Recruiting in China

Foreign firms invest $1 billion a week in China but they lack creative managers who are willing to take risks.

Reasons For Lack of Talented Managers
1. Success often depends more on loyalty to the party than business acumen .

2. There aren't many MBA programs in China.

3. Chinese talent is 1st-generation. They don't have role models. Their parents worked for state-owned firms and were too bureaucratic. Entrepreneurial types are too unrestrained.

4. The Confucian heritage emphasizes rote learning and hierarchy. That might explain why Chinese managers are cautious about taking the initiative. But maybe living in a police state has something to do with that, as well.

5. The one-child policy doesn't grow team-players. [Are only children loners?]

No Marketing Talent
Local Chinese are good technically and in administration. But there is no experience in marketing.

"You find yourself micro-managing more than you'd like.... If the tasks are across departments, or if it means working in a team or trying to relate to others, they still have a long way to go."

The biggest issue - Retention
In 2004, 1 in 10 execs changed jobs in Shenzhen. 1 in 12 in Beijing. That's a nationwide employee churn rate of 11.3%, up from 8.3% in 2001.

Some smaller firms see a 30% turnover.

Compensation Rates
Middle Manager, foreign firm (in Beijing or Shanghai): $27-32K (base plus bonus)
Senior Managers: $46-54
Top execs: 80-90K

Salaries Rising
Avg annual salary increases for mid-level and senior managers: 6-10%.
Accountants' salaries: rising 14% / year.

Standard Perks: Bonuses, long-term incentives, free housing, meals, a mobile phone, car. Also: more holidays, mat and pat leave, more frequent job rotation and share options.

Employers also make Big Contributions to China's National Security Fund. So, workers cost double their basic pay.

Attractions: Chinese employees will join a company for good training.

Alternate Strategies
Overseas Chinese are filling some jobs. But they're expensive and don't know the local market.

Non-Managerial Labour
1. South Chinese economy is growing and moving into higher level work.
2. Firms can't find skilled labour.
3. They can't find cheap labour. (What does "cheap" mean in China?)

Some companies are relocating to cheaper inland cities.
Some will outsource to Vietnam and Cambodia.

Problems with HR Strategy
Business plans aren't taking the lack of talent or the cost of recruiting and retaining talent into account.

From the Economist