How to get to grips with the dragon
China’s ultimate evolution as a fully-formed commercial market has been fuelling many pound and dollar-filled fantasies ever since the country opened its doors to foreign investment.
But while numerous Western companies have already set up shop in the world’s most populous country, employment issues continue to puzzle and confound many a corporate transplant, and none more so than than the issue of recruitment.
Recruiters who expect to do business in China will need to adopt a new mindset about pay and benefits packages, social concerns, status issues and even old national rivalries as local values colour candidates’ perspectives about job opportunities.
Students are sought after
The UK provides fertile ground for recruiting educated Chinese who plan to return to their homeland, says Ting Zhang, chief executive of Cambridge-based China Business Solutions (CBS). As many as 50,000 students from China are currently studying in the UK. Recruiting a UK-educated Chinese person for a job with a UK company operating in China will generally mean getting a person who speaks good English and is familiar with British culture.
Employment costs are typically 30-50% higher in China’s coastal area, where many of the major cities are located, than in its inland regions. But with mid-level engineers only earning an estimated £400 per month in coastal regions, pay levels are generally lower in China than in the UK. However, companies should expect to pay 13-month salaries, annual increases of 8-10%, and up to 50% of a person’s salary in benefits, says Ling Ling Bravo-Escos, also of CBS.
Since the 1990s, social insurance benefits will include money for housing (to buy, renovate or build a house), pension, medical and heating, among others.
The ‘one child per household’ rule in mainland China also means a special consideration for women employees where time off is concerned. As well as maternity leave, women also must be given time off to end pregnancies, Bravo-Escos says.
To recruit top candidates, the points having most impact, according to CBS, are a company’s brand and local awareness of that brand, the job description, job title, a pleasant working environment, a competitive salary and benefits. High emphasis is also placed on long-term career opportunities.
That emphasis on the long-term means that permanent work is still the favoured form of employment in China. Contracting as an employment choice has yet to catch on, says Patricia Leech, sales director for SAP recruitment specialist Portland Resourcing, London.
Foreign contractors
Leech says that most of the contractors her company recruits to work on multinational projects in China come from Malaysia and Australia. So far, the company has recruited but one local hire, for the position of functional team lead consultant.
One unique aspect Leech has discovered to recruiting in the Chinese marketplace is the strength of consultant networks. “Consultants’ networks are very strong,” she says. “What you tend to find is that they’re all asking each other if they know someone for a particular job.”
Lacking in market awareness
She has also found a certain naivete among local candidates as to their market worth. “People within China aren’t aware of what they could be getting. They aren’t very savvy to the market,” she says.
The world of online recruitment in China is growing steadily but online analysts believe the market is still years off achieving its full potential. US job board operator CareerBuilder.com last month signed an exclusive agreement with Chinese job board www.51job.com that will give the US operator access to the Chinese online recruitment market.
The American giant has begun to expand its global reach with its own country-specific job boards, but company leaders felt that the Chinese market has not yet evolved sufficiently to install its own branded site. CareerBuilder wanted entry to China, nevertheless.
“We spent the last year looking at the Chinese marketplace,” says Farhan Yasin, president of CareerBuilder’s international group. “Our estimate is that online recruitment there is worth $150m, and it’s growing at 43-48% a year.”
The greatest hurdle in China, Yasin told Recruiter, is “first and foremost, the country’s infrastructure”. While major cities have embraced the internet, most Chinese live in rural areas where internet access may be limited.
It’s a cliche that China’s economic potential is as vast as its landscape. But equally as vast as the landscape is the labyrinth of cultural idiosyncrasies, regulation and growth challenges that will require years of manoeuvring and optimising before China’s economic potential can be realised.