Archives for: November 2010

11/30/10

Permalink 02:39:05 am, by dacare, 1047 words, 1300 views   English (US)
Categories: Candidates, Labor and Worker, HR News Express

Japanese firms hire China's brightest

For Yukimasa Uchida, managing director of the Japanese arm of the Boston Consulting Group, a recent recruiting trip to sift the best and the brightest among China's top graduates was a revelation.

"It was like striking a gold mine," Uchida said of the job fair.

His company had attended the event expecting to make job offers to two or three students, but only if it could find people of the right quality.

"We have already made job offers to six students in Beijing and Shanghai together," he said. "We may hire some more."

He was not alone among Japanese recruiters in being impressed by the quality of applicants at the event, held in Beijing and Shanghai between Nov. 3-6.

The fair, organized by Recruit Co., a leading job placement agency in Japan, drew about 10,000 students from 39 universities, including the elite Peking and Tsinghua universities in the capital and Fudan University in Shanghai. Of these students, only about 1,000 college seniors were selected for interviews by the prospective Japanese employers, after a vocational aptitude test and preliminary interviews.

For successful applicants, the potential rewards on offer were mouthwatering. Although Japanese businesses have been hiring in China for years, the 22 companies at the fair were hiring people to career-track positions in their Japanese headquarters, rather than jobs at China-based affiliate companies.

That usually means much higher pay and chances for promotion. The companies included major names such as Sumitomo Mitsui Banking Corp., Mizuho Financial Group Inc., Kirin Brewery Co. and Konica Minolta Holdings Inc.

Like Uchida, Noriya Fukumoto, personnel manager of the toymaker Tomy Co., was bowled over by the caliber of the students he encountered.

"They are brilliant," Fukumoto said. "They have a clear vision of their career path and have a strong drive, compared with Japanese students."

Tomy offered jobs to three applicants, one more than it had anticipated. It plans to recruit foreigners to half of its new positions for college graduates in future.

Boston Consulting Group had been hiring between 10 and 20 graduates a year from Japanese colleges, including graduates of the University of Tokyo, Keio University and other big-name schools.

"Most job applicants were inclined to value stability," Uchida said. "There were fewer combative candidates, like soldiers of fortune."

In China, its recruiters were finding ambitious and go-getting personalities, he said, "the type we greatly favor."

The company did not make Japanese language skills a requirement for the recruits at the interview, taking the view that they can learn Japanese after getting a job offer. They all spoke English competently, although most of them had never been abroad.

Junichi Ito, the organizer of the fair at Recruit's Shanghai unit, said the large number of top-quality applicants had been attracted because Japanese businesses were offering positions on the payrolls of their Japan-based operations.

"Japanese affiliates in China have found it hard to secure top-class personnel because their pay is lower than that of U.S. and European counterparts," Ito said. Another obstacle has been a perception that local hires cannot reach the top echelons of corporate hierarchies.

The companies at the fair paid 1 million yen ($12,000) each to take part and were required to pay 1.1 million yen for each new recruit. In return, they got access to the cream of the more than 6 million people who graduate from Chinese colleges each year.

A 22-year-old senior who majors in Japanese at Fudan University said getting on the payroll of a Japanese company's head office was key.

"While a monthly salary at a Japanese affiliate in China is about 3,000 yuan (about 37,000 yen), the starting salary in Japan is about 200,000 yen. There is no comparison," she said.

The promise of working overseas and of greater responsibilities at head office made the positions on offer at the fair very attractive, she said. "Many of my classmates are going to work in the United States and Britain," she said. "I want to work abroad, too."

Xu Shuang, 21, a Japanese major at Tongji University in Shanghai who is studying international economy at Fudan University on weekends, said he had been interviewed by a Japanese bank. The enthusiasm of the Japanese for hiring foreigners was evident, he said. "Japan's corporate culture will be changing."

The targeting of Chinese talent by Japanese businesses is not limited to the graduate market. China's state-run Shanghai Foreign Service Co. and the Japan-based companies A-commerce Inc. and Global Power Co. formed a tie-up in October to target mid-career Chinese personnel.

They plan to hold a presentation for about 50 Japanese companies in Shanghai by the end of the year and have 500 Japanese organizations signed up within three years. Their service will include introducing Chinese personnel in white-collar jobs at foreign-affiliated companies in China to Japanese companies' main offices in Japan.

Yoshikazu Akiba of A-commerce said Chinese workers, who used to prefer working for U.S. and European companies, were showing more caution since the collapse of Lehman Brothers in autumn 2008.

"A Japanese company that emphasizes job security is greatly appreciated," Akiba said.

Meanwhile, Japanese companies wanting to expand their operations in China are viewing Chinese personnel as critical to the success of their marketing strategies.

"Sales pitches by Japanese staff in China have their limits," an official with a major food company said. "We would like talented Chinese personnel to acquire our corporate culture while working at our main office and then to take the charge of developing new markets in China."

One alleged drawback of hiring Chinese graduates is their penchant for switching jobs, but Uchida at Boston Consulting Group said this was not an issue.

"Many Japanese elite graduates who are not very ambitious types quit in two or three years," he said. "Whether or not Chinese staff stay on depends on their employer."

With the ratio of Japanese college seniors securing job offers hitting a record low 57.6 percent this year, the once remote prospect of competing with foreigners for prized positions at Japanese head offices is now a reality. Fukumoto at Tomy put it baldly: "If we employ more Chinese, that means we have fewer slots for Japanese."

For Uchida, that might not be a bad thing: 'If (recruitment of more foreign personnel) wakes Japanese students and employees to global competition, it would be a success," he said.

(This article was written by Atsushi Okudera and Tokuhiko Saito.)

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Permalink 02:35:27 am, by dacare, 711 words, 679 views   English (US)
Categories: Candidates, Labor and Worker

China's economic engine hit by rising labor shortage

The economy's twin engines, the Yangtze and Pearl river deltas, are spluttering due to a shortfall of migrant workers, especially in the service and manufacturing industries, amid soaring living costs and stagnant salaries.

"The labor shortage has hit customer services and the home service sectors since spring, and it is becoming more serious recently," said Chen Qian, the manager of a downtown employment agency in Shanghai.

"On average, up to 40 percent of job vacancies in these sectors have not been filled."

According to the latest statistics from the Shanghai Restaurants Association, the shortfall in waitresses currently stands at 20 percent and will double during the Spring Festival period, which falls in early February next year.

"Up to 80 percent of the 40,000 restaurants in the city have been regularly running recruitment notices this year as demand for labor has been much higher than supply," said a male staff member, surnamed Xia, from the association's marketing department.

In order to fill the huge shortage in the customer services sector, many restaurants have to employ part-time workers from universities or previously unpopular middle-aged workers from rural areas in other provinces.

"As more and more migrant workers were born in the 1990s, they are more picky on salaries and work conditions, and it is extremely difficult to find enough hands ahead of the Spring Festival," said Shen Xiaoyan, restaurant supervisor of South Beauty, on Ziyun Road in Shanghai.

Migrant workers make up 95 percent of the workforce of the company, which owns more than 10 restaurants in Shanghai. It has dozens of unfilled vacancies, she said.

Shen added that the restaurant had removed the age-limit requirement for job applicants so that it could employ middle-aged workers and college students.

The main reason for the severe labor shortage is the soaring cost of living coupled with stagnant income growth, experts said.

The average monthly salary for an employee in the service sector in Shanghai is about 1,300 yuan ($197), barely enough to cover food costs.

"That has prompted more migrant workers to choose to stay in their hometowns, where they earn a bit lower but also spend less on living costs," said Zhang Zhenning, a senior HR consultant based in Shanghai.

In South China's Pearl River Delta region, labor shortages have already affected companies' expansion plans.

"Some companies have to give up orders because of worker shortages," according to sources with the Guangdong provincial department of human resources.

The Christmas and New Year periods are usually the busiest for production in the Peal River Delta.

The worker shortfall has been estimated at more than 900,000, according to a recent survey by the province's human resources department.

The delta's major cities of Guangzhou, Shenzhen and Dongguan are experiencing a combined shortfall of about 550,000 workers, according to the survey.

Labor-intensive industries such as garments, shoes, toys, textiles, construction, sales and catering are facing an even worse situation in employing new staff, sources said.

Some factory owners in the Pearl River Delta have been forced to move their production centers to inland regions, where most migrant workers come from.

"I've already moved two main workshops from Dongguan to rural areas in Hunan and Guangdong provinces, as more migrant workers prefer staying in their hometowns to lower expenses," said Michele Wang, the owner of Dongguan Michele Lingerie Co Ltd.

To address the challenge, Guangdong provincial authorities have raised the minimum salary several times over the past months and lowered the threshold for migrant workers to get the local hukou, or household registration.

Chen Renjun, an official with the Haifu Job Center in Huizhou, a city in Guangdong, said the number of people seeking work at his center has dropped more than 20 percent in the past month from the same period last year.

The situation will be even worse for employers in the first quarter of 2011 as migrant workers leave the city for the lunar new year, he said.

Liu Kaiming, director of the Shenzhen-based Institute of Contemporary Observation, said the labor shortage will continue to exist in Guangdong for years.

"The labor shortage, however, will help coastal areas upgrade their industrial structure," Liu said.

Ni Jiasheng, 23, a migrant worker from Hunan province, said the labor shortage is actually good news for migrant workers.

"We can now have more choices (in seeking employers)," he said.

Source:China Daily

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11/22/10

Permalink 11:29:49 pm, by dacare, 338 words, 579 views   English (US)
Categories: Candidates, Labor and Worker

Hiring picture rosy in China

The hiring rate for professional or managerial level positions in China is second highest in the world behind Thailand, according to a report from a leading British staffing firm.

Of the 3,000 Chinese firms polled in October, 81 percent said they planned new hiring in the third quarter, up from 72 percent last quarter.

The November report, from London-based Antal International Ltd, revealed most new positions in China will be in banking, pharmaceutical, manufacturing and professional service sectors.

The company's October survey polled some 3,000 companies in China and over 9,000 worldwide, Li Zhe, a public relation's official with the company, said Tuesday.

China hiring is up on the nation's strong economic growth.

"The Chinese government has done a good job helping China rebound from the economic crisis, which has brought a real recovery for the Chinese economy," said James Darlington, the company's Asia chief.

China's huge domestic market is the driving force behind all the new hiring and also helps explain why many international companies, for example in the pharmaceutical sector, are now expanding their production bases and constructing research and development facilities in China, Antal's Darlington said.

The Asia-Pacific region, where 77 percent of organizations polled are hiring at the professional or managerial level, has been the most active hiring region in the world, according to the research.

Brazil has also reported hiring demand is up, with 70 percent of those polled planning to bring on new staff in the third quarter.

Globally, the sectors with the highest levels of recruitment are in healthcare, renewable energy, biotechnology, retail and professional services.

On a different note, the report also showed which industries are shedding employees, and in China the banking industry is axing the largest number of staff.

According to Antal International Ltd's Darlington, this is a positive sign for the industry as the upgrading of talent demonstrates the dynamics of the sector.

While the world financial crisis is still not over, Darlington concluded that a slow but steady recovery has been demonstrated in the professional and managerial jobs market since 2009 — especially in China.

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11/03/10

Permalink 06:14:06 am, by dacare, 1152 words, 709 views   English (US)
Categories: News of China, HR News Express

The Cost of Doing Business With China

By Carl Bialik

My print column this week examines the effect on U.S. jobs of the trade deficit with China. Does the massive imbalance between imports and exports cost the U.S. millions of jobs?

A frequently cited report says it has. Dozens of members of Congress signed a letter last month citing the report from the Economic Policy Institute, a Washington-based think tank, that found trade with China has cost the U.S. 2.4 million jobs.

However, some economists and China analysts point out several potential problems with the estimate, including that several countries have run up trade deficits during boom times as they invested in growth — including the U.S., where there has been essentially no correlation between unemployment and trade deficits, overall and with China. The numbers move seemingly in random ways compared to each other.

“By the logic of their argument, any country that runs a trade deficit should experience perpetual loss of jobs and wages, and any country that runs a surplus should experience perpetual gains in jobs and wages,” Arthur Kroeber, head of China research for the economic-research company GaveKal Dragonomics, wrote in an email. “Yet many developing countries run consistent current account deficits (for example South Korea during much of the 1970s and ’80s) and still experience high job and wage growth, while other countries run persistent surpluses yet have stagnant employment and wage growth (e.g. Germany and Japan).”

“Vigorous job creation and larger trade deficits are both hallmarks of strong economic growth,” said John Murphy, vice president of international affairs at the U.S. Chamber of Commerce, who has written critically about the EPI report. Scott Kennedy, a political scientist at Indiana University, said of the claims about China costing U.S. jobs, “China is just a scapegoat.”

Robert Scott, the senior international economist at EPI who produced the numbers, defends the study, pointing out that many factors contribute to economic growth rates, and it is possible for the same factor to drive down both the trade deficit and employment — such as the recession that ended last year in the U.S. That doesn’t mean that a trade deficit causes higher employment. Scott also notes that other studies, like his, have assumed that every dollar of a trade deficit displaces domestic production.

Scott Paul, executive director of the Alliance for American Manufacturing, which has posted Scott’s findings in an interactive map, said the assumption about displacement of domestic manufacturing is sensible. “There is an extraordinary amount of competition between U.S. production and Chinese production,” Paul said. “A lot of people like to assume that China is making things we don’t make here. That may be true in some areas, but it is not in others.”

Susan Houseman, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich., said that Scott’s calculations make more sense than the claim occasionally made in U.S. economic circles — and, recently, by the White House — that increased productivity has backfired on U.S. manufacturing workers. Houseman has found that much of the supposed productivity gain can be chalked up to offshoring of some processes, meaning it was an artificial gain: If production is divided by U.S. workers, but others do some of the producing, U.S. workers would seem to be gaining productivity they really aren’t.

Houseman sees indirect signs that trade deficits may be driving down employment: “Job losses in manufacturing are almost perfectly correlated with growth in import penetration,” Houseman said. “It’s really very striking.”

Ray Fair, an economist at Yale University, prefers using his multicountry econometric model to estimate the potential effect of China’s allowing its currency to appreciate — which, he found earlier this year, would be negligible in terms of U.S. employment. “This is a complicated question, where one needs a complete multicountry model to analyze,” Fair said. He added, of his model, “It’s been extensively tested.” Of his finding, Fair added, “The trade deficit is ‘affected by many things, and it is not sensible to relate, say, the U.S. deficit with China to U.S. employment,’ Fair said.

Paul Krugman, an economist at Princeton University and columnist for the New York Times, wrote on his Times blog last year that his back-of-the-envelope calculation concludes China’s “artificial” trade surplus is costing 1.4 million jobs in the U.S. “If China were to end or reduce that artificial trade surplus, the extra demand would find its way to the advanced countries through a variety of channels, most of them not captured by the Fair model,” Krugman wrote in a statement provided by a New York Times spokeswoman.

Scott and Krugman criticize the assumptions Fair fed into his model. “In my view, there is no evidence that the effects of renminbi revaluation on prices, wealth, real wages or interest rates [in the U.S.] will be significant,” Scott said.

Krugman added, “When I looked at Ray Fair’s estimates, my conclusion was that he was running an exercise that didn’t at all correspond to the current situation.” For instance, Krugman points out that the Fed is running up against the so-called zero lower bound that may keep it from raising interest rates in response to a Chinese currency revaluation.

One thing all three of these methods have in common is that they all seek to describe the relationship between trade and jobs rigorously, with some kind of model or formula. This improves on other efforts that are based on extrapolating from individual cases of companies closing factories and moving their operations offshore, said Catherine L. Mann, an economist at Brandeis University’s business school. She credited the EPI estimate for its “transparent methodology,” but she said it is “one where the underpinning assumptions are not valid.”

EPI’s Scott “made a heroic effort given the enormous data holes” in U.S. statistics about trade, such as which industries imports are being used in, and the price of imports per unit, said Michael Mandel, a senior fellow at the Progressive Policy Institute, a moderate Democratic think tank. “I can’t criticize him for the effort he made. He’s answering questions people want to answer.”

Alan Tonelson, a research fellow at the U.S. Business and Industry Council, an advocacy group for small businesses, said more government-collected data would help shed light on trade’s impact on jobs. “I’d like every multinational company to report, what do they export, what do they import — and what do they source in the U.S., what do they source overseas,” said Tonelson, who wrote about the trade deficit in a New York Times op-ed last month.

Further reading: The conservative Cato Institute and American Enterprise Institute also have criticized the EPI report. The Congressional Research Service analyzed the economic impact of China’s currency intervention in a report earlier this month.

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Permalink 06:11:30 am, by dacare, 752 words, 625 views   English (US)
Categories: Technical, IT Recruiting

Big IT moves more work, jobs to China

BANGALORE: As the Chinese pitter-patter into IT services turns into a loud clatter, Indian majors are pushing hard to grab a bigger slice of that market. TCS, Infosys and Wipro plan to shift at least 10% of their new outsourcing projects to Chinese cities of Dalian and Chengdu, for the first time since India’s software exports industry took note of the Chinese threat a decade ago.

Top customers like GE and General Motors are demanding that Indian vendors deliver some services from locations outside India because of geo-political risks and location redundancy. India’s tech behemoths are also realising that by creating local jobs in China, they can gain a bigger share of the Dragonland’s $10-billion-plus outsourcing market.

While TCS plans to increase its existing 1,200-employee base by over five times in the next few years, Infosys will invest $100 million to build a 4,000-professional-strong team. Wipro, the third-biggest software exporter, will have around 1,000 professionals in a year’s time.

“A clear inflection point for China has been clients’ acceptance over the last few months. And despite some risk perceptions, we are selling Infosys China, and not just China, as a new location to customers,” says SD Shibulal, chief operating officer, Infosys. “Over 80% of the work we do in China is for our global customers,” he added. Testing of software applications, engineering design for automobile and consumer durable firms are among projects set to get increasingly shipped to China.

Clearly, China is no longer a pure rival for India Outsourcing Inc. Instead, it is increasingly helping Indian technology vendors position themselves better by offering a choice of delivery centres beyond India to customers. “It’s no more about being rivals,” says Girija Pande, chairman of TCS’ Asia Pacific operations. “We are now seeing more load that can be sent to China. In fact, we are already doing both IT and BPO projects,” added Pande.

Rising wages, attrition rates and increasing scarcity of employable labour are among the top reasons for this shift in the way Indian IT industry has been looking at China. A September report by Goldman Sachs says Infosys’ revenues from China could top $200 million in three years, from $100 million today. TCS’ China revenues are expected to reach $250 million from almost $100 million currently, the report added.

While bidding for global outsourcing contracts, Indian vendors are beginning to break up a project into pure application development and software testing components. Of these, “non customer-facing portions such as testing is increasingly going to China,” says Amneet Singh, vice-president, global sourcing at consultant Everest Group.

Some clients are also concerned about growing geo-political risks in India because of terrorist threats and delicate equations with neighbours such as Pakistan and China. “We received calls from several customers after the 26/11 Mumbai attacks. Since then, we have noticed China come up more frequently in our discussions," said a CEO at one of the top Indian tech firms that has a development centre in Mumbai.

Another inflection point for China’s growing outsourcing industry is the rise of local firms like HiSoft, NeuSoft and VanceInfo. Some like HiSoft are looking at success stories of Infosys and Cognizant and globalising their operations. HiSoft, for one, got listed on Nasdaq in June and has already started getting customers like GE, UBS and Citibank to offshore work to China.

“There’s a growing need from CIOs to diversify and China is positioned as an ideal complement to India,” says Ross Warner, a spokesman for HiSoft, based out of Beijing. The company started working with GE in Japan eight years ago. “It’s no secret that we look up to their (Infosys) journey and are now focussing to replicate some of that,” adds Warner.

“Moreover, MNCs that aspire to sell into China are often requested by the government to purchase from China. This is a factor motivating MNCs like GE, 3M and Nokia to procure to China,” says James Friedman, analyst at SIG.

However, even as China is set to become a $30-billion outsourcing powerhouse in five years, there are hurdles it needs to overcome. While the country produces more engineers than India, lack of experience in handling large, complex projects remains a worry. Plus, China’s wage rates are a higher than India’s because employers have to spend on social security.

“This is a common mistake which is made because in China, one would have to pay 50% tax to the government plus a premium of 10-15% if the person can speak English,” says Frances Karamouzis, research veep at Gartner.

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