Category HR Tips and Practices

Airbus steps up efforts to recruit talent in China

China is poised to become the world’s leading country for passenger air traffic, and the market has already become an important region for global aircraft manufacturers.

Consequently, recruiting talent in China has become crucial for them to make their businesses more sustainable.

Airbus Group, the France-based aircraft manufacturer, and Tsinghua University will launch the 2015 China Summer University event on Monday, as part of Airbus Group’s University Partnership Program.

The event is the first organized in China since the program’s launch in 2014.

“Closely cooperating with top-tier universities and building up a good partnership will ensure absorbing more and more talent for our industry in the future,” Philippe Pezet, Airbus Group China Vice President Human Resources, told the Global Times in an interview earlier in September.

Pezet made the remark ahead of the Beijing Air Show, which will open on Wednesday.

Recruitment

In July, Airbus signed a framework agreement to set up an A330 Completion and Delivery Center in Tianjin with its Chinese partners. The center will cover aircraft completion activities including reception, cabin installation, aircraft painting, engine runs and flight tests.

The plant is expected to create 250 to 300 jobs over the long term.

The jobs are part of the company’s expansion in China as Airbus said it has about 1,550 employees in the country, including those in Tianjin, Beijing and Harbin, Northeast China’s Heilongjiang Province.

“We have high standards. We want people who can speak English. We would like to have people with leadership capabilities, and we would like to have people with the potential to grow and to evolve,” Pezet said.

A few of the positions will be occupied by expatriates because a certain number of expatriates will be needed to train the new Chinese employees, Pezet said. Still, expatriates will make up less than 10 percent of the workers at the facility.

The average turnover rate at Airbus China was 6-7 percent in 2014, or about half the national average.

But Pezet remains unsatisfied with the figure, which is still far higher than Europe’s average turnover rate of 2.5 percent. He said a turnover rate of 5 percent “would be better.”

“We are not recruiting people to hold one position for only a few years. We invest in somebody. We will do our best to develop people, to train, to grow. In terms of selection, we are very cautious and very demanding,” Pezet said.

In the next two decades, the average annual growth rate for the domestic Chinese market will be 7.1 percent, though it will grow even faster over the next decade at 8.3 percent on average per year, according to a report released by Airbus in December.

The report also said domestic air traffic in China will become the world’s highest within a decade.

Mobility

Working for a multinational company means more opportunities to advance, and it is an important measure to keep the talent in the company.

Airbus usually first offers these opportunities to employees who have worked at the company for at least five years.

The overall goal is for 10 percent of the staff to change jobs every year. That could mean simply changing positions within a division or changing divisions within the group, or even changing the country where they work.

“We started at 1 percent, and last year, we did 6 percent. Our objective for 2015 in China is 8 percent,” Pezet said.

However, he said there are lots of obstacles to mobility in China, and accepting geographical mobility is a challenge here. Hukou can be one of constraints on mobility, which is something very specific to China. Europe doesn’t have the same constraints.

Challenges

Several years ago, multinationals were seen as desirable places for employees. Nowadays, things are different, as State-owned companies are getting more competitive, and those companies are also in the process of instituting a global management style and offering more and more international positions, which pose a challenge for multinationals in terms of recruitment.

“We face some departures, resignations from people who are willing to move to State-owned companies, so it’s complicated and more challenging for us,” Pezet said, though he remains confident the company can attract more people.

Still, Pezet worries that very experienced talent is still in short supply in China, as the country’s aerospace industry employment market is less mature than that in Europe.

“It’s kind of a war for getting experienced people due to the pressure and tension on the job market,” Pezet told the Global Times.

Reality check at China’s Huawei boosts wages

BEIJING (Caixin Online) — Competition for fresh-faced university graduates is heating up in China’s telecom sector now that electronics equipment giant Huawei Technologies Co. has significantly hiked salaries for certain white collar employees.

The pay decision is also a signal that the world’s largest manufacturer of telecom gear remains committed to an ongoing expansion that encompasses new arenas, such as consumer smartphones.

First-year worker and junior executive paychecks were pushed up by as much as 35% in August following a July 29 announcement by the Shenzhen-based company.

Just a week earlier, Huawei’s biggest domestic rival, ZTE Communications HK:763 -0.13% CN:000063 -2.18% ZTCOY -0.27% , unveiled a new equity incentive plan designed to retain key white collar workers. The company said it would distribute about 103 million company shares as bonus compensation for 1,531 select employees.

Huawei’s pay hikes not only upstaged ZTE’s highly touted incentives program but also brought its salary scale a notch closer to levels offered in the country by foreign competitors including telecom multinationals Ericsson, Nokia NOK +0.25% FI:NOK1V +1.08% , Siemens XE:SIE +0.26% SI +0.12% and Samsung KR:005930 +0.97% SSNLF +2.50%

Probationary salaries for 2014 college graduates hired by Huawei will rise to more than 9,000 yuan ($1,470) per month from 6,500 yuan USDCNY -0.01% . Master’s degree graduates will be offered more than 10,000 yuan a month to start, up from 8,000 yuan, the company said.

Altogether, Huawei said it would boost the companywide payroll by more than 1 billion yuan. Performance-related pay hikes will range from 25% to 30%, depending on the type of work.

Management thus hopes to attract and retain employees in a competitive labor environment where Nokia, Siemens and other foreign companies generally offer new bachelor’s degree graduates at their China divisions between 8,000 and 10,000 yuan per month, said Wei Xiaokang, a headhunter for Beijing-based Offercome, which focuses on matching jobs and job seekers in the Internet industry.

“Huawei’s workplace environment is more intense than that of Ericsson and other multinational companies,” Wei said. “But the pay is lower.”

Huawei has also been fishing for talent in ZTE. Indeed, according to a ZTE source, the Huawei pay increases “drove ZTE (management) crazy” because in the first half of 2013 “a number of people” left ZTE for jobs at Huawei.

ZTE employs an estimated 50,000 to 60,000 people, one-third as many as Huawei.

“Raising junior executive salaries on such a large scale, as Huawei has done, undoubtedly marks a significant change in remuneration policy,” said Wei.

And it’s a surprising change for the company’s labor policy considering the weak business atmosphere in the telecom industry, where of late many companies have been downsizing, trimming costs and reducing product lineups.

Financial strength

Huawei was apparently in a better position to raise wages than its rivals thanks to high revenue growth during the first half of 2013, says Deutsche Telekom International Consulting’s director in China, Fang Honggang.

Privately held Huawei, which releases only sales revenue and net profit margin figures in its financial statements, reported “relatively optimistic… accounts receivable, bad debt treatment and possible risks,” Fang said.

Huawei reported sales of 113.8 billion yuan for the first six months of the year, up 10.8% over the same period of 2012. Moreover, company management forecast a 2013 net profit margin of 7% to 8%.

A Renmin University professor who also serves as a Huawei corporate management adviser, Wu Chunbo, said the company’s first half 2013 net profit was 14.3 billion yuan.

With the company on a sound financial footing, management was well prepared to turn attention to making junior executive salaries more competitive, a Huawei representative said.

Sales and marketing jobs in demand

The Chinese central government’s call to boost domestic consumption has helped to make sales and marketing positions hot in the job market, according to Kelly Services’ Salary Guide Greater China 2013 report released in late February.

Although tense competition in the Chinese market has restricted growth of many organizations, the report found that workers who remain in sales and marketing positions can expect to receive a 5 to 10 percent salary increase in 2013. Those changing jobs can expect to receive a 20 to 30 percent salary increase.

In the retail sector, sales, marketing, merchandising, store management, and operations positions remain in demand, although some headcounts were frozen in the first quarter of this year.

The human resources sector is equally promising. Top HR candidates with proven experience across all disciplines are in demand. Candidates who change positions can expect to receive a 20 to 30 percent increase in salary while the average increase for candidates remaining with their firms is over 10 percent.

Meanwhile, positive growth trends of the US automotive industry will be a boon for the Chinese market, which is expected to grow at a steady 8 to 10 percent clip this year. Top candidates will be needed in the industry in R&D positions, which are important for localizing manufacturing and product development.

While some information technology companies’ hiring plans will be frozen in 2013 due to the economic downturn, the Chinese IT industry is nevertheless expected to face a shortage of 2 to 5 million workers in the next 10 years. Positions pertaining to the 3G platform, cellphone operating systems and e-commerce are expected to remain in high demand.

“We are happy to report that in spite of some concerns, we are not seeing any significant slowdown in the China labor market,” said Nick Lesser, general manager of Professional & Technical Division at Kelly Services, China Operations.

“In fact, we are finding that in addition to steady demand for resources in tier-one cities such as Beijing, Shanghai and Guangzhou, clients are expressing increased interest in expanding their operations all around China,” Lesser said.

“The salary ranges in our guide are based on actual transactions between employers and employees, and represent an accurate reflection of the marketplace,” he said. “Market-driven salaries are of course crucial, but only by creating a meaningful employer-of-choice culture is it possible to attract and retain talented staff.”

Recruitment kicks off for Disney Shanghai theme park

Walt Disney Co started a recruitment campaign in China on Tuesday for its new theme park in Shanghai.

A total of 39 positions are being offered on the company’s website to support the resort project in Shanghai’s Pudong district.

Positions include assistant contract manager, IT infrastructure manager, and employees responsible for administrative management matters, purchasing, and engineering projects.

The resort, which is expected to open in 2015, will have a theme park, two hotels, various dining and entertainment venues, recreational facilities, a lake and transportation hubs.

The total investment is expected to reach 24.5 billion yuan ($3.84 billion) for the theme park and 4.5 billion yuan for the hotels and other facilities.

Measures boosting workforce expertise

A raft of favorable measures, including expanding recruitment programs, are leading to more foreign experts and expertise, a senior official said at a forum on Monday.

State-owned enterprises directly under the central government have hired more than 1,600 overseas employees, said Huang Shuhe, deputy director of the State Council’s State-owned Assets Supervision and Administration Commission.

“International experts have helped these enterprises produce many of the world’s leading technologies and products with their own intellectual property rights, and that has laid a foundation that will carry the enterprises forward,” he said.

A number of recruitment programs are in operation.

The Recruitment Program of Global Experts is one and through it a research and development group, involved with 15 State-owned enterprises in Beijing, hired 136 high-level experts.

China started the program in 2008, in a bid to attract 2,000 overseas professionals to key projects across a range of sectors from engineering to finance.

Another recruitment program, which started last year, aims to introduce up to 1,000 foreign professionals over 10 years to help spur innovation, promote scientific research and corporate management.

The project has just brought in 94 recruits, according to Zhang Jianguo, director of the State Administration of Foreign Experts Affairs.

Professionals recruited by both programs will be entitled to subsidies, research allowances, favorable salaries, residency permits, medical care and insurance policies.

Professor Robert Gilbert, 66, was one of the new recruits.

Gilbert, an Australian who studies nutrition and food science, started work in China in October. He plans to build his own laboratory at Huazhong University of Science and Technology and Wuhan University.

China’s emergence as a major global economy has made many foreign professionals shift their focus from traditional talent absorbers, such as the United States, he said.

“I enjoy being in China. It’s very comfortable working and living here and I will probably prolong my stay in China when my contract ends in four years,” he said.

Although China has been trying hard to attract international professionals, the country is still at the preliminary stage of attracting global talent, according to Wang Huiyao, director of the Center for China and Globalization in Beijing.

Only about 600,000 foreign professionals have work permits in China, while the US annually grants more than 100,000 green cards for foreign talent and nearly 90,000 talent visas, he said.

“We should do more to get global talent, for example by introducing more favorable and convenient visa and residence policies,” he said.

Wu Jiang, director of the Chinese Academy of Personnel Science, said the country should optimize its structure of recruitment.

“For example, China only has 10 percent of its foreign experts working in the economic field. It’s too low,” he said. “We know what kind of talent we need most only after we get a better understanding of the country’s talent and industrial structure.”

The government should also provide better public services and make its legal environment for talent introduction better, Wu suggested.

Eyeing up jobs with Chinese companies

More foreigners are employed by or showed a stronger interest in working for China-based companies against a backdrop of the rise of the country’s economy and the global expansion of many Chinese firms.

Huawei Technologies Co, the world’s second largest telecoms equipment maker by revenue, surprised people last year by inviting John Suffolk, former UK government chief information officer, to act as its global cyber security officer.

Suffolk is one of the most influential foreigners to work with a Chinese company. He works at Huawei’s headquarters in Shenzhen, a coastal city in South China’s Guangdong province, and reports directly to Huawei’s chief executive officer, Ren Zhengfei.

After Suffolk joined Huawei, Omar Khan, former chief product and technology officer of Samsung Mobile, was appointed co-chief executive officer of Beijing-based NetQin Mobile Inc, a mobile security software provider.

Khan was dubbed “the Godfather of Galaxy” after launching perhaps one of the best series of smartphones the Android mobile system has seen yet – the Samsung Galaxy S line.

The trend of more talented foreigners joining Chinese companies is just beginning, analysts said. Yang Haifeng, a telecoms expert who is also chief editor of Communications World Weekly, said the vigorous Chinese economy, coupled with overseas expansion of many Chinese businesses, would create many opportunities for skilled people worldwide.

“Chinese companies can provide them (expatriates) with promising prospects, good experience and, of course, generous salaries,” said Yang.

Duncan Clark, chairman of BDA China, a consultancy company that follows China’s IT industry, said some companies in China are beginning to “transcend their Chinese-ness”.

“In companies, I think we are almost beyond the ‘them and us’ of foreigners and Chinese. Once a company is founded by entrepreneurs, it doesn’t really matter where the founders are from. We are entering the age of the ‘multinational startup’,” Clark said in an email sent to China Daily.

This new breed of company is far more attractive to expatriates to work for than the traditional Chinese company, he added.

ZTE Corp, the world’s fifth telecoms equipment vendor, earns more than half of its revenue from overseas markets. In some developed countries, such as in the United States, about half of ZTE’s management team are expatriates, according to Dai Shu, director of corporate branding and communications at ZTE.

Dai said ZTE provides an equal playing field when it comes to promoting talented people. “Sometimes, foreigners have more advantages than Chinese staff because we measure performance largely by the results they deliver,” Dai said, pointing out that foreigners usually produce good results because they are culturally more close to clients.

In addition to talented foreigners, Chinese companies are also very interested in taking people who have experience in foreign companies. Lenovo Group, China’s largest PC maker, hired more than 40 laid-off employees from its mobile product rival Motorola Mobility Holdings Inc in October.
Chen Wenhui vice-president of Lenovo and general manager of phone research and development, said once Lenovo heard the news, it went to Nanjing Motorola’s R&D center immediately.

Former Motorola talent would improve Lenovo’s overseas market research ability because Motorola had many long-serving staff with good overseas experience, Chen said.

When the search giant Google Inc said it was shutting down its search service Google.cn on the Chinese mainland in 2010, its Chinese competitors also seized the opportunity to hire the US company’s best staff.

A number of Google’s senior executives left the company amid rising speculation that Google may further withdraw from the Chinese mainland with its decision to redirect its mainland traffic to Hong Kong.

These included Zhu Huican, the inventor of Google’s image search service, who went to Tencent Holdings Ltd as the chief architect of the company’s search service, but later he left again, and Wang Jin, who has been working at Baidu Inc as vice-president of technology after he left Google as former deputy director of its engineering and research institute.

For Tencent Holdings Ltd, the biggest Internet company in China by sales, talent is talent, whether it is Chinese or foreign.

“Bringing in foreign talent is quite normal here,” said Chen Shuanghua, assistant general manager of Tencent’s human resources department, adding that it is not the nationality but ability that matters.

Quite a few of Tencent’s employees used to work at major IT companies, including Microsoft Corp, Google Inc and Oracle Corp, he said.

Tencent hired Steve Gray, former executive producer at Electronic Arts Inc. Gray, who led the project for the Lord of the Rings franchise, used to be invited to give lectures at Tencent. After Gray and Tencent knew each other better, he was offered a job at Tencent in 2009 as an executive in charge of game production. Tencent is the biggest online game operator in China.

It’s not just research and development that benefits from foreign talent. So does global business expansion. Chen said Tencent’s WeChat, a hit messaging application on mobile devices, owes part of its success to the overseas marketing teams that hire local foreigners.

As part of its recruitment efforts, Tencent has taken a team to the top US universities, such as Harvard and Massachusetts Institute of Technology, every year since 2008 to recruit those with a masters in business administration. Chen said each time Tencent recruits about 10 people, most of whom will be deployed in the strategy and investment divisions.

By the end of this year, the company will have added 5,000 more people, boosting its total payroll to more than 20,000 employees, Chen said. About half of them are fresh graduates from Chinese universities, while the rest are experienced professionals.

Looking forward

Chinese companies are going to seek more international talented people as they embrace the global market. An increasing number of foreigners are considering working for Chinese companies because they believe the experience will add depth to their resumes, analysts said.

About 80 percent of the international talent in Chinese companies work in sales and marketing departments and are not based in China, according to Steve Shen, manager of information technology at Shanghai-based head-hunting company Robert Walters Talent Consulting Ltd.

Chinese companies need local talent to run their businesses in Europe and the United States because Chinese employees are not familiar with marketing procedures in the West and find it hard to explore the local markets.

Slowing economic growth in the West is also providing an opportunity for Chinese companies to lure talented foreigners and more candidates are expressing an interest in job offers from China, a country with three decades of constant economic growth, said Shen from Robert Walters.

The steady economic growth has also put Chinese enterprises in a good position to attract experienced people in the research and development sector.

Although only one in five of foreigners working for Chinese enterprises are R&D specialists, the amount is set to surge in the coming years because Chinese companies are planning to localize product designing and manufacturing in target markets, said Shen.

“China has a lack of experienced and skilled researchers and developers. International candidates with work experience are highly competitive in this area,” added Shen.

In addition, as an increasing number of Chinese companies transform from outsourcing manufacturers into retailers directly targeting local customers, they need to build a local team strong enough to power the strategic shift. Locals are often the most suitable candidates.

However, ambitious overseas expansion plans pose a series of challenges to the Chinese headquarters. One of the most stubborn ones is how to manage enlarged overseas branches.

“The cultural difference is a big problem for most of the expatriates working in China and for Chinese companies and it may affect foreigners’ careers in China,” said Shen.

Chinese enterprises will also need to figure out how much administrative powers should be delegated to overseas directors and how to effectively manage the overseas offices.

Another reason that Chinese offers have become popular among overseas job seekers is because the experience will make their future job hunting easier. Foreign companies are more willing to give jobs to those who have worked in China or for Chinese companies because the second largest economy is appealing to many foreign enterprises as a place to do business.

More overseas workers value the experience of working in China more than their pay, according to Shen.

“A China element in a candidate’s resume will award them extra points when looking for jobs with international corporations,” said Shen. “We are definitely going to see more foreigners working for Chinese employers as the nation’s economy continues to grow.”

China 51job Q4 Profit Surges; Guides Q1 – Quick Facts

51job Inc. (JOBS: News ) reported net income of RMB46.4 million or RMB1.67 per ADS for the fourth quarter, compared to RMB6.8 million or RMB0.24 per ADS in the prior year quarter.

Excluding items, non-GAAP adjusted income was RMB52.6 million or RMB1.90 per ADS, compared to RMB13.6 million or RMB0.48 per ADS in the year-ago quarter.

Total revenues for the fourth quarter increased 15.2% to RMB226.0 million from RMB196.2 million in the same quarter in 2008.

For the first quarter of 2010, the company anticipates non-GAAP earnings of RMB0.68 per share to RMB0.78 per share, and revenue of RMB230 million to RMB240 million.

Good English ability helps people gain jobs, higher pay: survey

TAIPEI, Taiwan — Proficiency in the English language helps create better job opportunities and brings comparatively higher pay for employees in Taiwan, according to the latest survey by an online employment agency. As high as 68 percent of enterprises or organizations in Taiwan include a good command of English among the major criteria when recruiting new employees. They are also willing to offer an average of NT$3,105 more in starting salaries to those with stronger competence in the international language.

The survey by online job agency www.1111.com.tw also shows that companies in the field of trading, product distribution, industrial and commercial services and education, as well as government agencies place the highest priority for English proficiency.

However, only 22 percent of salary earners presently possess credible English proficiency certificates.

A high percentage of job seekers — 67 percent — admit they lost interview opportunities when looking for new jobs because of inferior English capability.

The survey finds that 71.2 percent of employees believe that improved English ability will bring more employment opportunities and better positions with higher pay.

But among the 78.2 percent of employees who still have no English proficiency certificates, 64 percent acknowledged that their current level is still not up to the tests, while 36 percent said they even don’t know how to prepare for such examinations.

A representative of the Educational Testing Service (ETS) of the U.S. stationed here said the average TOEIC (Test of English for International Communication) score in Taiwan ranks at eighth place in the Asian region, falling behind China and South Korea.

The general English level of professionals like certified public accountants and lawyers, as well as R&D staff at electronics and other high-tech companies in Taiwan, is below international standards, hampering the nation’s overall competitiveness in the world market, he said.

But he also pointed out that the number of people taking the TOEIC certifying test here has continued to increase in recent years, rising to 180,000 in 2008 from about 40,000 in 2004.

This shows that more people in Taiwan have become aware of the important role of English language in their careers.

Another positive development is that the average TOEIC score of marketing staff here has risen above the level of people in similar positions around the world, he said.

The survey of English proficiency and job opportunities, covering 488 employees and 1,465 employees, was carried out islandwide Oct. 1-14 this year.

No free lunch in China…

by Patrick O. Courtois, DaCare Consulting

I tend to receive a recurring misconception about the Chinese labor market from overseas-based clients. This misunderstanding primarily affects overseas-designed provisional staffing budgets as well as the perceived value of quality of China-based recruitment agencies. In short, agencies are perceived to attempt inflating candidate packages for higher fees. While some rogue agencies do, there is a distinctive trend that the cost of Chinese talent is catching up with international benchmarks.

China is an emerging Dragon, Shanghai, a crouching tiger… China is an emerging and developing economy. At least, it is its official status according to the International Monetary Fund’s World Economic Outlook Report, dated April 2008 (1). Taking into consideration the measurement criteria, based on statistical indexes of element like income per capita, GDP, literacy rate and such, are calculated against the sheer size of its population, it can only make sense.
Shanghai is, along with Beijing, Guangzhou and Shenzhen the economy’s locomotive. Having the status of “wealthiest” city in China, with a GDP per capita, above US $7,000 for 2007, it is however still far behind any Major European capital (2). To give you a clearer idea, Shanghai’s GDP per capita is below a city like Istanbul, Turkey (3). Once again, keep in mind the size of Shanghai’s population (over 15 million souls) and you can understand that GDP per capita does not necessary reflect the reality of local white collars, which are far from being the majority.

Another interesting piece of information is the Mercer’s 2008 Worldwide Cost of Living survey (4), which gives us an idea on the rising costs of living in Beijing and Shanghai, with both cities present in the Top 25. The results, however not entirely applicable to local nationals, as based on expatriate populations, still gives us an insight on a certain reality of the local economy. That is, the gap in cost of living observed between a modern city like Shanghai and other “emerging” one, in China.

Despite all these, Shanghai can still be considered as a “cheap” city, with low business operations related costs, minimal salaries requirements, and reasonable living costs below those of similar sized cities in US or Europe.

The “Made in China” picture of low wages is still relevant today. Compared to wages in the EU or US, employing local nationals is indeed an affordable option. Looking at the table 1 comparison of the median US, UK and Chinese total packages (salary + bonus and benefits) on some common positions, the point is made. At first glance, it quickly illustrates the cost-effectiveness of employing local nationals, considering we are talking about the “median” or average population, of course. It quickly demonstrates that employing the “average” local candidate can still be regarded as a cost-effective solution.

If you pay peanuts, you get monkeys… No offence to anyone in particular, as this applies to pretty much anywhere around the world… But, If you take a closer look at this “average” labor market, as it is the one providing input for most official statistics, surveys and other reports that one can easily find online and, incidentally, the segment on which a lot of people base a provisional recruitment budget upon, you get a rather interesting picture… Simply put, by a fellow recruitment specialist, “the average employee in China does not speak English, he does not work in a foreign firm, he does not think outside the box, understand western reporting structures, go to a top university, or have a chance of getting hired into your firm…”(5).

The average candidate has also the shortest retention potential, following a simple logic of job hopping for ever shinier titles and bigger financial packages, thus leaving a city like shanghai with a dramatic employee turnover at around 18 months and a managerial workforce with somewhat arguable overall managerial skills.

If you are the decision maker of one of these multinationals, which are slowly initiating a shift toward management localization by cutting off expatriates’ budget plans, would you really consider handing over the keys to your financial, commercial or product development operations to an average candidate whom, however nice of a person, would most likely fail to properly relate to, understand or even communicate on basic day to day issues?

No money, no honey… On the other hand, you have the candidates which are at the center of what is now known as the “Talent War” (6). These are candidates with bilingual English abilities, 5 to 10 years of solid people and projects management experience, strong overseas exposure, the ability to think in a systemic way, whom are fully acquainted with western reporting systems, can deal with foreign clients with the highest level of service quality, have graduated from top Western universities and can leverage on the added-value of their biculturalism. These are the candidates companies are fighting over for in Shanghai, Beijing or other tier 1 cities, with packages narrowing closer to those in the US or Europe, and sometimes going well beyond.

Figure 2 sheds some light on a more relevant picture of the Shanghai employment market (for top candidates), with key functions such as Finance, HR or Sales clearly aligning themselves on EU/US levels. This “headhunter’s” dream can quickly turn into an employer’s nightmare, if the latter does not properly understand the realities applying to the local market: An overall talented, self-motivated, creative, and experienced manager is a scarce resource in China, and a 28 years old sales manager making above RMB 1 million (EUR 100,000) is common.
Assignments, completed by Orion China, regularly cover positions for Financial Controllers around the RMB 500,000 (EUR 58,000) figure, HRDs in the vicinity of RMB 700,000 (EUR 80,000) and many others, with financial packages often giving a new meaning to the common image of China as the land of cheap labor. You need to face the facts, if you want to buy yourself the next superstar everyone else wants, you will most likely have to fork out a substantial amount for it, at least, more than your competitors.

Money can’t buy happiness…but you can definitely get yourself a top senior HR or Finance candidate, in China, for the right price… Sure, there are no comparisons possible between a Shanghai or Guangdong based factory worker and his counterpart in Europe, the US or Japan. China has and will continue to retain its image of “world’s factory” for years to come, with affordable labor costs and ever increasing quality standards. Nonetheless, good management, talented leaders and high potential profiles come with a high price tag, just like it would, in “Developed” economies.

Companies that will successfully implement localization strategies, in the upcoming years, and leverage on the amazing opportunities this rapidly growing market yields; are the ones currently understanding that quality, experience and skills come at a certain price, in particular in the Chinese economic capital Shanghai is. A solid and ethical executive search firm, with deep networks, up-to-date market knowledge, and experienced consultants, is therefore a partner of choice to prevent your next hiring from becoming a time bomb, in your company’s development plan, or a pricey mishap that may not look great during your next board meeting.

Hiring expectations decline in 2nd quarter

Multinational companies’ (MNC)’s hiring expectations have largely declined in the second quarter, after sustaining a high level for a long period, but are rising in some sectors, a recently released human resources (HR) report said.

However, most respondents of globally leading recruitment and HR management firm Hudson’s survey remained optimistic, saying they considered an imminent recession in China’s employment market unlikely.

The global Hudson Hiring and HR Trends Quarterly Report surveyed 718 executives of MNCs in China from sectors including banking and financial, IT and technology (IT&T), manufacturing, consumer, and media, public relations and advertising.

It said overall hiring expectations in the emerging market are declining, with 52 percent of respondents expecting to increase headcount, compared with 61 percent in both the previous quarter and the corresponding period of 2007.

The report also found 14 percent of respondents in China expected the country would face a recession in the next six months – fewer than in any other Asia market surveyed. In Japan, for example, 41 percent of respondents believed a recession was imminent.

Of those anticipating a recession in China, 73 percent believed it would impact their industries.

At 57 percent, the banking and financial services sector reported the highest hiring expectations – although 12 percentage points fewer than in the first quarter.

Some banks are more cautious in their hiring projections, particularly in the consumer-banking sector, where they haven’t yet obtained all required licenses, Hudson’s Shanghai General Manager Angie Eagan said.

Employment expectations are rising in the media, public relations and advertising industries, where 55 percent of respondents forecasted headcount growth, compared with 47 percent in the first quarter. Many agencies started hiring after Chinese New Year, when clients had finalized their marketing budgets.

The IT&T segment also reported rising expectations, with 55 percent of respondents saying they will hire more staff – compared with 50 percent in the first three months of 2008. The sector remains buoyant as companies continue localizing IT operations.

Manufacturing companies’ expectations increased slightly, with 53 percent planning to increase hiring, compared with 51 percent in the first quarter. Construction of MNCs’ new manufacturing facilities in China is mostly driving demand for workers.

Expectations underwent the steepest fall in the consumer industry, plummeting to 45 percent from 72 percent in the first quarter.

Hudson said many companies in the sector have been expanding headcount for a long time and have by now filled most positions, ushering the industry into a consolidation phase.

Recession doubted

Only 14 percent of respondents in China forecasted a recession in the next six months, reflecting the country’s economic buoyancy. Responses from China were fairly consistent across industries on the issue, although at 21 percent, those from the IT&T sector were most inclined to expect a recession.

“This may reflect a continuing caution in the wake of dotcom failures, as most companies in this sector are busy and are recruiting additional staff,” Eagan said.

Most firms would adopt headcount freezes in a recession, with 84 percent of respondents saying they would use the policy to weather the tough times.

Use of salary freezes was the second most-frequently mentioned recession-survival method, with 35 percent of respondents in China saying they would use the policy – more than in any other surveyed Asia market. Firms in China were also the most likely among those surveyed on the continent to cut training in the event of a recession, a measure 18 percent of respondents mentioned.

Media, public relations and advertising firms were particularly reluctant to cut staff, with just 15 percent mentioning the option. However, they were most likely to freeze headcounts and salaries, at 94 and 48 percent, respectively.

At 33 percent, banks were the most likely to cut staff in a recession, as high salaries are typical in the industry.

Firms in the IT&T sector were most likely to cut training, with 44 percent of respondents mentioning the option. “Technical training can be very expensive in China,” Eagan said.

HR challenges

As in the other surveyed Asia markets, “hiring the right staff” and “retaining talent” remained the most critical challenges.

Across all sectors, 48 percent of respondents said recruitment was the greatest challenge, while 27 percent said retention was.

Compared with other surveyed markets, respondents in China most emphasized recruitment over retention. The country also had the highest percentage of firms identifying recruitment as the greatest challenge and the lowest identifying retention.

At 65 percent, the media, public relations, and advertising sector had the most respondents identifying hiring the right staff as the greatest challenge. The market for talented professionals with relevant experience has remained tight, especially at senior levels.

Retaining talent is a major concern for the banking and financial services and the manufacturing sectors. In the banking and financial services sector, 30 percent of companies identified this as their most critical challenge, as did 28 percent in manufacturing. Currently, companies in both sectors are focusing on retaining high performers with specialized skills.