China 2012 Hiring Trends

The internationalization of China’s economy means that both Chinese and foreign companies will be competing for top talent in 2012. The labor market is expected to be tighter than before the Global Financial Crisis.

The growing sophistication of the Chinese economy is reflected in its proactive export strategy, the easing of acquisition restrictions and increased Chinese overseas investment. For example, Chery, China’s leading private automaker, exported a record number of vehicles in 2011, while Nestlé’s recent acquisition of Hsu Fu Chi International Foods for USD $1.7 billion reflects a softening of government acquisition policy since Coca Cola failed to buy Huiyuan in 2009. Meanwhile China has received attention for recent foreign investments like U.S. oil shale projects.

As a result of the broadening of the economy, hiring managers will find that the stakes in the “War for Talent” rising this year.

Demand for Global-Minded Leadership: Managers with the demonstrated ability to lead and grow businesses in China and Asia are precious. Globally-minded General Managers, Human Resources, Finance and Sales and Marketing professionals at the Director level and above who understand how to develop and implement successful business strategies based on corporate objectives are in demand.

Increased competition from Chinese companies for talent – not necessarily at the executive level: Chinese companies are more aggressive about hiring graduating students and employers at entry and supervisor levels. These days, Chinese companies are offering packages and promotion opportunities to entry-level graduates that are as compelling as those offered by MNCs.

Sector Trends: The job markets in Healthcare, Life Sciences, Industrial, Automotive, FMCG and Entertainment continue to grow at a rapid pace. The Financial Services sector is not as robust and may undergo lay-offs. Some MNC insurance companies have withdrawn from China because of the onerous regulatory environment. Businesses dependent on China’s investment in construction and infrastructure may slow. The Chinese government instituted measures to lower housing prices and is expected to re-allocate spending from infrastructure to health and education this year.

Compensation Benchmarking: CFO Packages in Asia

Season's Greetings from DHR International Shanghai!

From l to r: Joy Han, Charlotte Xiang, Wanshu Wang, David Nagy, Janet Cheng, Aurora Song, Eric Dieny, Lucy Shi, Kay Chen, Beryl Chu, Alexandra Hendrickson, Helen Kwok. Missing: Wendy Shou, Johnny Tan, Derek Hu.

What Counts as "Diversity" in Asia?

Kitty Vorisek, Executive Vice President in DHR International’s Beijing office, specializes in Diversity and Corporate Responsibility. Recently she shared with me some of her insights about MNC diversity objectives in Asia.

 

What counts as “diversity” in Asia?
Companies view gender diversity as important because globally women control purchasing decisions for products. Companies are also focused on generational diversity to integrate and leverage across all employees. Older employees teach institutional knowledge and Generation Ys bring fresh perspectives, different communication styles and career expectations. Companies like Proctor and Gamble find diverse teams to spark innovation.
When there is a “war for talent,” how is it possible to specify female, highly-qualified individuals? Isn’t this one requirement too many?
In China there are actually more women managers than in other countries; 34% female senior managers compared to 20% in the rest of the world. To attract women, management adopts recruiting and retention tactics supportive of women. For example, flexible family healthcare benefits, flexible work schedules, mentors and coaches. Among women under 40, 69% are the first in their immediate family to graduate from university. Keeping in mind traditional Chinese values is critical, i.e. Chinese women executives travelling alone for business may not be comfortable or appropriate for the individual. Travelling with another woman is better and some MNCs recognize that.
How will employers seek to diversify their workforces in the future?
The next frontier will be expanding employees with (dis)abilities. The Asia Pacific region has 62% (400 million) of all disabled individuals in the world. In China the government obligates companies to have 1.8% disabled in their workforce. Some employers like American Express, some banks and phone companies historically have made efforts to staff their call centers with disabled workers. In some geographic areas, a company may receive government tax incentives for this initiative. The greatest benefit, however, is the resulting increase in productivity. Usually when a disabled person is in a team of able-bodied people, productivity may increase up to 25%. The able-bodied employees are inspired by the achievements of the employee with a (dis)ability.
Do you have any advice for employers trying to increase the diversity of their workforce in China?
Start with your entry level positions and focus your recruiting tactics to support female, cross generational and cross-country of origin hiring.  Male managers have a higher awareness of gender bias if they had a female boss. If they have, they are more likely to have a belief in fair play and see inequalities so they will coach both genders equally in the entry work force.

Compensation Benchmarking: Salary Growth in China
At a US-China Business Council meeting I attended last month, John Haley, CEO of Towers-Watson presented some startling numbers about salary growth in China since 2006. He kindly shared them.

MNCs in Hiring Contest with Chinese Firms

MNC Human Resources executives have been complaining to me recently about competition from Chinese employers, especially at the entry level. “Fresh graduates would always choose a MNC five years ago,” commented on chemicals industry HR Director, ”Now there is not a huge gap between MNC starting salaries and local companies’ salaries.”

In addition to salaries, another impetus is that Chinese graduates do not have to speak English at a Chinese company. Also they do not have to move to another country to rise up the corporate ranks.

Also Talent Acquisition professionals who design university partnership programs to attract Chinese graduates find that Chinese companies now give them a run for their money. “Companies like Sinopec can offer better benefits, more stability and less chance of lay-offs than an MNC.” said one HR consultant, “Plus people can get housing allowances and other entitlements that are not taxable so their effective income is actually higher.” Another advantage, she noted, is that employment at State Owned Enterprises offer candidates the possibility of eventual political power. “People like power so more Chinese graduates are taking the Civil Service Exam.”

What arguments can a MNC offer to counter the siren call of Chinese companies to employees?

• Multinational companies offer international opportunities with travel, overseas postings, greater diversity of work opportunities, greater work flexibility.

• Successful organizations achieve peak performance by developing and adopting global best practices. Graduates who join global companies have the opportunity to learn the processes and practices with which today's companies succeed and grow.

• Better pay as you ascend the career ladder. The compensation gap between Directors, Vice President and above at an MNC and a Chinese company is much larger than at entry levels. MNCs generally still reward senior executives much better.

• MNCs Reward Results: MNC managements tend to be results-driven so the link between hard work and reward are explicit. Compensation and promotion structures are usually directly related to strategic goal achievement rather than to other more subjective criteria.

Compensation Benchmarking:

China Human Resources Directors

Is There a Glass Ceiling for Chinese Executives?

Chinese executives at multinational companies feel left out of Asia strategy-setting and senior level decision making, according to a new study. They often have difficulties feeling at home in their global organizations.

China managers feel sometimes that they are not seen as potential global leaders. They also believe that leadership traits that considered crucial to success in the West are not always natural to Chinese culture. Conversely some Chinese cultural norms like establishing “guanxi” run counter to the policies and procedures of MNCs and may even violate ethics rules. Finally interests like wine tasting and sports that may draw people together in a MNC may not be shared with Chinese.

In the long term, these findings may mean that Western companies find it harder to recruit top China candidates because China managers prefer to work at Chinese companies. Chinese companies may offer more opportunities for leadership, and a more familiar corporate culture where speaking English is not required.

The findings of the study, conducted by Community Business and sponsored by leading multinationals like American Express, PepsiCo, Johnson & Johnson and Shell were presented in Shanghai this spring in a presentation at Linklater’s law firm called “Bringing Out the Best in Asian Talent.” The study makes some common sense recommendations to MNCs:

- Communicate your “hiring brand”: Focus on communicating the long-term stability and future prospects of your organization, your commitment to operating and investing in the Chinese marketplace and your emphasis on individual employee development.
- Localize senior management and develop more Chinese leaders as role models.
Make an effort to create a more inclusive work environment and culturally sensitive networking opportunities. Not everyone plays golf.
- Leave expatriate assignees in place for longer assignments. This will allow Chinese employees to build stronger relationships as well as to benefit from the language and corporate culture training that the expatriate can bring.
- Provide more conferences, travel and long term foreign assignments for Chinese executives to the headquarters country.
- Establish a local presence and relationships with local suppliers, partners and community organizations. Work on building a quasi-local presence that will be respected by Chinese employees and potentially perceived as more domestic in nature.
For more information about the Community Business study, please visit: www.communitybusiness.org. For information about how to find great China managers, please contact me.

Compensation Benchmarking: China Plant Managers

Where Are All the Expat Women?

Human Resources Executive magazine interviewed me recently about executive expat women. Author Jared Shelly addressed the issue of why fewer women are sent on international relocation assignments, Here are excerpts from the article that ran in the print and online editions.

Alexandra Hendrickson is the perfect woman.

She's smart. She's successful. She's driven. She's even lived all over the world.

Perhaps best of all, she's single.

Yes, if you're a relocation executive looking for an employee to send on an international assignment, Hendrickson is, indeed, perfect.

Working as an executive recruiter at DHR International in Pittsburgh, Hendrickson jumped at the chance to move to the robust recruiting market of Shanghai in February 2009 -- and HR jumped at the chance to send her.

And why not? Hendrickson rented her Pittsburgh home, so no need to navigate the tough real-estate market. She already completed relocation assignments in England, Hungary and France, so she certainly had experience living and working in a foreign country.

She also showed considerable interest in moving to China, and had some of her best clients in Shanghai.

Plus, there were no family conflicts holding her back.

"In my case, I was extremely flexible to move, so that made it easier," says Hendrickson.

But is that what it takes to relocate a woman these days? A perfect fit?

It certainly appears so. Companies are sending fewer and fewer women on international assignments than just five years ago. In 2010, women made up just 17 percent of international expatriates, compared to 23 percent in 2005, according to the 2010 Global Relocation Trends Survey by Brookfield Global Relocation Services in Woodridge, Ill. That's the lowest number since 2001, when just 16 percent of international assignees were women.

HR executives, female expats and industry experts pin the falling numbers on a wide range of issues -- from family and spousal concerns to the fact that the economic downturn has led to fewer developmental relocation opportunities for younger women.

They also agree that the lack of women on assignment doesn't just limit the pool of talent sent to other countries; it hurts leadership development and, eventually, leads to a lack of female senior leaders -- since relocation is such a vital developmental tool.

To add more women to the relo ranks, they suggest utilizing spousal-assistance programs, offering more developmental assignments and developing systems to allow employees to make it known that they're interested in relocating internationally.......

Valuable Experience

Refusals from female expats are not the only factors driving the numbers down; companies have also been shying away from sending women abroad. Companies want to send employees overseas who have experience as business managers or who have start-up skills, says Jo Rust, director of international consulting services at Cartus, a Danbury, Conn.-based global relocation-management firm. And that is a demographic still dominated by men, she says.

In fact, just 14.4 percent of executive officer positions were held by women, according to two studies released in December by Catalyst Inc., the New York-based membership organization promoting inclusive workplaces.

Considering that these positions are the ones most likely to be relocated, and there are far fewer women in those positions, it drove the number or women assignees down.

Hendrickson -- the DHR International employee now working in Shanghai -- has been adamant about telling peers (male and female) that there is one sure-fire way to put yourself in line for a relocation assignment -- get into a line-management position.

People who get relocated are "running businesses, growing sales and managing expenses," says Hendrickson, adding that they also tend to be mostly male. "Women tend to be in functional positions, human resources, government affairs or maybe a finance role ... but it's line managers who they send overseas."

That's especially true in today's economy, because developmental assignments are taking a backseat to moves that stem from necessity, says Scott Sullivan, executive vice president of Brookfield Global Relocation Services.....

To read the whole article please go to: http://www.hreonline.com/HRE/story.jsp?storyId=533329676

India Talent: Young Mobile and Hard to Find

Leadership talent in India is in short supply but it can be nurtured and built according to Vikram Chhachhi, DHR Executive Vice President in our New Delhi office. Vikram recently took time to speak about unique aspects of recruiting executives for MNCs in India.

Young and Mobile: India has some exceptional characteristics that make it different from China or anywhere else. For starters, the population is startlingly young: 50% of the population is under 25 years old. To those with access to schools, compulsory education at the elementary school level is pretty good. The country has increasingly progressive and deregulating labor policies which make it easy for people to move around, “The unskilled and semi-skilled labor pool is very mobile,” Vikram says, “It’s a numbers story. The mobility and open labor market really help businesses.” While experienced talent is in short supply, employers who are willing to nurture and build a workforce will find the raw talent available.

Experience in FMCG: With respect to professional talent, the MNC’s who have been established in India for many years are consumer packaged goods companies. Therefore a lot of the experienced talent has FMCG background from companies like Unilever and Procter and Gamble. Comparatively fewer managers are available from the durables and manufacturing sectors. Vikram expects that sectors like telecommunications, financial services, media and entertainment, IT and e-commerce, and retail will continue to experience huge pressure to find experienced talent. Health Care is a sector with growing demand where experience is thin on the ground and needs to be developed.
Reverse of the Brain Drain. Partly as a result of the Global Financial Crisis and partly due to economic liberalization and opening up, the relative attractiveness of India as a place to live and work has increased for individuals who may have left their home country long ago. “The number of people who are interested in coming back to India is increasing not by the day, but by the minute.” Vikram says. While this is potentially a great source of experienced management skill for MNCs, there are a few pitfalls. Reverse Brain Drainers may not always adjust easily to returning home after many years away. They may have unreasonably high compensation expectations. Also their businesses may be starting up or very small. To lead them may require extreme resourcefulness, in-depth market knowledge or other specialized talents. Not every returnee is ready for this. Hiring companies may want to consider a greener but savvier local hire over a returnee.
“Think regionally and act locally.”: Companies that come to India thinking that they can use their home template to achieve success find quickly that the home template does not work in India. “India is 25 different countries. We should be a separate continent,” says Vikram. By being sensitive to the array of nationalities and regional differences, companies will be more likely to succeed. “We have a central government and local governments with a strong dual taxation situation. On top of this you have to deal with the local social issues. Companies who take the time to understand all this will be much more successful. When you introduce your products, if you can give the same level of value and service in every market, you will get it right. If you are a company focused on short term results, India is a market that will test you.“
DHR International has three offices in India: New Delhi, Mumbai and Bangalore as well as 8 other offices throughout Asia. For more information about our services and capabilities in India, please contact me.


COMPENSATION BENCHMARKING:

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