Recruiting in China

Old Yang, a 55-year-old security guard in a residential complex, has been counting the days until his next paycheck. Effective this month, the minimum wage in Shanghai rises to 1,620 yuan (US$261) a month from 1,450 yuan.

Like most low-wage workers in the city, Old Yang is finding it hard to cope with rising prices for groceries, medicine, transport and the other basic necessities of life.

Sitting in the gate room of a residential compound on Anguo Road in Hongkou District, a cigarette glowing in his left hand, Old Yang said “food, transportation, tuition, water, gas and power bills. You have to pay for everything with the minimum wage.”

Old Yang lost his job during the global financial crisis in 2008 and found work as a security guard through a government-sponsored re-employment program aimed at helping jobless people in their 40s and 50s.

“Many jobless people chose to stay at home after the crisis,” Old Yang said. “I chose not to because my family needs money and I want to get a pension after retirement.”

His wife works part-time to help defray the cost of a son in college.

On March 29, the Shanghai government increased the minimum monthly wage by 11.7 percent, or 170 yuan. The minimum payment for part-time employment was lifted to 14 yuan from 12.5 yuan an hour, according to the government notice that took effect on April 1.

Nationally, Shanghai has the highest minimum wage of all 13 provinces and major cities in China. Its most recent rate of increase, however, isn’t as high as in some provinces, such as Jiangxi Province, which showed the biggest increase this year at 41.4 percent, according to People’s Daily.

The minimum wage in Shanghai has more than quadrupled, from 352 yuan, in the last 15 years. By 2020, China aims to double the per-capita income of both urban and rural residents from 2010 levels and narrow the gap between the rich and poor, according to a report from the 18th National Congress of the Communist Party of China that ended last November.

“The minimum wage will also be doubled by that time,” said Jennifer Feng, a senior human resource analyst with 51job.com, a Nasdaq-listed headhunting firm. “But you have to remember we are talking about net income. Actual take-home pay may be less, when social insurance fees and other mandatory costs are included.”

In its Five-Year Plan for the period ending 2015, the State Council, China’s Cabinet, stipulates annual increases of at least 13 percent.

“I think the latest increase is a balanced result, which takes into account the rising cost of living and the payroll tolerance capacity of employers,” Feng said. The risk, she said, is that employers, especially in manufacturing, may lay off staff or recruit lower-paid workers to replace experienced ones in order to lower their operating costs.

There were a dozen security guards in Old Yang’s residential compound last December. Now, there are only six.

“Maybe our boss knew he couldn’t afford so many of us, anticipating that the minimum wage would rise, so he fired them earlier,” Old Yang said.

He said his employer tends to hire local people like him because their social insurance fees are paid for by the government and the neighborhood committee under the re-employment plan.

Still, migrant workers are also commonly hired as security guards and cleaners in Shanghai. One such colleague of Old Yang’s, surnamed Zheng, lives in the basement of a high-rise in the housing complex, along with his wife, who works as a cleaner. Zheng, a native from central China’s Henan Province, declined to give his full name.

Zheng said the accommodation is free and he doesn’t have to pay utilities.

“Rent can gobble up nearly half of the minimum wage in Shanghai,” Zheng said. “The city is really too expensive to live in.”

For employers, the picture is mixed. A rise in minimum wages tends to make higher-paid workers think they should get raises, too. Feng said as wages rise, many employers are caught in a bind. Amid slower economic growth, they are under pressure to make more money, and wages account for a big chunk of operating cost. She suggests the government help share the burden by reducing business taxes or by defraying part of the cost of hiring people.

Some days it is so thick that you can scarcely see across the street. Other days its acrid smell catches at the back of your throat. More than one day in two in recent months, it has been officially unsafe to go outside without a face mask.

Three months of shockingly bad air pollution, known to foreigners here as the “airpocalypse,” is now prompting growing numbers of expatriates and their families to leave China, and some companies to offer hazard pay to keep them here, according to executive recruiters, doctors, and business leaders.

And for the first time, they add, ambitious young Chinese executives, too, are seeking to build their careers in more hospitable cities, driven to fresher pastures by the capital’s foul air.

Though foreigners leave Beijing for many motives, says Jim Leininger, principal consultant at the Beijing office of Towers Watson, a global human resources firm, “the litany of reasons usually starts with air quality. It’s a very important factor.”

“Just yesterday I got two e-mails from people who said they had been in Beijing for several years, the air quality was nuts, and they wanted to go back to the States,” adds Kitty Vorisek, executive vice president of DHR, a head hunting company with five offices in China. Such requests, she says, have snowballed in recent months.

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The past three months have seen the worst air pollution on record in Beijing. For a couple of days in January, the levels of PM 2.5 particulate matter (2.5 micrometers or less in diameter, which reaches deepest into the lungs) were 40 times higher than those categorized as safe by the World Health Organization.

On 35 days during February and March, more than every other day, the US embassy’s air pollution monitor detected levels deemed “very unhealthy,” “hazardous,” or “beyond index.”

“Air quality is one of the most negative things about living in Beijing, especially for families with children,” says Mr. Leininger. “It’s all you hear about every day.”

“I’ve talked to a lot of parents who won’t be renewing their employment contracts when they are up,” says Richard Saint Cyr, a doctor at Beijing United Family Hospital who specializes in air quality issues. “For many of them it is a very reasonable decision.”

FOREIGN BUSINESS COMMUNITY TAKING A HIT

The trend is anecdotal for the time being; nobody appears to have compiled any statistics yet, but human resources experts say the movement is clear and a handful of departures have attracted attention in the foreign business community.

A senior lawyer for BMW and a top Volkswagen executive both insisted on being repatriated in January, and when anyone leaves “we inevitably hear, nearly every time, that one of the contributing reasons is the air pollution,” says Adam Dunnett, head of the European Union Chamber of Commerce in China.

The traditional outflow of expatriates in the summer, at the end of the school year, is “almost guaranteed” to be up on last year, predicts Max Price, China partner at Antal, an executive consultancy. But pollution is not the only reason, he points out; many international firms are increasingly replacing foreign executives with locally hired Chinese recruits.

That might become more difficult in the future, observers suggest. Some young Chinese executives, who have long seen Beijing as a high-paying mecca where the rewards are worth the hardships, are beginning to think differently.

REASON TO GO SOUTH

Appealing to them are companies such as Meizu, a manufacturer of mobile phone handsets based in the southern seaside town of Zhuhai.

Two months ago, the firm launched a “Blue Sky Recruitment” campaign in Beijing, placing ads in business tower block elevators around the city to tempt young IT engineers into moving south.

“Do you dare to pursue a life with blue sky and white clouds?” read a Meizu poster at a Beijing jobs fair last week. “Welcome to air you can breathe with a PM 2.5 reading of 27.”

“Young Chinese professionals are looking not just at pay but at quality of life issues too,” says Mr. Price, whose own girlfriend has just moved from Beijing to the coastal city of Qingdao to escape the pollution here. “They are very curious about this stuff, more eyes are open, and I can see this increasing.”

Meanwhile, human resources departments are scrambling to deal with the air quality issue for their companies’ employees, buying air purifiers, restoring hardship allowances, and asking for expert advice.

“Our hospital has been flooded with requests from companies and embassies for health talks,” says Dr. Saint Cyr. “A lot of businessmen are very, very worried about this.”

That has made it harder to attract new talent from abroad, says Ms. Vorisek. In the past six months, she says, health questions have become “much more prevalent” among candidates for jobs in Beijing. Some companies, according to Price, are even paying American recruits "danger money" to attract them.

LONG TERM DAMAGE TO BEIJING?

This could do long term damage to Beijing’s future, worries Huang Xiaoping, head of Risfond, a head-hunting company that specializes in recruiting foreigners to Chinese companies. “It will be a big challenge for Beijing to attract foreign talent if the air quality does not improve,” he warns. “Environmental problems could become a big obstacle to future economic growth.”

The Chinese government says it is aware of the threat. Most of the PM 2.5 pollution comes from power generating plants and cars. The head of Beijing’s Environmental Bureau, Chen Tian, promised in an interview this week with the Beijing News that new automobile emissions standards to be introduced in July will help reduce pollution, and that the construction of new power stations outside Beijing will be sped up so that coal-burning generators can be shut down.

In February, the State Council, China’s cabinet, pledged new fuel standards to make gasoline and diesel less polluting.

Similar promises in the past, however, have not always been kept.

Beijing is losing its pre-eminence in China’s economy, and thus its attractiveness to high-flying foreign executives, as second-tier cities develop specialized industries, says Price. “How fast that happens depends on how quickly they get hold of the pollution issue,” he predicts.

“Beijing will always be the capital of the fastest growing big economy in the world,” he says. “But it is losing its attraction."

Professionals in Shanghai overtook their peers in all other Chinese cities in terms of salary, according to the 2013 spring job market report released by Zhaopin.com.

The average salary of professionals in Shanghai reached 7,112 yuan ($1,133) a month, the highest among all the 24 surveyed cities.

Shenzhen ranked second with an average of 6,787 yuan per month. Beijing ranked third with a monthly average of 5,453 yuan.

In general, the industries that offer the highest salaries are energy, automobile and petrochemical.

The industry that offers the highest monthly salaries in Shanghai is the energy/mineral industry to with 9,711 yuan on average. The auto industry offers the second highest salaries in Shanghai with 9,644 yuan per month, and petrochemical is the third highest with 9,218 yuan.

The three industries that offer the highest salaries in Shenzhen are communications and finance with the average monthly salaries above 8,200 yuan.

In Beijing, communications tops the list with 7,633 yuan a month, while the property/construction/decoration industry is second with 7,095 yuan per month. Finance is third with an average of 6,950 yuan a month.

China's has 48 million people working in the fields of science and technology, but the pool of personnel still lacks high-level scientists for strategic needs, a former human resources official has revealed.

Though the numbers of both sci-tech current workers and graduates outnumber those of the United States, China is not a great power of talents, Xu Songtao, former deputy head of the Ministry of Human Resources and Social Security, said at a seminar on Monday.

According to statistics from the Ministry of Science and Technology, China has just over 10,000 people classed as high-level innovative talents, said Xu, also an adviser to the China Talent Research body.

Despite China being a marine leader, the number of Chinese scientists registered in a database of oceanic talents is less than 100, one-twentieth of that of the United States, he added.

"The innovative capabilities and competitiveness of Chinese talents are also weak," Xu said, urging officials at all levels to pay great attention to the nurturing of talented people and to initiate a number of recruitment projects.

He also suggested creating a competitive environment to eliminate the incapable as well as to form a reserve of strategic talents.

Kindergarten teacher is the favorite occupation of Shanghai women, according to the report from the East China Institute of Talent Science.

More than 35 percent of Shanghai females chose teacher as their preference when given an occupational choice, and most of them would like to work in kindergartens.

The Shanghai Morning Post listed the major reasons for the job's popularity, including the job's stability, economic security, and months of winter and summer vacation.

Shanghai needs at least 10,000 kindergarten teachers in the next three years, according to the Ministry of Education.

The new standards for kindergartens, drafted by the ministry, say that full-time kindergartens must be equipped with three teachers for each of its classes, while two teachers are needed for each half-day class.

Human resource and administrative positions followed kindergarten teacher as Shanghai women's second- and third-favorite occupations, with 17 percent of them choosng the former and 14 percent the latter.

With significantly less optimism in the Chinese economy, only 22.2 percent of respondents gave a definite "yes" to a MRIC survey in terms of the possibility of seeking a job change in 2013, while the figure was 33.2 percent a year ago.

Executive recruitment company MRIC said in its 2013 Talent Report released on Monday that Chinese mainland professionals are increasingly aware of life-quality issues. Given the longer distances needed to travel to work and days away from home, flexible time is the biggest driver behind the desire for greater work/life balance, which is particularly marked among women on the Chinese mainland.

And while junior professionals are still ambitious enough to seek personal development in the earlier years of their careers, most middle professionals, or 40.6 percent of respondents, said that jobs should meet flexible working needs.

Most top and senior professionals, or 39.9 percent of the respondents, said that fulfilling family obligations is the most important factor for them at present.

As a result, some employers in China have started to implement remote working policies such as working from home one day each week or have Friday afternoons off in return for longer working hours on other days.

MRIC recommended that employers consider implementing similar policies and practices in order to attract and retain women and younger professionals, who are not necessarily low performers but have different work/life balance needs.