Category HR Tips and Practices

A Good Career Move Means a Job in Asia

By Erin White

From The Wall Street Journal Online

During the dot-com boom, ambitious U.S. business-school students looked West to Silicon Valley for opportunities. Now some are looking East to Asia for full-time jobs as well as summer internships.

China, where there has been rapid economic growth in the past few years, has the most allure. But other markets, including India and Singapore, also are drawing M.B.A. job candidates.

They’re attracted by the adventure of working in Asia as well as the chance to gain experience in a region that is increasingly important to U.S. companies. Knowledge of Asia, especially China, could help propel their careers, they believe. Another draw, especially for entrepreneurial types, is the chance to get in on the ground floor of new businesses and potentially earn big sums or quickly move up the ranks.

A February career fair for international jobs held by seven top U.S. business schools attracted 337 applications for 48 jobs in Asia, says Bilal Ojjeh, chief executive of MBA-Exchange.com, the service that helped organize the fair, which included Harvard, Stanford and Columbia universities, the University of Chicago, Massachusetts Institute of Technology’s Sloan School of Management, University of Pennsylvania’s Wharton School and Northwestern University’s Kellogg School of Management. Last year, a similar career fair had 26 Asian job postings, and drew only 212 applications.

“There’s just this tremendous interest,” says Joseph Kauffman, a 27-year-old first year student at Harvard Business School who is co-president of its Asia Business Club. With 160 members, it’s one of the biggest clubs there. Mr. Kauffman figures he’s gotten about 20 emails from classmates he doesn’t know who want to talk with him about working in Asia. Mr. Kauffman himself is headed to Morgan Stanley in Hong Kong this summer.

Risha Bond, a 26-year-old first-year student at Stanford University’s Graduate School of Business, has her sights on India. A native Midwesterner, she isn’t ethnically Indian, is fluent only in English and has never even visited India. But this summer, she wants to land an internship doing biotech work at a big energy company there.

She could find similar work in the U.S., but she’s more excited by India. “The growth in India is so hot,” she says. She likes the business challenges, and thinks that ultimately, it could pay off financially. “It could be a very lucrative play,” she says. “You establish yourself early and in a young industry…that’s potentially big business.”

The companies that are hiring U.S.-educated M.B.A.s for posts in Asia are often the same ones recruiting lots of M.B.A.s for American jobs: investment banks, consulting firms, and big multinational corporations in areas such as consumer products, technology and health care. But although many of these companies are expanding their Asian operations, these jobs aren’t always easy for Americans to get.

For many Asian posts, language skills are a must, which knocks most Americans out of the running. What’s more, American M.B.A.s face growing competition from Asian M.B.A.s, either ones who are educated at Asian business schools, or U.S.-educated Asians returning home. Since Sept. 11, 2001, it’s gotten harder for these international students to find jobs in the U.S., so even though many would prefer to land jobs here, they often return home, says Phil Han, a career counselor at the University of California at Los Angeles’s Anderson School of Management. Harvard’s Mr. Kauffman encountered tough competition for his Hong Kong summer internship, despite impressive credentials. He grew up in rural Pennsylvania, but is a fluent Mandarin speaker after studying it in college and working at Coca-Cola Co. in China for four and a half years after graduation.

Many of his English-only classmates wouldn’t have passed an early-round interview: a half-hour phone conversation conducted entirely in Mandarin with two employees in Hong Kong. In further interviews, he had to push hard to demonstrate his serious interest in Asia. “Competition was extremely stiff,” he says.

Lower salaries deter some American students. It’s not a big issue with investment banks and top consulting firms, which generally pay M.B.A.s comparable or just somewhat lower salaries for Asian posts. “There is a differential but it’s not a show-stopper,” says Christopher Morris, director of M.B.A. career management at Wharton.

But for other jobs, the pay difference can be significant. A consumer-products or pharmaceutical company, for instance, might pay roughly half the U.S. salary of $85,000 to $95,000 to a “local hire,” says Mr. Morris. Students can negotiate to get closer to the U.S. salary, but their pre-M.B.A. experience makes a big difference. That’s why many M.B.A.s hope to work in the U.S. for a few years, pay off their loans, and get some experience in Asia later on in a cushier expat assignment.

Still, despite the hurdles, the numbers of Asia-bound students are growing at some campuses. At Wharton, Mr. Morris estimates that at least 7.5% of second-year students will take jobs in Asia on graduation, up from 6.3% last year. At Dartmouth College’s Tuck School of Business, it looks like at least 20 first-year students will take internships in Asia, about double the number from last year, estimates Richard McNulty, director of the career development office at Tuck.

Kevin Widlansky, a 30-year-old Detroit native, took a job with McKinsey & Co. in Singapore after graduating from Wharton in December. He found salaries in the region to be somewhat less than similar jobs in the U.S. But with the lower cost of living and lower taxes, “I would say we’re at least even,” if not saving more in Singapore, he says. Plus, he loves the challenge of working in such a dynamic place. He already speaks fluent Mandarin and has started studying Burmese. “Excellent teak,” he says of the wood the country is known for. And who knows, he jokes: In 10 to 15 years, Myanmar could be the next big thing.

Recruiting in China

An “adventure” is what Dave McCann calls the quest to recruit and retain good workers in the rapidly changing economy and market in China.

“The opportunities are great, but they create HR challenges,” says McCann, who is based in Beijing and has responsibility for HR activities for PricewaterhouseCoopers throughout China. The country may have a population of 1.3 billion people, but there’s a war for talent as fierce as in many parts of the Western world, he explains.

Carrie Conlon, director of human resources for Nanjing Interbrew Breweries in Nanjing, says China is undergoing significant changes and wants a market economy. “But they don’t have the talent,” she explains. “They haven’t recognized the need to train people to go into that type of economy.

And managers are particularly hard to find. “The challenge is finding managerial talent,” she says. “You can’t find a marketing director to save your soul.”

The reason: While many Chinese professionals have good technical educations, few have managerial training because in the past managers were promoted based on their political party allegiance. “There never had been any selection criteria; it was not attached to skills,” she says.

While managers are in particularly short supply and attracting good ones can present a special challenge, the truth is that recruiting for any position in China can require a whole new outlook. In some cases you may need to rethink what you know about finding and hiring talented workers because, when it comes to recruiting, China has its own particular rules of the road.

Do’s and Don’ts

As in other countries, companies operating in China can use campus recruitment, job fairs, newspaper advertisements, search firms, internal referrals and the Internet to search for the right talent. But, “in terms of hiring, there are more than a hundred ‘do’s and don’ts,'” says P.O. Mak, president of the Hong Kong Institute of Human Resource Management.

“First of all, you have to know where you are and what kind of people you wish to hire. And then, a thorough knowledge of applicable law is important,” says Mak.

Given the complexity of the market, Annella Heytens of Watson Wyatt urges U.S. companies to develop a well-thought-out recruitment strategy that spells out screening and interviewing methodology.

“Do not look for the perfect candidate–he or she does not exist,” Heytens says. Other mistakes: being inflexible with the benefits package and taking too long to interview or make an offer, in which case, “You may lose a good candidate,” she warns.

In addition, she warns not to market the company too optimistically or negatively. “Be realistic when describing the working conditions,” she says, because new workers “may not stay too long if you misrepresent the company.”

When interviewing, don’t be fooled by “a perfect accent and Oxford English,” Mak warns. “You still need to probe into values and experience. In the older days, many firms hired people primarily because of language proficiency. Don’t do this anymore. I put values first because unfortunately–due to education systems, culture and norms–we tend to see a big gap between ‘our’ values and ‘their’ values, and this can make or break a working relationship.”

Conlon warns that Chinese interviewees “may not be polished. Be cautious not to make a judgment on that.”

Unlike Heytens, Conlon advises conducting several interviews because people in the Chinese culture tend to be less direct than in Western cultures, and they “take a long time to say what they want to say. Bring them back, so they feel comfortable and you get the information you need. Tap into their true potential. The system is not geared to helping people know their own potential.”

Michael Colozzi–general manager for Portola Packaging Inc. in Shanghai–agrees. “Everyone I hired on my immediate staff I interviewed five times,” he says. “In two cases, I gave people minor assignments to prepare presentations. I tested them. I let everybody know I was extremely serious.”

Camille Elliott, who returned from Beijing last year to work as a recruitment manager for PricewaterhouseCoopers in the San Francisco area, also made use of multiple interviews in China. In fact, Elliott would regularly ask a Chinese native and someone from the West to interview and assess a candidate’s ability to balance Western and Chinese styles of management. The Chinese management style tends to be very directed, she says, and Chinese managers “tend not to have the coaching skills that you as a Westerner would like to see.”

This lack of managerial skills can be overcome, says Colozzi. Chinese managers “don’t like to make decisions without having 100 percent of the facts,” he explains. “In the United States we’re not reluctant. If we make a mistake, we clean up the mess and start again,” he says. But he has found that Chinese managers can learn to make direct decisions “and you’ll be amazed at how creative they are at solving problems.”

Conlon adds that references are easy to obtain in China. “You can call up a previous manager and ask for a reference. People have been pretty open.”

Recruiting Recent Graduates

Competition for workers has heated up on campuses. Students are “looking for high-paid, challenging work,” says C.P. Lee, HR director for Motorola (China) Electronics Ltd. In the past, new graduates usually went to government jobs, but “recently the government has relaxed the rules, allowing them to join foreign-owned companies and joint ventures.”

Motorola and many other companies offer internships to lure recent graduates. During the campus recruitment season–from October until December–companies go to each university and meet with students.

The university controls much of the process, according to Lee, who has worked in China for six years. Foreign companies are required to pay a fee to the university’s education fund to cover part of the cost of the student/hiree’s education, he says. That usually costs about $1,500 to $2,000 in U.S. dollars for a bachelor’s degree.

“Most students come prepared with questions about benefits and the type of training the company can provide. They also ask about location. They want to go to the cities seen as the most open in China,” according to Lee, such as Beijing and Shanghai.

When McCann came to China from the United Kingdom in 1997, young graduates were naive, he says. But today he finds them better prepared. “They are more savvy about how they present themselves, in how they develop relationships” with companies, he says.

Colozzi also finds young workers quite savvy. “I’m amazed at the number of young people who come to see me who have taken it upon themselves to look up our web page and have done basic research on companies.” He finds workers younger than 30 “very hungry to learn things. If they feel the boss is going to be a good teacher, you’ve got the battle half won.”

Attracting Experienced Workers

Experienced workers in China also want to learn new tasks and to work for companies that provide opportunities for growth and travel, according to the HR professionals interviewed for this article.

First on their list is training, Lee says. “They want good exposure to modern management and new technology, the opportunity to go overseas and to have career advancement.”

According to McCann, Chinese professionals “are looking to build their resumes by working with a company that is well recognized. They like working alongside expatriates; they recognize that they can learn from them about the behavioral characteristics it takes to be a professional in the West.”

At the same time, state-run companies are becoming more efficient–and better able to compete for talent, McCann says. “They are becoming attractive places for some people who want to work for a Chinese company, not just be a steward of a multinational company.”

Salaries are getting more competitive in state-run companies as well, but there is still a gap. “People who leave us are predominately going to multinationals,” says McCann.

One possible source of talent for multinational companies is Chinese nationals who have been working in other nations. “Many Chinese who are working in other parts of the world are looking to come back where they can make a difference,” says McCann. “They feel they will be able to make a real mark” back in their homeland now that the environment is less restrictive.

But Mak warns: “Try not to hire people with ‘green cards.’ There are lots of returnees to China from the U.S., but unless you are prepared to help them resolve tax and other related issues, stay away.” He says many of these people “come in with a different mentality and don’t usually work well with pure locals.”

Pay and Benefits

Chinese workers are learning the intricacies of Western compensation packages, such as variable pay and stock options. For example, Western companies that have variable pay plans at home “will probably have them here,” says McCann.

“Differentiation for performance is not a new concept in the West, but it would have been here a few years ago,” he says. Today, he sees “no resistance to meritocracy. It works very well. People do see a correlation between performance and reward. It mirrors much of what has happened in the West.”

Benefits issues are complex, according to Mak. “First of all, that China is a low-cost country is a myth, though it is still true in the southwest regions and inland. Benefit cost as a percentage of compensation would range from 30 percent to 80 percent, depending on where you are. Some benefit contributions are required by the government as statutory.”

While salaries generally have been lower in state-owned companies, benefit packages are much better, according to Elliott. That makes it difficult to assess the cost of individual compensation because benefits may include housing, international travel and allowances for clothing and a car.

According to tradition, housing isn’t provided for locals hired locally, says Mak. But now, “Due to the generosity of foreign companies and a lack of understanding of the norm and culture, housing is expected, especially by senior locals.”

Workplace Metamorphosis

When China first opened to foreign investors, HR-related laws were geared to controlling their activities “as well as facilitating the transfer of training and technology to the local labor workforce,” according to Mak.

“We couldn’t hire directly from the market unless we were legally registered and conducting business, or in partnership with a local partner,” says Mak. “The Foreign Enterprise Services Company (FESCO) was formed to act as a ‘medium’ or government vendor to hire and refer ‘talents’ to foreign companies establishing themselves as ‘Representative Offices.’ FESCO set the rates.”

The other reason for establishing FESCO was to handle the files of local workers. According to rules at that time, foreign entities were not allowed access to these files, according to Mak.

As China eases “its rule on equity and ownership of companies, more foreign firms–having had the painful experience of partnering with JVs [joint ventures]–have resorted to forming ‘wholly owned foreign enterprises.’ As a result, they can hire directly,” he explains. But, FESCO still exists to work with new entrants, which can only set up as a Representative Office, he says.

Mak believes China remains “provincialized” despite its open-door policy and that rules, regulations and practices still vary greatly from one province to another. “This has created a big challenge in terms of hiring and moving people around. Although there is a tendency for flexibility, it will not be easy to hire a person from Shanghai to work in Beijing due to the existing ‘hukou’ (residence) policy.”

But other HR professionals working in China say workers are being allowed to move from one area to another and that use of the residency policy is being relaxed. “Cities realize they no longer want to restrict people,” says Lee. “In major cities, the governments are beginning to welcome highly talented people. They are becoming more flexible,” Lee says.

Another recent change in China may help companies retain workers, Colozzi notes: Locals are now able to own property, although mortgages have been available only for the past two years. As in the United States, tax incentives encourage ownership. “For the first time, people can develop equity in something,” says Colozzi. “They may be more reluctant to jump off the horse they’re on” in favor of a new job.

In fact, he says, attitudes about job hopping have shifted in the past two or three years. “When I first got here, by [age] 27 people often had had five jobs. Salaries were inflated.” Today, “Word has spread that job hopping is not good, that it doesn’t help your career chances.”

But other HR professionals working in China say workers are being allowed to move from one area to another and that use of the residency policy is being relaxed. “Cities realize they no longer want to restrict people,” says Lee. “In major cities, the governments are beginning to welcome highly talented people. They are becoming more flexible,” Lee says.

Another recent change in China may help companies retain workers, Colozzi notes: Locals are now able to own property, although mortgages have been available only for the past two years. As in the United States, tax incentives encourage ownership. “For the first time, people can develop equity in something,” says Colozzi. “They may be more reluctant to jump off the horse they’re on” in favor of a new job.

In fact, he says, attitudes about job hopping have shifted in the past two or three years. “When I first got here, by [age] 27 people often had had five jobs. Salaries were inflated.” Today, “Word has spread that job hopping is not good, that it doesn’t help your career chances.”

But other HR professionals working in China say workers are being allowed to move from one area to another and that use of the residency policy is being relaxed. “Cities realize they no longer want to restrict people,” says Lee. “In major cities, the governments are beginning to welcome highly talented people. They are becoming more flexible,” Lee says.

Another recent change in China may help companies retain workers, Colozzi notes: Locals are now able to own property, although mortgages have been available only for the past two years. As in the United States, tax incentives encourage ownership. “For the first time, people can develop equity in something,” says Colozzi. “They may be more reluctant to jump off the horse they’re on” in favor of a new job.

In fact, he says, attitudes about job hopping have shifted in the past two or three years. “When I first got here, by [age] 27 people often had had five jobs. Salaries were inflated.” Today, “Word has spread that job hopping is not good, that it doesn’t help your career chances.”

salary negotiation tips

Salary negotiation (asking for a salary increase, a pay rise, or simply more money) affects everyone from time to time. Salary negotiation can be difficult, and many people handle it poorly, causing frustration and ill-feeling. There are constructive ways to approach salary negotiation, and techniques to achieve good outcomes. If you are a manager, you will need to handle salary negotiation positively. If you encourage people to adopt a constructive approach to salary negotiation, you will help to minimise upset and to achieve a positive outcome. As a manager dealing with salary negotiation or a pay increase request, it’s important to encourage a grown-up, objective, emotionally mature approach. These ideas and techniques will help achieve this whether you are giving or receiving the salary increase request.

There is no ‘proper’ or standard way to ask for a raise or salary increase. It’s not something that people are trained to do, and little is written about it. People use various approaches: they can write; discuss informally; discuss with colleagues and hope the boss gets to hear; they drop hints to test the water; they ask the boss politely; demand firmly; go over the boss’s head, or maybe even threaten to resign, secure another job offer, or simply resign.

Largely people do not look before they leap; they are often under pressure, and they feel uncomfortable and stressed asking, so they fail to plan and control the situation, which makes achieving anything difficult. Simple planning and keeping control makes a big difference. The techniques here might not secure a salary increase immediately – there are usually very good reasons why this is not possible anyway – but these ideas will eventually bring a better reward and outcome than doing nothing, or doing something the wrong way. As a manager receiving a request for a salary increase, encourage people to follow this approach, and then respond fairly sensitively and openly. Only make promises you can be sure to deliver, and always try to understand the person’s needs and feelings before you explain the company’s position.

It is important always to recognise the difference between the value of the role that you perform (or any employee’s role if looking at this from a manager’s perspective), and your value as an individual (or the employee’s value). The two are not the same.

If you continually feel frustrated about your pay levels despite trying all of the techniques and ideas for achieving a pay rise, it could be that your boss or employer has simply reached the limit of the value that they can place on your role, which is different to your value as an individual. You could have a very high potential value, but if your role does not enable you to perform to your fullest extent then your reward level will be suppressed. For example does a professor who sweeps the street deserve a street sweeper’s salary or a professor’s salary?

Salary levels are largely dictated by market forces (notably the cost of replacing the employee), and the contribution that the employee makes to organisational performance (which is particularly relevant for roles which directly impact on profitability). When you acknowledge this principle you begin to take control of your earnings.

Aside from issues of exploitation and unfairness, if you find that the gap between your expectations and your employer’s salary limit is too great to bridge, then look to find or develop a role which commands a higher value, and therefore salary. You can do this either and both with your present employer by agreeing wider responsibilities and opportunities for you to contribute to organisational performance and profit, and/or perhaps with a new employer.

Focus on developing your value to the employer and the market-place, rather than simply trying to achieve higher reward for what you are already doing.

salary, pay and contract negotiation for a new job

If you are changing jobs, the best time to negotiate salary is after receiving a job offer, and before you accept it – at the point when the employer clearly wants you for the job, and is keen to have your acceptance of the job offer. Your bargaining power in real terms, and psychologically, is strongest at this point, and is stronger still if you have (or can say that you have) at least one other job offer or option (see the tips on negotiation). A strong stance at this stage is your best chance to provide the recruiting manager the justification to pay you something outside the employer’s normal scale. The chances of renegotiating salary after accepting, and certainly starting, the job are remote – once you accept the offer you’ve effectively made the contract, including salary, and thereafter you are subject to the organization’s policies, process and inertia.

A compromise in the event that the employer cannot initially take you on at the rate you need is to agree (in writing) a guaranteed raise, subject to completing a given period of service, say 3 or 6 months. In which case avoid the insertion of ‘satisfactory’ (describing the period of service) as this can never actually be measured and therefore fails to provide certainty that the raise will be given.

If you are recruiting a person who needs or demands more money or better terms than you can offer, then deal with the matter properly before the candidate accepts the job – changing pay or terms after this is very much more difficult. If you encourage a person to accept pay and terms that are genuinely lower than they deserve, by giving a vague assurance of a review sometime in the future, then you are raising expectations for something that will be very difficult to deliver, and therefore storing up a big problem for the future.

Recruit Holdings Joins Forces With Netease For Job Portal

Hong Kong-listed recruitment advertising group, Recruit Holdings Ltd, is going to cooperate with Netease.com (NTES) to launch a job-seeking portal 1010job.com.

1010job will not only provide job related information to the huge traffic of viewers generated by NetEase, but will also provide ‘Elite Job Forum’ in association with ‘NetEase Forum’. A unique ‘CV Through Train Service’ will be provided to the 160 million NetEase mailbox users to facilitate their needs in job application. Apart from that, Netease and 1010job will produce more value-added service to jobseekers based on their shared ‘jobseeker-centred’ concept.

The potential of the online recruitment market in China has been attracting steadily increasing foreign investment. Major online recruitment providers from Europe, America and Japan have already devised and actioned a variety of strategies enabling them to participate in exploiting the Chinese market.

2006 is seen as being a landmark year for foreign investments coming into China. Following Monster’s acquisition of a major stake in ChinaHR, Japan Recruit, Japan’s largest recruitment service provider became a significant shareholder of 51job. Enjapan, the second largest online recruitment website in Japan announced it had agreed to cooperate with 800HR, a segmental recruitment website in Beijing. The largest recruitment website from Ireland, Keyland, has been even more aggressive in merging two local recruitment websites in Shanghai and Beijing, respectively. Meanwhile, major players from Taiwan and Hong Kong have also expedited their expansion into the mainland market. Taiwan’s biggest recruitment website, 104 HR bank has already entered Shanghai.

The New Science of Hiring

Care to dramatically enhance your chance of finding great employees? Trade in your gut instincts for a systematic approach to interviewing, testing, and evaluating job candidates.

What was her company missing? Susan Bowman asked herself that as soon as she plopped into her chair at Tri-anim, a medical-supplies distributor in Sylmar, California. It was two and a half years ago. Bowman had just joined the company as head of human resources, and her highest priority was improving the company’s hiring. When she arrived, the HR department was basically shut out of the hiring of salespeople. Bowman wanted to make it more useful, especially after she noticed some hires were fantastic and others were disappointments.

What Tri-anim was missing–and Bowman fortunately recognized this–was something most employers in America have been missing: Conventional job interviews don’t work.

A typical interview–unstructured, rambling, unfocused–tells the interviewer almost nothing about job candidates, other than how they seem during a couple of meetings in a conference room. But what are these people like late at night and under pressure? What motivates them? How smart are they? Have they handled tough projects? Do they prefer working alone or are they better with a team? Regular interviews assess barely any of this, and in fact are miserable predictors of job success. In technical terms, they have a .2 correlation with predicting success.

Discouraging, isn’t it? It would be–except that industrial and organizational psychologists are on the job, seeking the best ways to evaluate job candidates. A focused three-part approach can make the hiring process as standardized and objective as possible–and can help predict the best performers. The system starts with what is called behavioral interviewing, in which candidates are barraged with tough questions about how they’ve handled specific assignments and problems. Bluffing becomes close to impossible, and the process is based on facts, not feelings. Interviewing is followed by two kinds of tests: cognitive tests, which measure intellectual ability, and personality tests, which are now sophisticated enough that companies can directly compare candidates with their top performers. The third step is asking candidates to do tasks like the ones they’d do on the job.

Most employers will recite over and over that people are the secret to their success–and given that turnover costs about 1.5 times the salary of the employee who moves on, according to PricewaterhouseCoopers, they’d better mean it. But it’s astounding how few companies bother with more than improvised, all-but-meaningless interviews to hire their people. “This is a topic that’s been researched to death by the field of industrial and organizational psychology,” says Peter Cappelli, management professor and director of the center for human resources at the Wharton School of the University of Pennsylvania. “The amazing thing is how few companies take this seriously. It’s kind of mind-boggling that they would undertake such huge investments and not pay attention to what we know about how to pick out the people who are going to be best.”

Susan Bowman had been studying some of this research. She was pleased to see that Tri-anim had been using the testing company PSI to assess candidates for some positions. She was less pleased that the test criteria hadn’t been updated in six years and that some of the company’s hiring managers didn’t use the tests. Bowman immediately had PSI reassess the best and worst performers in a number of areas and develop profiles of the top performers. The goal is to compare candidates with the ideal. Tri-anim salespeople, for example, need to be not just energetic and detail-oriented (pretty common in salespeople) but also unusually independent: They spend a lot of time alone.

Bowman began requiring the PSI assessments as a last step in the managerial, IT, and sales hiring processes. They’ve already turned up surprising results. Recently, a recruiter and a manager were disagreeing over two candidates for a position–until the PSI reports came back. “The results were really staggeringly different. It was a combination of not only skill sets, but that one individual’s people skills were so much lower than the manager had anticipated and the other candidate scored much higher,” Bowman says.

She has now trained all of Tri-anim’s hiring managers in behavioral interviews. “Structured interviews with behaviorally based questions really allow us to drill down,” she says. In a daylong session, the managers learned the tenets of behavioral interviews and practiced asking open-ended questions. Though she doesn’t use work assessments–and that could increase the company’s hiring success even further–these two steps paint rich, objective portraits of candidates. Even the sales hiring managers, who didn’t want to abandon their random interviewing tactics, have become believers as turnover has dropped. “We all want to hire the best,” Bowman says. “This gives really good, objective information that allows the manager to take the halo off the applicant.”

Step 1

In which the bored interviewer turns intrepid interrogator
Other than people’s wan complexions beneath fluorescent office lights, there’s not much that’s consistent in typical job interviews. Topics discussed completely depend on the interviewer, who might spend an hour discussing a candidate’s alma mater, the recent weather, or even himself. He could dismiss the candidate before she’s even started speaking because she’s overweight or overdressed, or he could lose focus because he’s having a rotten day. Afterward, the interviewer is left with a resume and a vague sense of…how the candidate acts during an interview. Is she qualified? Dunno, but her resume looks nice. Would she be good at the job? Well, she likes to sail, which is fun.

.2 Correlation between conventional interviewing and successful hiringAs psychologists have pointed out, traditional interviews produce a subjective, acutely narrow view of a job candidate. That view is likely biased–studies have shown interviewers tend to prefer candidates similar to them, judge candidates on fewer criteria than they think they’re judging them on, and tend to let biases about matters like race and gender get in the way. “Everybody thinks they’re much better interviewers than they are,” says Ben Dattner, a New York City industrial and organizational psychologist.

Still, the interview is a brilliant tool if you make certain changes to it. Behavioral interviews have almost triple the correlation of conventional interviews with job success. (To gauge if a hire is successful, academics use measures like the dollar value of an employee’s contribution to the company, his or her relative share in overall output, and later performance reviews, promotions, and raises.) Behavioral interviewing involves, by definition, a group of interviewers defining qualities needed for a job, asking candidates to give past examples of how they’ve demonstrated those qualities, asking the same questions of each candidate, and taking notes throughout. The premise is that what someone has done in past jobs is a superior indicator of what he or she will do in future jobs. It’s the same idea behind checking references.

To see how structured interviews work, take a look at Hope Lumber & Supply, where HR chief Bill Vogt credits much of his company’s growth to behavioral interviewing. Hope, which is based in Tulsa, brings in $1.2 billion a year selling building supplies to contractors. Eight years ago, when the company was making a fifth of that, Vogt and the owners predicted, correctly, that the housing market was about to surge. If they hired the right managers, they could ride that wave.

Following behavioral-interviewing maxims, Vogt starts by talking to people intimate with the job and deciding what qualities are necessary for it. He has a standard template for what he wants in managers: leadership, a drive to make money for the company and for themselves, ambition, and past operational responsibility. Depending on the challenges of the specific business unit, he’ll alter the template.

Then he comes up with open-ended questions that get at the desired qualities. Behavioral interviews use questions that are rooted in the past–“Tell me about a time when”–rather than hypotheticals–“What would you do if?” Vogt digs deep into his candidates’ work experience. “I get into the current operation,” he says. “What did you inherit? What were the sales margins, accounts payable, percent current status, inventory like? What did you do with that, what did you achieve? Clearly, we’re looking for achievers and winners and people very knowledgeable of their operation.” Specific questions like these, in addition to assessing candidates’ skills, combat resume fraud–it’s pretty difficult to lie about sales margins and inventory turns.

Ideally, a team of people will meet with the candidate. That minimizes the importance of any one person’s reaction, good or bad. Vogt arranges a panel interview for general questions, and then sets up one-on-one interviews focused on specific areas. Vogt asks about EEOC compliance and OSHA incidents; the CFO asks about accounting details; the COO asks logistics questions. In any behavioral interview, questions should be job-related, to keep the interview relevant and to avoid discrimination complaints. To the extent possible, every candidate should be asked the same questions. Interviewers should take notes, and should get together to discuss their views just after the candidate leaves.

Step 2

In which the candidate relives college-entrance tests
As helpful as behavioral interviews are, they’re even more effective when combined with employment tests, many of which are now administered online. These are given to candidates to assess either cognitive abilities (cognitive tests are filled with SAT-like verbal and math questions) or personality traits (personality tests include preferential questions like “Would you rather spend a night at home alone than go to a crowded party?” or biographical questions like “Were you a class officer in high school?”). While cognitive tests have a slightly closer correlation with job success, personality tests are useful both as a basis for interview questions and for subsequent development. For the best results, companies should use both sorts of tests or a single test that combines the two elements. (For a roster of tests, see “Choose Your Weapon”.)

Many testing companies today can do impressive comparisons of candidates against existing employees–the goal being to essentially clone top performers. “The assessments allow you to really identify what is different between our stars and our slugs,” says James Hazen, an organizational psychologist and the owner of Applied Behavioral Insights, a consulting firm based in Wexford, Pennsylvania. Hazen uses several tests with his clients.

2,500 Number of cognitive and personality tests on the marketAssessments can turn up some fascinating findings. Dayton Freight Lines, a trucking company based in Dayton, Ohio, had been having trouble with drivers. Customers reported that some drivers were rude. Some drivers were complaining over their CB radios. Some workers’ productivity was falling, or they were late on their deliveries. Denise Noel, the director of quality at Dayton Freight, was stumped. These drivers all had good qualifications and had interviewed well, yet she saw no way to predict who would be an outstanding performer on the road. Finally she brought in a company called Hogan Assessment Systems and had the company present its extensive research on truck drivers.

Noel had assumed all truck drivers were similar. But Hogan had found two distinct truck-driver profiles. The top city performers are social and gregarious, great with customers–which makes sense, because they pick up and drop off multiple times a day. The best line-haul drivers are quiet and introspective–which is good for people who never see a customer. Noel has adjusted her hiring now, having candidates take the Hogan assessment to find the best job for them. Turnover for drivers has fallen to 22 percent (the industry average is 116 percent). “You just think a driver is a driver, and that’s not true,” Noel says. “We just didn’t look at that part of the hiring process enough.”

Discussing the results of assessment tests with candidates–or even giving them the full report–is increasingly popular. “The trend has really been to lay it all on the table between the second and third interviews,” says James Hazen. This gives candidates the chance to explain themselves, gives the interviewer a chance to address weak spots, and, if someone is hired, points out ways he or she might best be managed.

There are, by some estimates, 2,500 employment tests on the market. One of the biggest mistakes companies make is using the wrong test. A classic example is the Myers-Briggs Type Indicator, that ubiquitous test that sorts people into 16 personality categories. Myers-Briggs, a test created by a Pennsylvania woman who was fascinated by how her merry personality differed from that of her straightforward husband, has a weak record of predicting job success. Indeed, its publisher warns that “It is unethical and in many cases illegal to require job applicants to take the Indicator if the results will be used to screen out applicants.”

With so many tests available, it’s not a surprise that employers use tests meant for other purposes, like Myers-Briggs (which is fine, by the way, for employee development), or even design their own tests. But choosing the wrong one can mean dismissing qualified candidates and even getting sued for discrimination. Employers need to know whether a test is appropriate for hiring, what it measures, and how it’s designed, along with making sure it’s legal. Psychologists evaluate a psychological test by two measures, called reliability and validity. Reliability examines whether items that supposedly measure the same thing (agreeableness, say, or conscientiousness) correlate highly with one another. Validity asks, in this case, for proof that scores on tests are related to success in specific jobs. “If you go out on the Net and look at the hundreds of tests out there, a very small percentage have validity data,” says Seymour Adler, a senior vice president at Aon Consulting and a teacher of organizational psychology at New York University.

Recent psychological research supports going beyond validity and reliability data. First, both for legal purposes and to ensure usefulness, make certain the test is designed for selecting–as distinct from developing or training–employees. It should be created or adapted for the workplace, not for clinical or medical diagnosis. Pre-employment tests are more predictive when they compare an individual’s score against a group (they use “normative” scales, in the lexicon) instead of just presenting it on its own (“ipsative” scales). For the best results, too, employers should continue to evaluate and revalidate the tests within their companies to make sure they are still predicting top performers.

A note about testing for hourly employees. There, employers might care most about who’s punctual and honest. Rock Bottom Restaurants, a 29-store chain based in Louisville, Colorado, switched three years ago from a pencil-and-paper application for its hourly employees to a test from Unicru. (Kenexa and PreVisor are two other assessment companies focusing on entry-level and hourly applicants.) For waiters, it tests for sociability and team orientation; for the back of the house, it asks applicants whether they’ve worked in on-their-feet jobs before; for all job candidates, it looks at integrity. Applicants in each pool–cooks, bartenders, and so on–are ranked according to their assessment scores, which gives the Rock Bottom management a good starting point. “It’s not 100 percent predictive, and that’s why we interview people, but it’s at least an indicator,” says Ted Williams, senior vice president of the brewery division at Rock Bottom. Rock Bottom’s turnover for its 6,000 hourly employees has dropped by 20 percent, which Williams thinks is largely because of the system.

Step 3

In which the process starts to imitate finding World War II spies
In 1943, a pretty countryside residence in Fairfax, Virginia, was renamed Station S and repurposed as a testing site for Office of Strategic Services recruits. In an atmosphere of intense secrecy–candidates were stripped of their clothes and given military fatigues, then driven in a windowless van to Fairfax, where they would invent a cover story and fake name–the OSS studied their performance during job simulations. One test had “couriers” giving candidates a map, which they’d need to memorize in eight minutes. Other exercises included interrogating ersatz prisoners of war, devising propaganda plans, and recovering papers from an agent’s room (and, aggravatingly, getting interrupted by a rifle-wielding “German” midway). The tests went on for three and a half days.

Inspired by that work-based approach, corporations such as AT&T starting using assessment centers to select executives. By the late 1950s, the candidate in the gray flannel suit was performing in-basket assessments in which he’d be graded on how he handled a set of letters, papers, tasks, and telephone calls that mimicked what he’d get on the job.

Today’s work samples are essentially updates of those AT&T tests. Work samples are a proven predictor of success and can be simple to arrange. A company can design its own by laying out the criteria for a job and asking a candidate to perform a task based on those criteria. For example: “Explain how you would sell this product to Target, step by step,” or “Tell me how you’d improve these lines of C++ code.”

4 Number of weeks capital H Group dedicates to hiring a single consultantAt Sterling Communications, a technology PR firm in Los Gatos, California, CEO Marianne O’Connor knows her account reps have to be good at understanding technical information, at figuring out how to pitch to a media outlet, and at writing. Logical enough. So she’s started giving job candidates a two-hour test before she even meets with them. It describes a client’s technology, identifies a target publication and its readership, and asks a candidate to distill the salient technical points and write a pitch to the magazine. Three staffers review the pitch, and that decides whether the candidate will get an interview. “If they can’t write in my business, it’s not going to work,” O’Connor says.

On the complicated end of the work-sample spectrum, Seymour Adler, the Aon Consulting psychologist, has created a four-hour online exercise called Leader, which Motorola and other companies use to test would-be executives. Candidates see an in box with e-mails that came in the night before, answer phone calls and listen to voice mails, and have access to reports and research. They’re asked to tackle tasks like ones they would see on the job, such as solving a conflict between two underlings or leading a team of workers in creating a presentation for the CEO. At the end, Adler’s team assesses the candidates on whatever areas the company is curious about–decisiveness, leadership, and so forth–and issues a report to the company. A company called Development Dimensions International offers similar exercises; these take place at one of its 75 assessment centers rather than online. Half-day and full-day job simulations cost from $4,000 to $12,000.

And finally…

Put it all together– without riling your candidates
Dan Weinfurter runs Capital H Group, a human resources consulting firm in Chicago, though he’s not an HR guy but an entrepreneur at heart. He founded the accounting and consulting firm Parson Group, which hit No. 1 on the Inc. 500 in 2000 with a four-year growth rate of 27,992 percent, and sold it four years ago for $55 million. Before that, he was second in command at Alternative Resources, an IT staffing company that was a two-time Inc. 500 honoree. For all he knew about running a company, however, Weinfurter came to the conclusion that he didn’t know much about hiring. “I thought I was pretty good at interviewing,” he says, “but I was no better, and maybe was worse, than other people. If you’re just going through it and trying to guess, you’ll guess right some of the time. But you won’t be able to guess right often enough to grow a business from scratch.”

So at Capital H, he unleashed his on-staff psychologists, who created a hiring system that’s a textbook example of the latest hiring research. Let’s say Capital H has an opening for a consultant. A group of candidates are interviewed by telephone by the HR manager (or by Weinfurter himself, if the position is very senior), and candidates with appropriate skills and backgrounds are then passed to a local office to meet with local executives. He or she takes the Watson-Glaser Critical Thinking Appraisal, a popular and well-validated cognitive-ability test, and the Devine Inventory, which measures the applicant’s traits and tendencies against those of existing Capital H consultants. (See “Let’s Turn the Tables” for a sample of questions from Watson-Glaser.) About one in four candidates are then flown to Chicago headquarters, where they spend a full day in behavioral interviews with multiple executives. Finally, applicants are asked to choose a presentation they’ve done in the past and give that to a group of Capital H execs back at the local office in a work-sample exercise. The executives discuss the candidates until they reach consensus.

Weinfurter figures he spends up to four weeks, and tons of his workers’ billable hours, per interview. But he estimates the cost of hiring a bad consultant can be in the millions, considering not just salary but also missed sales and lost clients. “I think the hiring process is the most important process in business, but it’s probably the least disciplined in terms of how it’s executed across American business,” he says.

People who study hiring, and business owners who are passionate about the subject, love to see systems like Capital H’s. Candidates may not feel the same way. Certainly you’ll have to make concessions in some cases–say you’re trying to recruit a CFO from a rival company. “If they’ve already done a job like this, what’s the point of the test? It’s not obvious you want to give this to everyone and for every job,” Peter Cappelli at Wharton notes. In every case, candidates will have a better attitude toward the process, and the company, if they believe that the hiring methods are respectful, fair, and smart. So use appropriate cognitive tests–don’t ask accountants basic math questions. Use only tests designed for the workplace, so that the questions clearly deal with business situations and seem relevant. And explain why you’re adopting an approach that to some candidates will seem overwrought: to be fair and quantitative.

There will always be skeptics about this approach to hiring, people who believe their gut tells them more than any structured interview or test could. And while Bill Vogt or Denise Noel or Dan Weinfurter could offer testimonials about the new science of hiring, the point is not that this system has worked in a handful of cases. It’s that hundreds of studies have confirmed that testing and structured interviews do a much better job at finding good workers than do regular interviews. Given that, the gut-feel proponents start to seem like people who eschew antibiotics in favor of good old-fashioned bloodletting.

Maybe people don’t like to believe that something as crucial to a business as hiring can be reduced to a series of processes. After all, we rely on feeling and judgment to get through our lives, whether to fall in love, keep safe on dark streets, or assess business partners. This science-based approach isn’t perfect. It won’t anoint every superstar, and it won’t bar the door to all of the mediocre players. What it will do is give employers a fuller, more balanced, and fairer view of candidates, and give them a much better shot at hiring the best people. It’s still up to employers to make the call on whether to hire or to pass, and that’s where feeling and judgment still play a part. But that part now comes after employers have gathered all of the facts.

Stephanie Clifford is a staff writer.

Stealing Managers From The Big Boys – China Headhunting Story

Chinese companies are energetically wooing execs away from multinationals

By just about any measure, Aaron Tong was a success. He was pulling down $100,000-plus as a senior manager of Motorola Inc.’s (MOT ) cellular division in Beijing and had worked in Singapore and the U.S. But two years ago, when TV-and-phone-maker TCL Corp. asked if Tong might accept a position as vice-president, he jumped at the chance. Although the modest salary hike and stock options were welcome, that wasn’t what really attracted him. “They were offering me a more challenging job,” says Tong, 42. At “a Chinese company, you can do a lot more important things than with a multinational.”

Tong isn’t the only Chinese manager being poached from the global giants. Tang Jun, president of NASDAQ-listed online gaming company Shanda Interactive Entertainment (SNDA ), served as president of Microsoft Corp.’s (MSFT ) Chinese operations. Jean Cai, head of corporate communications at Lenovo, is a veteran of Ogilvy & Mather Worldwide and General Electric Co. (GE ) Telecom equipment maker Huawei has hired people away from Motorola and Nokia, while Haier (appliances), China Netcom (telecoms), and Brilliance China Automotive Holdings (CBA ) have lured staffers from consultants McKinsey, A.T. Kearney, and Boston Consulting Group.

This migration is a big change from five years ago, when no self-respecting white-collar worker in China would have dreamed of quitting a foreign company to join a local outfit. These days the turbo-charged growth, global aspirations, and deep pockets of China’s ambitious private companies are looking better all the time. In 2000 locals made up just 20% to 30% of the managers recruited in China by headhunter Heidrick & Struggles. Today that figure is 60% to 70%. Local companies are “cherry-picking the best talent,” says by a managing partner for a headhunting company.

Managers say working for local companies lets them take on more responsibility and make a greater contribution. That’s what made Wu Xianyong, a 34-year-old native of the southern province of Yunnan, quit flogging Crest toothpaste and Pringles potato chips for Procter & Gamble Co. (PG ). In 2004, after nearly nine years at P&G, he jumped at the chance to serve as vice-president for marketing at Li-Ning, China’s top athletic-shoe maker and sports apparel marketer. He has since taken on oversight of international business as well. “Li-Ning can provide me with a much better platform to play on,” says Wu, who also snagged a 50% raise plus generous stock options. “I’m not just managing a brand. I do sports marketing, events, and PR, and I manage research.” In fact, Li-Ning is chock-full of multinational alums: The vice-president for sales formerly worked at Avon Products Inc. (AVP ), the vice-president for footwear came from Nike Inc. (NKE ), and the chief financial officer left news wire Reuters Group PLC. (RTRSY ).

Much of the shift stems from global aspirations. By hiring execs with experience at multinationals, the Chinese figure, they’ll have a leg up when they go abroad. For instance Gome, China’s No. 2 retailer, has ambitious plans to expand. So in January it recruited Weng Xiangwei, a 37-year-old former vice-president in Morgan Stanley’s mergers-and-acquisitions team, as its strategy chief and financial guru. “When a company grows to a certain size, it needs to think about more than just where to open its next store,” says Weng, a Shanghai native with a PhD in biophysics from the University of California at Berkeley.

Some managers take a pay cut when they jump ship — although stock options often fill in the gap. That trend will accelerate as more private Chinese companies list on overseas stock markets. Deng Kangming, for example, saw his salary drop by 20% when he left his job as head of human resources at Microsoft in Beijing for a similar job at Net auctioneer Alibaba Technology, but he was granted a generous dollop of options. Two years ago, 27-year-old Zhou Donglei took a 35% cut when she left Japan’s Softbank Infrastructure Fund in Beijing to run business development and investor relations at Shanda. “What drew me was the opportunity, definitely not the salary,” says Zhou.

Yet salary can play a role in many searches, especially for sought-after talents such as finance. One veteran of the Bank of China saw his pay jump in just six months from $70,000 to $180,000 after a bidding war broke out for his talents among a foreign bank and two Chinese companies, according to Heidrick & Struggles: The manager ended up as CFO for a local valve maker.

China’s state-owned giants are also likely to pay a premium to woo talent. For instance, Ping An Insurance Group, China’s second-largest life insurer, has hired managers away from Canadian Imperial Bank of Commerce and American International Group — often upping their pay by as much as 50%. Ping An just hired a manager with five years of experience at an international bank for $65,000 per year — a huge sum in China, and 40% more than he was making at his old job.

Most telling of all, Chinese companies are even starting to look overseas for talent. Michael Zhang, a 37-year-old native of Sichuan province, worked for four years at medical device maker Guidant Corp. (GDT ) before being recruited as CEO of Microport Medical (Shanghai) Co., which makes stents used in unblocking arteries. He, in turn, hired 33-year-old Zhao Ruilin, who had joined rival device-maker Medtronic Inc. (MDT ) in Minneapolis after earning a PhD from a Harvard University/Massachusetts Institute of Technology joint program in health sciences and technology, as well as an MBA from the Wharton School. Zhao now serves as Microport’s vice-president for business development and strategic planning. He earns just $60,000 — a bit more than half what he made at Medtronic, though he also gets free housing. Still, he says, the greater responsibilities he has, coupled with Microport’s hypergrowth — sales this year are expected to triple, to $30 million — make up for the pay cut. “Working for this company is so much fun,” Zhao says. “Now I’m interacting with bankers, private equity shops, lawyers, and accountants.”

The drive for talent by China’s best companies feeds into the boom for middle and upper managers at both multinationals and local firms. One recruiter estimates managing directors at Chinese state-owned companies can earn up to $300,000 a year plus a car and housing, while middle managers with the right skills pull down $70,000 or more. Annual raises of about 13% to 14% are necessary to hold on to employees, while poachers offer pay jumps of 20% to 30%, according to Hong Kong recruiting firm Bo Le Associates. “For mid-level management, the market is really hot,” says Bo Le managing director Louisa Wong Rousseau.

And don’t expect things to cool off anytime soon. China will need 75,000 globally capable execs in the next five years but has fewer than 5,000 today, estimates McKinsey. As long as multinationals in China train locals to run their operations, there’s likely to be no shortage of mainland rivals eager to snatch them away.

China Staff hiring: Passion is key!

(China Daily)

While the international hotel giants battle to expand their empires in China and mull over branding and marketing strategies, there is something critical they can never ignore – staff.

“Talents are given priority in Marriott, their potential, loyalty, interest and team spirit matters,” says J. Willard Marriott, the founder of US-based Marriott International. “Take good care of your associates and they will take good care of customers, who will then return.”

As one of the leading international hotel groups, Marriott began operations in China in 1989. Now, its local presence is represented by 26 hotels, and by 2008, the portfolio will grow to 35.

Marriott is not alone in its rapid growth. By 2008, Shangri-La Hotels and Resorts, Asia-Pacific’s leading luxury hotel group, will add 17 more to its local list which already numbers 19; UK-based InterContinental Hotel Group (IHG), a worldwide hotel group, has a portfolio of 51 hotels, and plans to develop 74 more by 2008. Ritz-Carlton Hotel Company, the world’s leading high-end hotel brand, plans to have nine projects by 2009.

The aggressive expansion can be attributed to the upcoming 2008 Beijing Olympics and the development of China’s economy.

“But how to attract and retain staff remains a pressing task,” says Michael Malik, general manager with Beijing Marriott Hotel West, considered one of the best hotels in the Marriott chain.

Generally, academic credentials, work experience and English skills are the basic requirements on hotel recruitment lists. However, for most hotels, there are two things even more important personality and potential.

“We hire people for their attitudes,” Malik says. “Passion is the key.”

The recruitment policy of Portman Ritz-Carlton Shanghai (PRC), which has been ranked as the best employer in Asia and China for three consecutive years by Hewitt Associates, is simple. “We only get highly-talented people,” says Ralph Grippo, vice-president area general manager.

The group has developed a quality selection process known across the world when recruiting staff, to test whether candidates fit its culture. “It really works and helps us find suitable staff,” says Grippo.

Usually, high-level management aside, most hotel employees are local. The sources are various, including graduates from hotel-related training schools, talents from other industries or hotels, and internal recommendation.

At PRC, people through recommendation from its own staff compose the major source, accounting for 50 per cent of its total workforce.

“It is an efficient way, as our staff know who would be the most appropriate for PRC, and we reward those who succeed in any matchmaking with 500 yuan (US$62),” says Grippo.

Germany-based Kempinski looks for graduates majoring in hotel management abroad, such as France and the UK. “They have better English skills and more knowledge about Western nations,” says Li Bo, deputy managing director with Kempinski Hotel Beijing.

However, some people’s wariness of working in the hospitality industry remains a stumbling block to recruitment.

“Some people don’t think highly of hospitality they believe they need to work longer and harder in hotels than in other jobs,” says Winnie N.G, director of human resources at IHG China.

As more hotel groups expand into China’s secondary cities, recruiting suitable employees in the smaller cities is not as easy as it is in Beijing and Shanghai, she adds.

Getting the right person is the first step, but it all proves futile in the end if hotels fail to treat them properly.

Employment turnover is a reflection of whether hotels have done a good job in retaining staff. In Beijing and Shanghai’s four and five-star hotels, the average turnover is above 30 per cent.

“PRC enjoys the lowest turnover of 17 per cent annually,” says Grippo.

Hotels use a number of methods to achieve a lower turnover.

For Malik, the main one is to engage with workers and seek their opinions.

Staff, except for those at management level, annually receive a questionnaire on how they feel about their benefits, managers and salary. A third party from the US then conducts all-round analysis and eventually presents a final report, indicating how employees rate the general managers and whether they are doing a good job.

“This is successful, and shows Marriott shares everything with associates and is proud to gain satisfaction from them,” says Malik.

Cheong Waimeng, director of human resources with Grand Hyatt Beijing, says: “We listen to workers’ opinions, making them feel they are part of the Hyatt family, instead of just being labour.”

For international hotel group giants, being a powerful brand helps a lot. “A brand is in itself advertising, and can attract people automatically,” says Malik.

“A strong employer brand encourages people to stay with us,” agrees Winnie N.G. IHG often conducts brand promotions in China’s major universities, gaining more access to potential candidates.

Training and appropriate rewards are also important tools to help people stay.

But training is not only time-consuming but also expensive. Grand Hyatt Beijing under Hyatt International Corporation annually invests 800,000-1 million yuan (US$97,561-121,951) in training. At Kempinski Beijing, training costs account for 2.5 per cent of revenue. PRC Shanghai puts 1 million yuan (US$121,951) into training every year. Staff at all levels in Marriott can get 40 hours of training.

Cross-department training is an especially powerful method for the international hotel groups. Thanks to their huge networks, staff can be transferred to different departments or hotels within the chain, which can help them to realize their full potential and creates opportunities for promotion.

At IHG, the Assessment Centre Programme aims to provide a talent pool of potential candidates for promotion. “This is a good way to retain,” says Winnie N.G.

As for rewards, different hotels have different ideas.

Those who get annual best-performance certificates at PRC can bring their families to have a free dinner in the hotel. Every three months, the best five staff over the period are also given cash bonuses.

At Kempinski, monthly and annually-rated best staff get the chance to study or travel abroad for free.

“To become the best hotel, we will stick to the principle of taking care of our associates, handed down by Marriot’s founder,” says Malik. “We know the hotel would be in great trouble if our associates such as chefs and cleaners cannot come to work.”

China Data: Human Resources

China Business Review recently published a HR data sheet, you can download from here. Inside, you will find:

Compensation and turnover statistics, as well as tips for attracting and retaining talent

China’s Tight Talent Market
China Market Movement, 1995-2005
Salary Increase Rate by Job Level in First Tier Cities, 2005
Average Salary Increase by City, 2005
Salary by Exptriate Type, 2005
Total Cash Composition by Expatriate Type, 2005
Supplementary Benefits Practices among Foreign-Invested Enterprises, 2005
Employee Turnover Rate, 2001-05
Turnover Rate by Staff Type April 2004-March 2005
Why Employees Leave, 2005
Why Employees Stay, 2005

Tips for Attracting and Retaining Talent
Pitfalls in Talent Acquisition in China

www.chinabusinessreview.com

Retaining Chinese Employees

“How do you keep and maintain a stable and qualified workforce?” asked one expatriate general manager, citing his prime concerns for the joint venture he runs. “How can we attract and retain workers with new ideas?”

If these questions are prime concerns for a general manager, they dominate the working lives of human resources (HR) professionals. The three basic tasks of HR managers — recruitment (see Recruiting the Right People), retention, and compensation and benefits (CnB) — are as fundamental in China as anywhere. But HR managers in foreign-invested enterprises (FIEs) in China have had to devise creative ways to carry them out to remain competitive in China’s tight market for local managerial talent.

Retention in particular is the lynchpin of a company’s HR strategy and is crucial to building an effective workforce and a thriving business. It is vital to short- and long-term stability, efficient day-to-day functioning, and the achievement of long-term goals such as localization — the replacement of expatriates with local Chinese managers.

Career development and other concrete retention tools

Career development programs are key retention tools that may seem nebulous but are concrete in any company able to keep its best managers; in a Korn Ferry International study conducted in Beijing in early 2001, it ranked first on local managers’ lists of concerns.

“Career development is very important,” said one HR manager. “But usually the bigger the organization, the less attention is given to certain personnel. They start to feel neglected. Usually the biggest problem is with mid-level personnel — they are the biggest group you really want to retain.”

For many young Chinese managers, career development is a new and alien concept, and both manager and company benefit from regularly investing time and effort in it. The most effective career development plans are tailored to individuals. Just notifying employees that they have a lot of potential and will receive special training and attention is a valuable retention tool in itself.

Successful plans also spell out exactly how employees can fulfill the ambitions the company has for them. Vague assertions such as “I want you to be regional general manager in two years” won’t work, for instance. Instead, the company must tell targeted employees what it will do to support them in attaining such goals. The company must also provide regular feedback, from multiple sources, as to the progress employees are making toward their goals. The goals should be reachable but also challenging. Many HR managers argue that it is better to promote people before they are ready and give them the additional support they need in a new position than to wait until they are past ready, and perhaps getting restless.

Other elements of a sincere career development program for higher-echelon managers are training and overseas assignments. Several HR managers from US multinationals mentioned the HSBC training program as a comprehensive retention model. The program includes 10 weeks of training in Britain for new managers, with fol low-up training in Hong Kong over a three-year period. HSBC gives participants bonuses, spread out over a year, after they complete the program and return to China. HSBC also offers these employees the opportunity to borrow money to purchase homes at below-market interest rates.

“This is very good,” enthused one HR manager at a US oil company. “Everybody will want to be one of their trainees. It will make them think that the company really cares about them — they won’t want to leave.”

One US multinational with significant investments in China tracks employees with high potential by periodically evaluating them on the basis of job accomplishment, education, performance, competency, and the like. If they are performing well, they are given a three-month “professional development assignment” in an overseas office. The same multinational runs a second, longer program for promising Chinese managers that involves support for the development of a close working relationship with an expatriate in China and one or two years of work in an overseas offi ce.

Looking ahead, both Watson Wyatt Worldwide and Korn Ferry predict an increase in “personalized” retention efforts that include tailored employment packages, since what will retain different people varies greatly by age, gender, position, and personality, among other factors. To keep the packages fair and manageable, companies usually allocate them by grade levels. Executive MBAs are usually the major retention tool that companies give out exclusively on an individual basis. Designing and maintaining such tailored packages takes significant effort, but can save resources in the long run by keeping people with the company.

A look at the package

Last but not least of the tangible retention tools is, of course, financial compensation. The compensation portion of C&B includes salary, bonuses, stock options, incentive schemes, and deferred compensation plans. Competitive compensation is simply an assumed component of both recruitment and retention — to attract and retain the best workers, every company has to be within the same salary range. But competitive financial compensation is an effective retention tool only when used in combination with many other tangible — and intangible — retention techniques. High salary alone is simply not enough to retain employees in the increasingly sophisticated Chinese job market.

A joint venture is likely to offer lower salaries and higher non-cash benefits than a wholly foreign-owned enterprise (WFOE) because of the influence of the Chinese partner, which is accustomed to this compensation structure (see Human resources and the Transition to Sole Foreign Ownership). Indeed, even in a WFOE, the benefits side of the C&B package for Chinese employees is much more than the faithful administration of insurance and other miscellaneous benefits regardless of investment structure. Joint ventures and WFOEs alike have to abide by all the statutory regulations concerning social insurance, whereas representative offices pay the Foreign Enterprise Service Corp. (FESCO) or a similar employment agency, which is then supposed to take care of their employees’ social insurance needs.

Companies must clearly articulate each and every C&B package and explain its benefits to recruits and current employees alike. Some HR departments make the mistake of assuming that employees read and understand the various e-mails or notices they send out regarding benefits. In fact, many young people, in particular, are so focused on cash that the mere mention of a pension fund is likely to make their eyes glaze over. A growing number of HR departments thus teach employees about the various aspects of compensation and explain, for instance, how the employee will ultimately benefit more from a total compensation package than from a package that is solely or primarily cash based. These HR departments also explain the company’s own reasons for preferring a total compensation philosophy. Some comparison to compensation packages at other companies in the industry is useful as a frame of reference, particularly given the fact that salary and benefits information is widely shared in China. C&B packages are likely to be complicated and continue to evolve, requiring creativity and responsiveness on the part of their designers and administrators.

Compensation

Some parts of a compensation package are more effective than others in retaining employees.

• Salary
  Salary, of course, is the portion of the compensation package to which employees look first. Salary levels vary substantially by region, company, position, and investment type, but representative office salaries are generally the highest and joint-venture salaries the lowest. Salary surveys are conducted regularly in major cities by management consulting, HR, and other organizations.

  Compensation naturally differs from place to place since the cost of living varies so much from a coastal city like Shanghai to an interior city such as Xi’an, Shaanxi Province, not to mention smaller, third-tier cities like Xuzhou, Jiangsu Province. Most companies either abide by the local market when setting salaries or establish a general compensation and pay structure that carves China into first-, second-, and third-tier cities. Under this system, workers in a first-tier city would receive 100 percent of the salary scale while those in a second-tier city would get 80 percent and those in a third-tier city, 60 percent.

  One aspect of salary about which it is possible to generalize is salary inflation, the bane of FIEs. Salary inflation ran at nearly 30 percent in the mid-1990s but leveled off considerably during the deflationary period at the end of the decade. Salaries are once again on the rise, however, and companies are likely to be grappling with the trend for the foreseeable future. Watson Wyatt estimates that salary increases in 2001 will hit 7.5-8 percent, much higher than the economy’s current inflation rate of 1.2 percent. Indeed, the company’s annual salary survey already shows that salaries are up in 2001, with the highest salaries in Beijing, Shanghai, and in Guangzhou and Shenzhen, Guangdong Province. The highest paid positions generally fall into the categories of information technology, sales, marketing, and finance. Staving off salary increases is an uphill battle, one that can be won only through comprehensive benefits, generous incentives, and a work environment that is both challenging and supportive enough that your best employees simply don’t want to leave.

  A final salary trend worth noting is a move toward decentralized payment decisions that give individual business units more authority and flexibility in determining employee salaries. This more flexible approach is being applied to both direct and variable pay and can be seen as part of the move toward individualizing compensation packages.

• Bonuses
  A movement is currently under way to tie many aspects of compensation to performance as an incentive for employees to meet certain goals. Getting employees to accept performance-based compensation has not been easy, since bonuses in the PRC have long been viewed as entitlements rather than as true rewards for individual or company achievement. As companies gradually ratchet up the percentage of compensation tied to performance, however, employees are adapting. In areas such as sales, bonuses are particularly effective and are sometimes tied to additional incentives, such as even higher bonuses if the sales manager is able to collect cash on delivery. Other companies have introduced bonus schemes to reward employee s if they come up with creative ideas to reduce costs, improve safety conditions, or increase efficiency.
• Stock options
  Even before the international markets began their decline last year, most HR managers argued that the jury was still out when it came to evaluating the effectiveness of stock options. Options were perceived as useful in high-technology firms whose stock prices were skyrocketing. Unsurprisingly, the recent steep declines have been accompanied by a diminished enthusiasm about the value of stock options in retaining employees.

  “Stock options don’t really work with young people,” explained one HR manager. “Saying we’ll give it to you in five years doesn’t fly. They want options and cash.” Ongoing education about the value of stock options will likely increase their usefulness as a retention tool, particularly in the case of employees who have remained with a company for a few years and have seen the value of their stocks appreciate.
  Their efficacy as a retention tool aside, stock options increasingly form part of compensation packages at major multinationals. Corporate policy often dictates who receives stock options; in some companies all employees get options, no matter their level, while in other companies options are reserved for upper-level management. Most companies that give options award them according to position and performance.

  Awarding stock options to Chinese employees is complicated since foreign exchange restrictions prohibit PRC citizens from owning stocks listed overseas. However, companies have devised ways to issue stock shares to Chinese employees while technically abiding by PRC law. Under most plans — usually called “shadow” or “phantom” stock plans — employees never actually take possession of the stock and do not legally own it. Instead, the company issues employees a letter confirming the number of shares and the prices at which they were issued. The stocks are held in the United States, perhaps by a professional broker. After a specified vesting period, if employees should choose to cash in their options, the company or broker makes the transaction on the ir behalf and the company gives them the renminbi equivalent of profits from the sale. Taxes are deducted before employees receive the money and paid to the local tax bureau at a rate negotiated by the company.

• Golden handcuffs
  Golden handcuffs, or deferred compensation plans, are financial incentives given to employees if they stay with the company for a contractually specified length of time, such as an extra year’s salary after two years of employment. A few companies also extend golden handcuffs to employees who leave to earn an advanced degree at a top international university. The reasoning here is that no retention package can compete with a Harvard MBA, and young employees should not be discouraged from pursuing higher education. Rather than try to stop them, companies offer support by promising to reimburse their tuition if they return to the company for a specified number of years after completing their degree. This is a relatively new policy at most co mpanies and its effectiveness in bringing people back has yet to be measured. Other companies try to combat the problem of losing valued young managers to overseas study by sending them to school themselves, at established company programs or at universities with which the company has made special arrangements.
• Iron handcuffs
  Iron handcuffs are punitive fines levied on employees if they leave before their contracts expire. The terms of iron handcuffs are included in labor contracts or in training agreements appended to labor contracts. For instance, a company might require managers embarking on extended overseas training assignments to agree to reimburse the company for the cost of the training should they leave before the contract expires or, in the case of open contracts, before a specified amount of time. Or, a company that has helped employees obtain mortgages and is paying the interest may require them to repay the interest, plus penalty, if they leave the company before th e contract expires.

  The enforceability of such agreements used to be a major question but most HR managers report that in cities such as Beijing, Shanghai, and Guangzhou, employees are generally willing to abide by the terms, albeit with a bit of negotiation over, for instance, the amount of time they are given to reimburse funds or pay penalties. “If they refuse to [abide by the terms] you take them to court,” explained one HR manager. “But usually they won’t do this, they will — pay it will influence their future if they don’t.”

• Other incentives
  Incentive schemes are generally designed to spur productivity and encourage employees to remain with the company. They may involve cash, savings plans, travel, gift certificates, or in-kind rewards and may be given for anything from exceeding a sales target to coming up with a creative idea to working well as a team member. Incentive schemes that work best involve recognition as well as rewards and are tailored to individual preferences. Some HR managers tie the plans to business goals and design them i n consultation with the company’s business units.

Benefits

Although employees may not consider benefits to be a significant part of their total compensation, at a joint venture or a WFOE they may add up to as much as 50-70 percent of salary. Benefits are lower at representative offices, partly because their pay scales tend to be higher. At a state-owned enterprise (SOE), on the other hand, non-cash benefits may be triple an employee’s cash compensation. Benefits can be divided into two categories: social benefits and commercial benefits.

• Social benefits
  Social benefits consist of government-mandated payments into the government-run social insurance funds that currently include housing, pension, medical, unemployment, accident/disability, and maternity (see The CBR , May-June 2001, p.18). Regulations governing these funds, which were started on a local basis in 1995, vary widely from city to city, creating nightmares for HR and payroll divisions. Though the funds were created to alleviate the social welfare burden borne by enterprises, in reality most money for the new funds still comes from enterprises, with FIEs contributing a disproportionately high share. Contributions to the funds are split between employer and employee, with the local government setting the contribution percentages as well as the wage floors and ceilings upon which contribution levels are based. Many localities are phasing in contributions and will raise them in small increments every few years until they reach a final percentage.

  In Shanghai, for example, companies and employees each pay a percentage of their salary — with contribution percentages based on 300 percent of the average local wage — into four funds, with 7 percent from each going to housing, 2 percent from each going to medical, and 1 percent from each going to unemployment. Employees in Shanghai currently pay 6 percent into the pension fund; employers pay 25.5 percent. All of the individual’s contribution goes into an individu al account, which receives 11 percent of the total contribution. The corporate contribution is scheduled to decline as the individual contribution rises to 8 percent. The remainder of the corporate contribution goes into a social pooling fund. Employees’ contributions to the funds are deducted from their taxable income.

  Pension funds, which place the largest burden on both employers and employees, are supposed to be unified nationwide, and the individual accounts are intended to be transferable should an account holder move to another city. Unification of the many local regulations has proved extremely difficult, however. Also, there is considerable question about the mobility of these funds, which in fact are simply numbers on paper, as the actual contributions are funding payments to today’s retirees. As a result, some FIEs in Shanghai supplement pension funds with additional contributions or insurance. For example, one major US company in Shanghai contributes to its employees’ pension funds based on their true salaries rather than the 300 percent of average monthly wage that the government requires. This extra contribution — 25.5 percent of the difference between 300 percent of average wage and the emplo yee’s true salary — goes into the employee’s individual account. However, a portion of this difference is actually taken by the Shanghai government and put into the pooled fund rather than the employee’s individual account; the government announces the percentage it will take only at year’s end.
  “They say that if you want to do more for your employees, you have to do more for the government, too,” explained the HR director at the company with this scheme.

  This company offers life, accident, and hospitalization insurance to employees as supplementary benefits, with life insurance equal to 52 times the employee’s monthly salary. The firm also provides travel insurance, but only for business trips. Some companies put an additional percentage of the employee’s salary into the housing fund, rather than just the mandated 6 percent.

• Commercial benefits
  HR managers design many commercial benefits perks to retain valued employees. Like compensation, benefits packages for senior managers are complicated and spread out over a period of time to encourage them to stay. Commercial benefits may include housing plans or mortgage assistance, including loans or the payment of interest on bank loans; car plans; additional accident and medical benefits, including partial coverage for one child; supplementary pension plans; child care and elder care; cell phones; health club memberships; extra vacation time; and tuition assistance programs.

  Commercial benefits programs tend to change with China’s evolving economy and to follow social trends. Five years ago, purchasing a home was still a difficult enough endeavor that many companies offered extensive housing plans to senior managers, and some even built homes and sold them to employees at highly preferential rates. In the past two years, however, the stock of housing available for purchase in major cities has increased considerably, and banks have begun to make mortgage loans to individual buyers. Housing plans now more frequently take the form of mortgage assistance programs.

Important intangibles

Though all companies grapple with the retention issue using more or less the same set of tools, some are consistently more successful at it. The reasons cannot always be fully explained; one company may lose valued workers even while another retains them with a virtually identical C&B package. The reasons why may have much to do with intangible factors.

• Identifying retention goals
  At the top of the list of intangibles is how a company defines highly valued employees and subsequently determines its retention goals. Turnover is inevitable; companies that acknowledge this are least likely to suffer seriously when it happens. Indeed, the best way to avoid turnover is by anticipating and planning for it. Rather than trying to keep everyone equally happy, a company must target those employees who are most essential to its current functioning and future growth. While doing everything within reason to retain targeted employees, companies should keep possible successors in the p ipeline.

  Companies that suffer from high turnover rates should not let the fear that they have become virtual training schools for other FIEs limit development programs that could ultimately help with retention. “There will always be people who leave; that’s life, you have to deal with it,” summed up one HR manager. “You still have to train.”

• Managing employee expectations
  Just as a company must honestly evaluate its own expectations when it comes to retention, so must it manage the expectations of its employees. Though it is important to keep people motivated and enthusiastic, it is equally important to dispel unrealistic expectations for fast promotion or rapidly increasing responsibility. And, just as employees need honest evaluations of their probable paths in the company, so do they need to have a sense of the company’s own growth plans and goals.

  The importance that personal relationships play in retention in China should not be underes timated. Indeed, the Korn Ferry study mentioned above found that local managers listed relationships with their bosses second behind career development in a list of factors motivating them, more important even than salary.

  As the HR manager of one major US multinational explained it, “The personal relationship of the manager and employee is very important. The sense of loyalty is to the person — the company is nothing, it’s a building. You need to move beyond work, to family. You have to invest some time in getting to know your employees.” This opinion was echoed by another HR director who noted, “Superiors are very important. Most people leave companies because they lose confidence or interest in their boss.”

  Employees who feel personally appreciated, respected, and cared for by their superiors are far more likely to stick with a job than those who do not. HR managers repeatedly stress that bosses must strive to show interest in and concern for their employees by asking after their families, organizing and participating in company outings and other social activities, visiting staff when they are sick, and expressing concern in other ways. This personal interest must start from the general manager and radiate down through the various levels of management. Naturally, the more genuine the interest and concern, the more effective it is likely to be, but even just going through the motions is better than ignoring this basic desire to humanize a corporate relationship.

• Welcoming newcomers
  One of the most important elements in a company’s retention strategy is a commitment to ensure that the newcomers feel welcome. “Companies should pay more attention to bringing people into the organization,” says Helen Tantau of Korn Ferry. “It’s like a guest coming to your home, you need to take care of them from the beginning. Help them settle in, find their feet, see where they are going.”

  The FIE environment is demanding for all concerned, but the effort it takes to integrate new employees — especially managers — into the company will be worthwhile in the long run. A smooth start and a thorough introduction to the workings and goals of the company can help make new employees feel like valued team members, encourage them in their work, and build their loyalty to their new company.

Some retention tools straddle the line between tangible and intangible. These include autonomy, empowerment, recognition, and credit. Upper-level managers are far more likely to stay if they are given the independence they need to make a mark and if they receive public recognition for their successes. Firms should also make clear to everyone that top-level Chinese managers will have the opportunity to move on to senior management positions; if a glass ceiling seems to exist, with all of the top positions staffed by expatriates, the turnover rate is likely to be higher. One way of making the possibility of promotion clear is to identify high-potential employee s and put them on an accelerated career track. Another, of course, is to staff top positions with local managers.

Measuring effectiveness
One aspect of retention policy that should be tangible — but often isn’t — is the success or failure of various retention tools. Most companies can quote their turnover rate in an instant, but have a much harder time explaining why turnover continues at that rate or how retention tactics affect it. Since companies invest a considerable amount of time and money in retention tools, an analysis of their effectiveness is certainly worth the effort. Of course, when conducting an analysis, companies must consider such factors as the age of their workforce and the structure of the company. FIEs that hire a large percentage of recent college graduates will inevitably have a higher turnover rate than those that employ more people in their 30s or 40s. Similarly, FIEs that have flat organizations in China will have higher turnover rates than those that have deeper hierarchies and more opportunities for promotion.

HR bread and butter
For the near future, China will suffer a dearth of educated, experienced, and self-motivated men and women capable of managing in a global economy. Competition to hire managers with the most desirable qualifications therefore will remain stiff, with pervasive poaching, salary inflation, and localization efforts hobbled by problems with recruitment and retention. While China’s impending WTO entry will eventually benefit HR development, in the short term the arrival of new foreign companies into the China market will likely heighten rivalry among FIEs to attract and retain talented and experienced managers. Finding, retaining, compensating, and training workers will thus still be the bread-and-butter work of most HR departments in foreign firms in China.

Sheila Melvin
http://www.chinabusinessreview.com/public/0111/melvin.html

Recruiting in China: what to expect

China is hot — but starting operations in a new market is not easy. Will you move your own people to the new location or will you start hiring locally? And if you hire locally, how do you attract the best candidates and what do these new recruits expect? Nannette Ripmeester reports.

Kevin Ng, Partner at the Beijing office of Deloitte, is clear about the type of graduates Deloitte targets. “We will only approach the first-tier universities in China to be assured of quality graduates,” he says. “We conduct campus recruitment to introduce our firm and the attributes of graduates we are looking for.”

University ranking is extremely important in China and is directly related to salary expectations. Graduates from the top universities can command much higher salaries in comparison to the rest of the graduate market.

A survey by the Shanghai Labour and Social Security Bureau conducted in 2003 showed most fresh university graduates in Shanghai earn a monthly salary of between 1,500 Yuan Renminbi (abr. Yuan) and 2,500 Yuan — the city’s average is 1,100 Yuan.

Only 1 percent of graduates earn top salaries — they earn between four to six times as much as the rest. Even though there is a wide difference between salaries and graduates from less prestigious universities are expect much lower salaries, Deloitte only targets the absolute top students.

“We make use of various methods such as written tests, group discussion and one-to-one interviews to assess the quality of the graduates. For us technical competence is less important, we focus on their personality,” says Kevin Ng.

ICI has taken a slightly different approach. “We have initially focussed our attention on Chinese nationals studying in Europe. Only now we are going to market on-campus in China as well,” says Esther Penketh, who is a member of the international recruitment team at ICI, based in the UK.

“Our first experiences in China have made us realise that it works best if we give prospective candidates more information upfront on how to approach the selection process,” says Penketh.

“We tell them what we are looking for with regard to the on-line application, the telephone interview and the competencies we seek. Being very clear about the package on offer is also essential,” she says.

Kevin Ng agrees how essential it is to invest time and energy before starting to recruit in China: “Market intelligence is essential, be patient and diligent in hiring the right candidate — because it can be quite painful to dismiss a person in China!”

The following information is useful when dealing with the application process in China.

The application letter

For Chinese graduates an application letter, or cover letter, is not customary. They are more used to application forms.

The curriculum vitae

The Chinese do not use the term CV, but resume. Usually this document lists their education and experience in a very detailed manner.

In China it is not unusual to see a resume of more than two pages. The resume is usually typed, but hand-written documents are still surprisingly common.

Chinese resumes are usually set in a reverse-chronological order, listing the most recent first. Education plays a prominent role and references are not by standard included.

The Job interview

The Chinese are very modest people, and do not like to show off, or over-impress others. Be aware that it might not be easy to get through to a Chinese candidate at a certain level as they are educated to behave in a self-effacing manner.

Here are some facts based on the most recently published data (June 2004):

• Last year, Chinese university graduates faced difficulties in finding a job.
• This year, the job market seems even more disappointing for them – the starting salaries for university graduates in 2004 dropped between 25 to 30 percent, compared with last year.
• The average starting salaries of university graduates is 1,500RMB/month.
• Foreign invested enterprises (FIE) pay the highest salaries.
• Average salaries of governmental bureaus are 1516.7RMB/month.
• Average salaries of state owned enterprises are 1508.1RMB/month.
• Average salaries of foreign invested/owned enterprises are 2040RMB/month.
• Having an academic degree plays an important role in starting salaries;
• College (three-year professional education): 1300RMB/month
• University (four-year academic university): 1500RMB/month
• Postgraduates (Master degree): 3000RMB/month
• Those who graduated from famous universities (with a good ranking) earn 400RMB a month more on average than others from less prestigious universities.