For about a year now the dilemma for human resource practitioners in China has been, “When-can-we-start-hiring-again?”

Everyone has been trying to predict the point at which the labor market will take off again, and there have been as many false starts as there has been false pronouncements about the resilience of the Chinese economy.

But slowly there is an emerging, tentative consensus that the economy in China may have turned the corner. Once this happens the labor market will follow. The fact that there is some inchoate movement in the labor market already, with pockets of skills shortages, and an end to some hiring freezes, tends to confirm that something is happening.

A positive feedback loop may be underway, assuming no potential for a financial bubble (see Caveat below). At the very least the stimulus expansion might keep us going until the world’s economy picks up again, and exports start to roll. Here’s hoping.

Scout’s Motto - Be Prepared

It’s odd to be talking about a skills shortage when individuals are still losing their jobs, and companies are still going under. After being burnt so badly by the current economic crisis, this time round companies are going to want to build a high-performance, flexible workforce. Many have gone a long way towards by paring down to the top players in the company.

But soon companies will have to work hard at finding skilled staff in a market where professionals don’t want to change jobs, for a while longer anyway. The time to plan for this is now.

The signals are there already. According to Hay, the banking sector in China is already beginning to hire again. This is partly a result of the general improvement in the economic situation but also because many of them are set to get an RMB license next year. Banks need to hire a recruiting team that can bring on board the capabilities they will need, before everyone else is looking that same skills base.

The same logic of building capabilities now for the coming upturn applies to all industries and sectors in China. By the time the market comes back it will be too late to build the skills and performance culture that will deliver on your sales department’s promises.

Only recently candidates were not willing to take the risk of changing jobs, but slowly we are drifting back to the old paradigm, where candidates have to be closed quickly before one of your competitors gets them. When this process is in full swing, most of the high-value, low-cost, available talent will have been taken up.

A Big Caveat: All of the above puts aside the issues of any bubble that might have been created by the Chinese government stimulus package, and the fact that the economy is not yet offering professionals what they want.

The image below is courtesy of Shanghaiist, and comes from a Gallup survey conducted in November 2008. The question it raises for me is: if China is leading the world out of recession, and we are about to enter an economic boom, why are so many Chinese professionals choosing to leave? Maybe they know something that we don’t know.