Monday, March 24, 2014

2014 Hiring Trends

When I was in the United States in February, everyone was full of gloom about China. The US press paints a dire picture of China's growth slowdown, pointing to China's "unbalanced economy," over-dependency on government spending on infrastructure, a "housing bubble" and evidence of irresponsible borrowing by China's local and provincial governments.
From here on the ground, things look pretty normal. China is still expected to grow at about 7.4% this year which still makes it one of the most dynamic economies around. That growth rate feels solid for the foreseeable future because it is supported by strong growth in consumer spending (in the 11% - 12% range even with Xi Jinping's crackdown on entertainment spending). The Chinese economy is in transition. The private sector is becoming increasingly important driver of investment.(1)   While this trend creates some volatility, it doesn't mean the economy is about to plummet. In fact a few MNC business heads tell me their sales are still growing at double digits.

With all the pressure on revenue growth, we are filling many positions at MNCs for Sales and Marketing leaders or for General Managers with significant commercial experience. We expect to see this trend continue. In fact we believe these skills will be in even more demand because MNCs are finding that it is getting harder to sell in China. Chinese companies are getting more competitive and customers are getting smarter.

In order to keep one step ahead of the local competition and maintain profit margins, MNCs will find it increasingly important to innovate. We are filling more roles for Research and Development leaders in China who can understand the Chinese customer and design products to attract them. We also see an increase in hiring for senior Government Affairs executives. When GSK's senior executives wound up in jail accused of bribery last summer, Western businesses woke up to the reality of increased Chinese government scrutiny. New consciousness about compliance extends beyond Government Affairs to the Risk Management, Legal and Compliance and Quality departments which are also looking for good leaders.

The economic slowdown is bringing some good news to employers. In the past, it was not unheard of for employees to ask for 30% compensation increases to change companies. This has come down in the last two years to the 12 - 15% range. In 2013 and 2014, companies like HSBC, IBM, Merck and Google/Motorola announced China layoffs. While these lay-offs are not usually at the executive level, employee retention rates should improve as the job market cools off.  

(1) My two favorite China economists agree on this: Stephen Green at Standard Charter Bank and Andy Rothman at CLSA Consulting.

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