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TDC: Mainland's training needs on the rise

The buzz is loud and clear: the Chinese Mainland is short of talent and skilled labour - and needs help. "Training business" is deemed to be one of the highest profitable margin businesses in the Chinese mainand. Clients in the mainland are willing to pay training consultants RMB30,000-50,000 per day for customised courses.

This is the finding of a Trade Development Council (TDC) study released today (June 15) which says Hong Kong is in a profitable position to help.

The Mainland is eager to modernise its industrial structure, upgrade its workforce, and to build a knowledge-based economy with quality people to stay competitive in the rapidly changing business landscape.

Many mainland companies are now seeing the value of training their own people, the TDC report says.

Mainland talents have higher expectations now. Companies need to provide not just training, but also secure talent at an early stage, for instance, attracting fresh graduates. Industry surveys also indicate that mainland university graduates rate highly the prospects and training offered by a company when choosing their jobs.

An overwhelming majority (96%) of the Hong Kong training companies sees promising prospects for their mainland training business over the next 1-3 years.

The most lucrative segment is soft skills related training (like managerial skills, negotiation skills, presentation skills, interpersonal skills and problem solving/decision making) for managerial staff and executives, which accounts for the bulk of users' training budgets.

Users have a strong preference for foreign consultants given their perception that local training companies still lack international exposure and vision.

There is a growing demand for non-management related training courses, for instance, customer services, sales and marketing.

Up to 78% of Hong Kong's training companies are already providing services there - mainly to Hong Kong and other foreign companies. But mainland firms are now becoming the best targets. Many training consultants in China are "checking the temperature" of local mainland companies as they believe business opportunities are emerging.

Companies on the mainland in need of personnel training include those in the manufacturing, trading, and financial services sectors, as well as government.

Mainland users find Hong Kong companies well suited to offer them training in financial, telecommunications and logistics services because of Hong Kong's deep foundation of know-how in these fields and because of its international exposure.

According to the survey, Shenzhen, Guangzhou and Shanghai are currently the biggest beneficiaries of Hong Kong's training services. But training companies see the potential for bigger growth is in Shanghai and Beijing over the next 1-3 years.

Training companies can also meet Mainland's training needs by bringing staff of mainland companies overseas for training. More and more mainland companies and institutions such as government departments and hospitals are sending their staff to Hong Kong to gain working experience and foreign exposure. They opt for training in Hong Kong rather than the US/Europe because of Hong Kong's advantages in professional experience, business culture and language.

Training programmes provided by foreign firms in the Mainland are usually drawn up by consultancy firms to suit individual needs. But these firms are not yet allowed to be wholly-owned, whereas Hong Kong companies can set up wholly-owned consultancy firms under the Closer Economic Partnership Arrangement (CEPA) with the mainland.

This gives Hong Kong firms added advantage in what is becoming a big business.

Training is one of the few business areas that are not dominated by big players. Most training providers on the mainland are small in size. According to industry surveys, 50-60% of training providers employed less than 20 people. In terms of annual revenue, about 70% of the companies earned an annual revenue of less than RMB 2.5 million.

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For press enquiries, please contact TDC's corporate Communication Department at 2584 4333.

This new report is available at TDC's Retail Outlets. It can also be purchased through the TDC Bookshop section in the TDC's trade portal: www.tdctrade.com.

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Content provided by Hong Kong Trade Development Council