The conception of competencies has undergone a dramatic change and has become embedded in the field of HRM with a broader domain. It is becoming increasingly important for companies to identify and develop employees’ skills, knowledge and attitudes required to successfully perform a job.

Under the process of globalisation, both national and international political and economic environments changed dramatically, in particular during the recent global financial crisis. As for the key external factors, the politician economy approach identifies the following elements which can operate both independently and in integrated ways: the system of production, the role of government, the broader social and economic environment, labour market regulations and employment relations institutions. As for internal factors, the strategic choice approach identifies the following key elements: business strategies, organisational structure and the integration between these elements and HR policies and practices.

The major pressures in Japan include a relatively long period of economic recession since 1992, relatively high levels of unemployment, higher labour cost and lower productivity, an aging population, and a mismatch between the availability of jobs and the training/education provided to unemployed people and young graduates.

During the export-expansion period, the major recruitment was related to recruiting blue-collar workers with more informal HR recruitment policy. In addition, colleges and universities’ graduate recruitment was one of the major recruitment resources. This period and stage of economic development reflects the needs for mass production with relatively low to middle level of skills. However, following economic development to the stage of the technological-intensive period, the demand for high skills with more formal HR policy and more favourable employment conditions became more significant for companies in order to meet the changing labour market requirements.

A number of factors influenced HR recruitment policy in China during the recent economic reform period, including a gradual withdrawal of the government’s direct intervention at the firm level, increasing diversity of ownership and labour supply in the labour market. Companies have to face competition in the external labour market to gain capable skilled human resources, and at the same time to develop a more flexible internal labour market approach with a more diverse HR policy for managing different types of employees.