Why has human resource management become a more important part of the strategic management of firms operating in China?

Human resource management has become a more crucial component of a firm's strategy for the following reason:

• Due to China's economic growth and movement away from low-skill manufacturing jobs to high-skill jobs (e.g. engineering, developers), there is a greater need to identify suitable talent in order to optimize the company's performance level as a whole.
• These high-skill jobs are also more expensive. Therefore, seeing that wages are a significantly bigger portion of a Chinese company's expenses nowadays, it is important that employees are productive and are monitored in order to ensure that every employee is a good investment for the company.
• There is much more competition in the Chinese labor market now than ever before for high-skill jobs, especially in technology-related industries. Human resource management is thus required to increase retention rates and create a culture which is attractive to new employees.