is still substantially behind the leading regions in many ways. The recent growth in semiconductor investment in China, combined with geopolitical challenges, has exposed the urgent imbalances in the supply and demand of high-quality semiconductor talent. For HR leaders in China, this growing competition for qualified professionals poses one of the most pressing challenges they are facing today.

Egon Zehnder recently held a Semiconductor HR Leadership Roundtable on this topic. Participants included a dozen top HR leaders from leading semiconductor companies, representing a broad mix of companies and viewpoints—from multinationals with major operations in China, to established Chinese domestic enterprises and fast-track start-ups. Moderated by Egon Zehnder consultants Richard Lin and Yan Geng, participants had an open exchange about their common and unique challenges and shared learnings and best practices in acquiring and retaining talent in this heated market.

The View from Multinationals in China

Multinationals have become a talent hunting ground across all levels, especially in technology related functions. A significant challenge relates to the current geopolitical landscape, in which many multinationals have become less willing to put core technology development capabilities in China, making it less attractive for many qualified talent. This is more true for mid-level professionals and managers who often have high personal financial burden living in tier-1 cities and have a strong ambition for career advancement. On the other hand, commercial roles and technical customer-facing roles are comparatively more stable and areas of opportunity for MNCs to develop local and global talent in China.

What is working?

  • Campus recruiting is a very important talent acquisition channel. Many of the top professionals in the Chinese semiconductor sector today were hired from campus, and it continues to play a big role in supplying talent for major MNCs operating here. Most fresh graduates want to join an established platform to learn and develop their careers.      
  • Global organization and reach can be leveraged to differentiate multinationals from most domestic Chinese companies. Young talent is often attracted by the opportunity to work with global teams, on global projects, and potentially take job rotations in other countries. 
  • Company values on sustainability and care for people help attract and retain talent who share the same values. Leveraging the positive aspects of corporate culture works in this competitive market.  
  • An active alumni network has been used by some MNCs to successfully hire back and retain key talent. There is an understanding that the culture between MNCs and domestic companies can be quite different, and personal connections can help maintain the bond to attract back talented alumni.

Current focus to improve talent practices:

  • How to better predictively over-hire for critical positions in campus recruiting to anticipate for attrition?
  • How to more efficiently leverage the global talent network to proactively identify top Chinese talent abroad that want to return to China?
  • How to make talent acquisition and retention top-of-mind for the regional leaders and the entire team, not just an HR priority?
  • How to empower China operations more, to motivate local employees and give them more freedom to run at “China speed”?
  • How to tailor programs for individual needs of employees at various life stages? For example, by offering career paths abroad when children are at a stage to seek education overseas.

The View from Domestic Chinese Companies

Many domestic companies are startups and comparatively new. They are well funded and riding on the excitement of an investment boom and national industrial agenda. Potential financial rewards and the opportunity to help shape the domestic industry are major attractions to talent at all levels. However, structure, culture, and technical execution hurdles in a constantly moving market are major challenges in attracting and retaining a highly capable and stable team.

What is working?

  • Flexible structure and decision-making are advantages. Many domestic companies have leveraged their entrepreneurial zeal in attracting top talent by creating custom new positions. 
  • Every employee is a recruiter. Developing an aggressive internal referral program reaps rewards. The motivation starts from the top, putting talent recruitment front and center. 
  • A fully resourced and proactive recruiting team will keep the focus on knowing where talent is and monitor frequently to enable quick action at the opportune time.
  • Competitive financial package. Leveraging the investment trend and capital markets in the Chinese semiconductor sector to bring in top people. 
  • The “China dream” can create purpose. Articulating the vision of a once-in-a-lifetime opportunity to help shape the industry in China is a strong motivating force for talent. 
  • Fast to hit milestones. Market momentum and a high sense of achievement goes hand in hand with the virtuous loop of attracting driven employees.

Current focus to improve talent practices:

  • How to retain talent in the long term, especially for startups that face road bumps along the way? How to develop a culture to sustain growth? In the end, money cannot really do everything. 
  • Many growing pains are anticipated. How to keep key employees patient and focused?
  • How to make sure 1+1>2? Semiconductor is technically complex, requiring teams of specialists to work smoothly together. How to ensure good collaboration of new teams while facing down an intensely competitive external market?
  • How to attract global talent to work for a Chinese company? The geopolitical landscape has inevitably added barriers to the movement of people. How to seek out and attract those who and are willing to take on the risk-reward?

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