China’s 3D printing industry is growing, but will they be able to challenge the European and American companies in the long run? From our experience, at Alexander Daniels Global, Chinese companies must overcome 3 main challenges if they want to compete.
American and European companies have previously been dominating the additive manufacturing industry, being the first to develop and adopt the technologies. This domination seems to have come to an end as China enters the competition. Despite the slow uptake of 3D printing, China is now catching up, and a recent report reveals that China’s 3D printing industry is expected to reach one third of the global market by 2020. But will the Chinese companies be able to maintain this growth as they long for talented professionals to expand their business?
The entire industry is in a skill shortage, and it is therefore crucial to be able to attract the scarce high calibre talent in order to expand one’s business. With this HR perspective in mind, the promise of Chinese growth faces a number of challenges.
#1: Establishing a Chinese brand in Europe and US
First off, Chinese companies will experience difficulties with establishing themselves as strong brands within Europe and the US, as Chinese manufacturers have long struggled with the image of producing products of a lower standard than European and American companies. This will not only limit their competitiveness with regards to production but will also limit their ability to attract top talent.
From our experience, candidates have a tendency to put ALL the Chinese manufacturers in the same box, thus comparing a poorly manufactured t-shirt with a high-tech additive manufacturing company.
One way these manufacturers are trying to overcome this, is by hiring European management to attract the best talent in the industry from all over the world. Having a European ‘face of the company’ may attract other European talent and may serve as a ‘stamp of approval’. Therefore, as an increasing amount of Chinese companies are taking on 3D printing, more management roles will be available to Americans and Europeans.
Another way we are seeing Chinese manufacturers trying to overcome this low-quality perception, is in the increasing amount of collaborations and partnering agreements between Chinese and European and/or American companies. An example is the collaboration between AECOM and Winsun.
These collaborations serve as social proof and may be a way of easing the relocation for European or American professionals.
Thirdly, the Chinese manufacturers are investing heavily in marketing which means that we will be seeing a surge in marketing and sales positions within the coming months.
#2: Lower remuneration
If the Chinese manufacturers manage to attract the top talent with a good position and by virtue of a European ‘stamp of approval’, they still need to convince the talent to take the job. This is where they face the second challenge; the salary gap. Very few cities and companies in the APAC region are able to pay the same salaries as in Europe and especially in the US, which makes it less attractive for talent to relocate. We may see Chinese companies compensating this lower salary with more senior positions offered to relocating professionals.
#3: Keeping them put
The final challenge comes once the talent is hired. The challenge is making them stay. Affecting this is the high cultural barrier; European and American professionals without any previous Asian working experience may not be able to adapt to the Chinese culture. This challenge is of course helped on the way by the Chinese hiring European and American talent in bulk, as mentioned previously.
From our experience, working with and consulting Chinese companies within the 3D printing industry, we experienced the above-mentioned challenges. But, we also found the solution to these:
Solution to problem #1:
- Make sure your brand is known: put effort and money into marketing and establishing your company on the European and US market before looking to recruit talent from here
- The face of the company: a step towards a more globally recognised company, and to serve as a stamp of approval, make sure you have some strong collaborations with European and/or American companies
Solution to problem #2:
- Make sure your organization is offering a remuneration package that is comparable to European and American standards. This information can be obtained from our yearly Remuneration Study, which is the most comprehensive in the industry (request the 2016 version by commenting on our LinkedIn post)
- If your organization is not able to offer a higher base salary, consider offering other benefits that are considered valuable to prospective employees
Solution to problem #3:
- European / American management: having a familiar management style is crucial to retaining employees in China
- Ease the transition: the transition period is crucial for retaining employees – make sure your employees have enough support and that they have frequent catch-ups with their manager
What other challenges do you see?
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Signe Damgaard Jensen is the Social Media and Marketing Executive at Alexander Daniels Global.