The challenge, or opportunity, for the recruitment industry is that the next two decades are likely to be more volatile even than the one we have just lived through. The pace of change is increasing, driven by a new ’Pacific Age’ in globalisation. The labour market will change as the economy changes and one of the main engines for that change is the recruitment industry, which exists to match supply and demand, and thrives on labour market turnover, which in itself rises in response to economic pressures.

What is also evident is that this century is China’s century, and what we are seeing now is the kind of disorder that accompanies the transfer of superpower status. For instance, when the shift was from Great Britain to the US, the process began in 1900 and took two world wars and a global depression -effectively writing off the first half of the 20th century. If the transfer of power to China can be managed in a way which is both peaceful and prosperous, then our economic prospects are astonishing.

If the transfer of power to China can be managed in a way which is both peaceful and prosperous, then our economic prospects are astonishing.

Staffing prospects
So what does this mean for labour? One of the strongest drivers of global growth in the last generation (since China opened up to trade in 1978) has been the phenomenal absorption of rural, low productivity agricultural workers in China into industrial production.

The effect of this is that the average Chinese worker was twice as rich as they were a decade earlier.

China could well spend the next two decades as the fastest growing consumer market L’Oreal, Volkswagen and Tesco become increasingly involved in what will be the largest market in the world by 2030, this will affect their marketing and their employment strategies. By 2030, China will have built 50 new cities, each with 10m people in them.

By 2030 multinationals will be recruiting their key staff from within the countries in which their key markets are based, and many, such as Shell, already are. The investment in human capital by both governments and businesses is already immense.

For instance, as the West feeds on the vast supplies of low-cost labour available in China, it slowly drives up wage rates and the value of the Chinese currency Renminbi or RMB (which China is currently keeping below the rate it would freely float at). China needs to deal with these price effects by improving the productivity of its workforce, which means making higher value-added products and more products per worker. China needs to upskill.

To do this China will need to import technically advanced capital (machinery and software), as well as support services (engineering of all kinds, as well as other commercial services such as consulting and research). In this of HR teams are confident that the UK economy will improve over the next year, according to The Workplace Change Report, a survey carried out by Taleo Researchway, both the West and China get richer. Both invest in their labour forces to drive productivity and trade the outputs on the global market with each other, Chinese wages keep rising, Western unemployment keeps falling, as it switches its skills base from relatively labour intensive industrial production to highly capital intensive knowledge work.

Global readjustments
The current global recession can be seen as an adjustment of global resources to get ready for this next phase of growth. Unemployment in the US of more than 10% is not the result of a credit boom, it is a result of the credit boom ending and some economic reality setting in. For instance, the automotive sector (which since 1990 has just been a distribution arm for financial services) has vastly too much capital invested in both North America and Western Europe.

Around 14m cars per year are manufactured in Western Europe with extremely high-cost labour. There is enormous demand for vehicles, but that demand, and its future production, is in China and India. The demand will be for zero emission, silent (eg Hydrogen fuel cell), urban three-seaters, built for cities where there is no air conditioning, no traffic noise and 10m people living in reasonable harmony with their environment.

China sees itself as the future of the world and certainly the leading force in modernity in the century that has just started. China will leave its mark on everything, as the US has done, and in so doing drive the world into a new century of innovation and growth.

The challenge for the West is to develop the new technologies needed to fuel this growth. That’s an exciting challenge and ultimately one that depends more than anything on the kinds of labour Western businesses recruit now.

Powerpoints
The next two decades are likely to be more volatile than even 2000-2010
Globalisation is forcing the pace of change to increase. Also, this century is China’s century, and the kind of disorder that accompanies the transfer of superpower status is underway now
China is driving global growth
Rural, low productivity agricultural workers in China have been quickly absorbed into industrial production over the last 30 years. Further, thanks to the increasing wage-earning power of the Chinese, China may well be the fastestgrowing consumer market in the world over the next 20 years
Getting ready for growth
The current global recession can be seen as an adjustment of global resources to get ready for a next phase of growth. High unemployment in the US is a result of the credit boom ending and economic reality setting in