Wednesday, August 31, 2011

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

No comments: