Recruiting in China

By Kelly Proctor and Tina Qiu Bloomberg News

Published: August 16, 2006, Shanghai

In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire enough accountants, said Anthony Wu, a senior adviser and former chairman of the Ernst & Young office in China.

The need for people qualified to work in the financial field shows no sign of decreasing. China recently lifted a one-year ban on share sales, and public companies are required to meet international accounting standards by next year, spurring demand for accountants.

The country has 69,000 licensed accountants and needs more than 300,000, said Chen Yugui, secretary general of the Chinese Institute of Certified Public Accountants. China did not have a university major in certified public accounting until 1994.

"The gap between the need and the supply is still huge," Chen said.

Other professions are suffering, too. Even though a third of China's university graduates receive engineering degrees, international companies cannot find enough engineers. Many graduates are not qualified because they are steeped in theory and have not learned to handle projects or work in a team, McKinsey wrote in its report.

Freshfields, a law firm based in London that has offices in 18 countries, is searching for qualified lawyers as part of an expansion that will add as many as 65 attorneys in China during the next five years, said Mary Wicks, human resources director for Freshfields in Asia. Freshfields is recruiting lawyers who are fluent in Mandarin and have international law degrees.

China has 120,000 lawyers, or one for every 10,800 people, compared with a ratio of one to 375 in England and Wales. "Competition is tough," Wicks said.

Companies are increasing pay and benefits to attract talented workers. The average salary in China for accountants at firms like Ernst & Young and Deloitte & Touche Tohmatsu rose 30 percent to $9,000 last year, according to a survey by Mercer Human Resource Consulting, based in New York.

Ernst & Young is offering more vacation time and flexible work schedules, said Catherine Yen, the firm's head of human resources for China. In the first half of this year, average annual wages in urban China rose to $1,160, or 14.3 percent, from a year earlier, China's National Bureau of Statistics reported.

SHANGHAI In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire enough accountants, said Anthony Wu, a senior adviser and former chairman of the Ernst & Young office in China.

The need for people qualified to work in the financial field shows no sign of decreasing. China recently lifted a one-year ban on share sales, and public companies are required to meet international accounting standards by next year, spurring demand for accountants.

The country has 69,000 licensed accountants and needs more than 300,000, said Chen Yugui, secretary general of the Chinese Institute of Certified Public Accountants. China did not have a university major in certified public accounting until 1994.

"The gap between the need and the supply is still huge," Chen said.

Other professions are suffering, too. Even though a third of China's university graduates receive engineering degrees, international companies cannot find enough engineers. Many graduates are not qualified because they are steeped in theory and have not learned to handle projects or work in a team, McKinsey wrote in its report.

Freshfields, a law firm based in London that has offices in 18 countries, is searching for qualified lawyers as part of an expansion that will add as many as 65 attorneys in China during the next five years, said Mary Wicks, human resources director for Freshfields in Asia. Freshfields is recruiting lawyers who are fluent in Mandarin and have international law degrees.

China has 120,000 lawyers, or one for every 10,800 people, compared with a ratio of one to 375 in England and Wales. "Competition is tough," Wicks said.

Companies are increasing pay and benefits to attract talented workers. The average salary in China for accountants at firms like Ernst & Young and Deloitte & Touche Tohmatsu rose 30 percent to $9,000 last year, according to a survey by Mercer Human Resource Consulting, based in New York.

Ernst & Young is offering more vacation time and flexible work schedules, said Catherine Yen, the firm's head of human resources for China. In the first half of this year, average annual wages in urban China rose to $1,160, or 14.3 percent, from a year earlier, China's National Bureau of Statistics reported.

SHANGHAI In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire