Recruiting in China

By Frank Mulligan - Recruit China

By now I am sure you have seen the headlines. ’Chinese stock plunge sets off a worldwide sell-off’, and ominously, ‘It began in Shanghai’.

If you haven’t been paying attention to this story maybe it is time to take a look. It looks and sounds like the beginning of a Hollywood thriller except that this time it’s for real.

Putting aside the negative consequences of the world-wide stock sell-off, it is clear that China has come of age. Ten years ago, or even five, no one paid any attention to the stock markets in China. There was little incentive to do this as the exchanges in Shanghai and Shenzhen were inaccessible to foreigners. Additionally, the stocks themselves were not of sufficient quality to grab anyone’s interest, and the market was extremely opaque.

It was more akin to gambling than investing.

The situation has changed a lot since then but it is still hard to come to terms with the fact that the Chinese stock exchanges were the first to fall and that they triggered a world-wide panic. It’s a bit like growing up. Suddenly you have all these additional skills but don’t know how to use them.

The source of the sell off appears to be the idea that the former US Federal Reserve Chairman, Alan Greenspan suggested a recession in the United States, and soon. The good news is that if you look at his comments, he did not specifically say that he expected a recession in the US. What he said was ‘ While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 … with some slowdown’.

Not exactly the sky falling down, is it?

Here in China the upside of this is that the narrative of a recession and a falling stock market may cause companies in China, both foreign and local, to hold back investments in new factories and offices. Big companies are like that. Staffers don’t make strategic investment in uncertain times.

This should trickle down to a slowdown in hiring, albeit small, just at a time when it would normally increase rapidly. Candidates might also absorb the current headlines and become a little more conservative. The net effect might be an increased stability in retention patterns. So look out for a little fewer resignations than usual, which is a definite positive.

On the flip side you may have a harder time convincing candidates to join your company if you are new to the China market or the role is risky.