From mass market to luxury brands, it seems that virtually all international fashion companies are struggling to find and retain talent to run their operations here. The issue is becoming more dire as retailers expand their presence into second, third, even fourth tier cities where finding and training qualified sales staff for stores to hiring regional brand managers has become extremely difficult. Demand for employees is only increasing as more brands acquire direct ownership of their retail channels from franchise partners.

“If I sat here and I gave you a full-on strategy [for finding qualified people], it would make it [even] more competitive and more difficult,” said Helen Willerton, managing director of Chloé’s Asia Pacific operations. “It is not easy in China. It is particularly hard. There are so many positions to fill and not enough people to fill them. Finding staff in China is on everyone’s agenda at the moment.”

“You are hearing stories of people jumping for double the salary. It is a very volatile market at the moment. I think everyone is very, very aware of that,” Willerton said, adding that Chloé plans to double the number of staff it has in its Shanghai office and is relying on the network of its Chinese brand manager as well as head hunters to try to fill positions.

Several brands declined to comment for this story including Louis Vuitton, Gucci, Chanel and the Gap.

China’s educational system is part of the problem. Although those Chinese who study abroad can be a great managerial fit for foreign retailers, Chinese who study exclusively in their home country often lack the necessary skills. There are a growing number of programs aimed at teaching Chinese students about the luxury business but they seem to fall short of demand.

Fudan University in Shanghai has a luxury training program. Tsingua University in Beijing has a similar course that it operates in partnership with HEC Paris and Institut Francais de la Mode. EMLyon business school operates a program at East China Normal University. French business school Skema plans to start a master’s degree program on luxury and fashion management this September on its campus in Suzhou, a city outside of Shanghai.

“There are things that are starting up,” said Charles de Brabant, who teaches a luxury branding course at CEIBS in Shanghai and is the ceo of consultancy Saint Pierre, Brabant, Li & Associates. “Whether it is enough, probably not. Whether there is a huge need, absolutely. Clearly it seems like a lot of people are thinking about it.”

The Chinese education system’s emphasis on rote memorization rather than free thinking and creativity is another hurdle.

“Chinese students are very accustomed to having a professor stand in front of them and then take notes on very detailed minutia. It is not really a great approach for teaching sales skills,” said Rick Phillips, chief technology officer of Castle Worldwide, Inc., an American company that provides employment training. Castle is currently partnering with China’s education ministry to develop a new program specifically for the fashion business.

Chinese who have worked or studied overseas and are returning to the mainland are in high demand. “The vast majority of these people get snapped up pretty quickly,” said Chris Preston, a senior manager in the Shanghai offices of recruitment agency Michael Page International.

Last year, Gap, which is expanding in China, tapped Redmond Yeung as the president of its subsidiary in the country. Yeung, who is from Taiwan, formerly ran the Chinese operations of Best Buy. But not all companies- particularly those in the luxury sphere-are as open minded about recruiting outside the fashion industry. They are missing out on a “huge talent pool” of people with international experience, according to Preston.

“Tesco did a pretty good job with these things,” Preston said. “And Gap will be a much smaller business to start with, but they have the spending power and the ambition to make it as good or as big as other markets. It is just the idea that for a luxury retailers you have to eat, sleep and live the brand…They are more picky and they have 30 percent more requirements.”

It’s also important that brands don’t limit their search to Chinese candidates. An international mix of managers is often the ideal scenario, according to observers.

“Western brands often think that they can’t be successful in China if their ceo is not Chinese or at least doesn’t speak Chinese. When we look in depth to the management schemes of Western top luxury or innovative brands in China (as often is the case elsewhere), most of them are headed by an extra national president, said headhunter Floriane de Saint Pierre, who runs her own consultancy in Paris. “Some of them are headed by Western managers, who have developed their career in Asia, often in Japan and who know how to surround themselves with Chinese high potential managers, who will be ready very soon for succession plans.”

Companies can also look elsewhere in Asia, particularly Hong Kong and Taiwan, as Preston points out.

“Two years ago, everyone was talking about localization and really needing to have [mainland] candidates because they understand the market and they understand the consumer supposedly better than the Hong Kongese or the Taiwanese,” he said. “That has changed almost 180 degrees in the past year.”

Yet with people brought over from Hong Kong or Taiwan there are challenges. Cultural differences with mainland Chinese can cause friction. Some candidates from Hong Kong and Taiwan have never had experience running a business in China; even if they have that experience, they are often too expensive to relocate to Shanghai, Preston said.

“There are companies out there that have been without general managers or marketing directors for months. There is a huge lack of talent,” Preston said. “We are actually looking in Australia. The effort these companies go to find top talent is remarkable. They will go to the other side of the world to find them.”

The types of positions that companies are looking to fill in China are also changing, especially as more brands buy back their retail operations here. Last July, Burberry announced plans to acquire its franchise operations for $107.8 million. In June, Sergio Rossi said it would buy back its five boutiques in the country from its local franchisee partner. Longchamp and Polo Ralph Lauren have also announced similar plans.

“We are seeing requests for more functional positions that we have not seen in the past,” said Roula Rozakeas, a senior client partner in the Hong Kong offices of executive recruiting firm Korn/Ferry International. Those requests include creative directors, senior merchandising directors, general managers and country managers.

Demand for these positions is also being driven by a shift from managing China operations via Hong Kong offices, which would then report to headquarters back in Europe or the United States to mainland offices now reporting directly to headquarters, Rozakeas said. “That is also creating a demand,” she said. “We need people who can run China at a more senior level.”

For creative positions, Rozakeas said her company is recruiting in Europe or the US. Yet overall “the overwhelming preference is with on the ground candidates who have deep China market experience.”

“But it is not about definitely finding Asian candidates. It is about finding China market experience or Greater China experience,” Rozakeas said. “There are candidates in Australia who have had that type of exposure.”

Marie-Helene Prevot, associate director of the Hong Kong-based Gouten Consulting, said she sees more companies searching for talent from the West. “But these people will have had to have spent six years or eight years in China. Now you can find them, people who are international but have experience in China,” she said.

An international background with China experience however can only go so far, especially when it comes to finding people to manage operations outside of first tier cities, like Beijing and Shanghai. Indeed the next frontier for many brands when it comes to finding employees is in smaller markets, cities like Chongqing in the south, or Urumuqi in the far west where many retailers are opening up new stores or planning to expand.

Regional brand managers are especially difficult to find, according to Godwin Lam, managing director of Trinity Ltd.’s China operations. These managers not only need to be Chinese but they also need to have an acute understanding of cultural and linguistic differences between different geographies as well as have experience managing retail. Qualified candidates who could fill these openings usually move to Shanghai and Beijing and are not that eager to return to less developed areas to work, Lam said.

“We now have so many vacancies that sometimes one brand manager or one merchandiser looks after two regions for one brand,” he said. “We are quite short-handed, I can say.”