Recruiting in China

50 universities, colleges provide strong, reliable workforce for southwestern city

Ask Liu Jia which city he would choose if he had to re-launch his business, and his answer is unequivocal: "Chengdu, definitely Chengdu."

Liu is chief operating officer of Goodteam Studio, an APP development firm based in Chengdu, and he insists the southwest inland city is quite simply unequalled as a source of the kind of top talent he needs to remain competitive, not just in China, but globally.

Goodteam became top 10 on the Google Play store in terms of revenue in 2012, with more than 40 million downloads worldwide.

The young COO adds that even if one day he plans to open offices in other cities, its R&D team will still be based in Chengdu, because it harbors a pool of IT talent unavailable elsewhere.

As China's economy remains robust, cities across the country are thirsty for talent. Yet at the same time, they are being scorched by rising labor costs.

However, Chengdu's talent pool remains healthy, fed by more than 50 universities and colleges that provide around 150,000 graduates every year.

"Businesses here enjoy relatively low labor costs as well as low turnover rates," said Liu Jianing, head of the investment sales division of Chengdu Investment Promotion Commission.

He reckons that compared with coastal cities, labor costs and turnover rates in Chengdu are a quarter to a third lower.

"We have a comprehensive talent pool, from management to skilled workers," added Liu.

Chengdu's reputation for providing the very best talent has also grown outside of China.

ThoughtWorks, a global IT consultancy headquartered in Chicago, is a good example.

It has set up its software technology company in the city staffed by 50 recruits, 35 of whom are local IT graduates.

ThoughtWorks is well-known in the industry for intensive recruitment processes, with numerous rounds of interviews often spread over weeks.

"When we choose a city to start our business, the only thing we care about is whether there is enough talent," said Xiong Jie, ThoughtWorks' office director in Chengdu, who stresses that a lack of talent can be a real problem in the IT industry.

Xiong added that countries including Australia, the US and many in Europe are facing a lack of talented IT staff, but China is rich with potential stars in many cities including Chengdu.

According to the 2012 Chengdu Investment Guide, produced by Chengdu Information Office, there were 58,243 IT graduates in the city, meaning one in five graduates in the city is either a programmer or a software engineer.

"Companies like us are always in hot pursuit of programmers. That's why we come here," said Xiong, a 32-year-old from Chongqing, a municipality just an hour's train ride from Chengdu.

The city's 2012 investment guide claims that 233 of the Fortune 500 companies have a presence in Chengdu, including global giants such as Intel and IBM, which have set up research labs in cooperation with universities in Chengdu.

Companies have also built 180 training bases to better prepare their potential employees when they are still on campus, says the guide.

Besides holding onto its own local talent, the Chengdu government also goes to other big cities like Beijing and Shanghai to attract talented recruits for its IT industry, added Liu Jianing, head of Chengdu Investment Promotion Commission's investment sales division.

"Sichuan province used to be known as a great source of labor, but now we are seeing the opposite trend in some of our industries," said Liu.

"Low living costs, comfortable lifestyle and weather, low stress and large job opportunities are Chengdu's great advantages in attracting talents to come here to work."

The latest list of the 10 happiest Chinese cities, based on a survey conducted by Oriental Outlook magazine and the China Association of Mayors, released in December, had Chengdu and Hangzhou at the top of the list.

According to a human resource report released in 2011 by 51job, a Chinese online jobseeker website, the turnover rate of software engineers with three-year experience in Chengdu is 8 percent, in stark contrast with Beijing's 21 percent and Shenzhen's 20 percent.

While MyCOS's Fresh Graduates Employment Annual Report 2010 showed that Chengdu's retention rate of fresh graduates was 61 percent, against 28 percent for another major information technology and education hub, Wuhan.

"Low turnover rates are good for company development in the long run. Our workforce and the huge reserves of talent we have get high praise from employers," added Liu Jianing.

Qing Chuan is the manager of a drugs company, which produces sterile injection devices to American market, and he says Chengdu's dependable workforce is crucial for the business.

"Because of high living costs in big cities like Beijing and Shanghai, staff can move on quickly. The workforces there are not as stable as cities like Chengdu," he said.

Qing added that the talent pool is especially strong for engineers, a sector particularly targeted by universities in Chengdu.

Game APPs developer Liu Jia says he is proud of his Chengdu team, all of which are local to the city. As the city's APP developers continue to attract worldwide attention, Liu adds that he is getting regular enquiries from companies around the globe looking to send their staff to be trained by his company.

"Having a solid workforce means we can whole-heartedly devote ourselves to developing games.

"But in markets like Shanghai and Beijing, there are too many distractions and temptations."

Li Yu in Chengdu contributed to this story

Summary: The majority of IT job demands in China are focused on basic skills such as programming, but cloud and mobility will continue to drive IT employment for 2013.

Basic IT skills such as programming are highly sought after in China, but professionals with high-end skills are preferred in specific IT segments.

A spokesperson from Chinese job search site CJOL.com said that basic IT skills such as programming lead the demand in China. Citing statistics from its job board, she said companies looking for employees with basic IT skills account for some 70 percent of total advertisements.

Raymond Wong, general manager for IT and telecommunications (IT&T) at Hudson China, had a different view. He said cloud computing and mobile skills will continue to drive demand in the IT jobs market, while sectors such as big data and social network also have shown strong growth.

The CJOL spokesperson noted that cloud adoption has matured in China, so demand for IT professionals in this area will focus on high-end skills rather than the mid- to low-end talent pool.

"Currently, many large enterprises in China are researching cloud technologies or cloud-based services. Cloud computing has successfully moved beyond the internal IT system to become a public service, and has become a hot technology instead of an emerging technology.

"Experienced IT professionals are now beginning to move to cloud technology development," said the spokesperson. "We predict that demand for cloud computing professionals will grow in 2013."

She noted that business intelligence and big data are still new industries in China and will mature, though not reaching mainstream yet, in 2013.

IT job market slows in 2013

According to Wong, hiring expectations across all industries in China have dipped. "According to statistics in the Hudson Report, hiring expectation has fallen from 85 percent of employers willing to increase their headcounts in the first quarter of 2012 to 59.3 percent in this year's first quarter," he said.

Demand for IT&T professional is impacted as companies look to save budgets by cutting IT procurement. As a result, tech vendors will attempt to control cost due to unsatisfactory revenues, Wong said.

CJOL, however, is more optimistic for hiring activities in China this year. "Even though job demands after the Internet explosion have slowed, industries such as telecommunications, e-commerce, and enterprise applications have seen small increase in hiring," she said.

She noted the IT hardware segment will likely see another stage of development, which will lead to increases in average salary and demand for IT professionals in this market.

"In 2013, the IT industry will continue to see extreme polarization in IT talent," she added. "High-end IT professionals will [strive to] become more high end as demand [surpasses] supply, and their salary requirements increase. [The supply of] those with low-end skills will increase and [these professionals] will find it more difficult to find satisfactory jobs."

Mixed preference for local companies

In a previous ZDNet Asia report, a recruiter said Chinese top-level executives working for multinational companies (MNCs) are not given sufficient management power. This had led to some executives preferring to leave their MNC jobs to lead local startups where their skills would be appreciated.

CJOL's spokesperson said the high-level executives that the recruitment company spoke to expressed a preference to work in local companies. "The main reason for their limited management power in MNCs is the difference in cultural background and worldview between the Chinese employees and the foreign companies," she explained, but noted that this scenario is not commonplace.

High-level executives prefer staying in local startups because they put more importance on salary and career development, she added.

"A lot of local companies offer competitive salary and development platform when compared with MNCs, which decreases the attractiveness of [working for a] foreign company," the CJOL spokesperson said.

Hudson's Wong, though, holds a different view. He said the trend of employees preferring local companies is not common, although it surfaced during the IPO boom in China in 2010. He said the top three aspects of an employer that currently attract IT&T professionals in China are: salary, cutting-edge technology, and world-class brand.

Monster, one of the largest employment websites in the world, has sold the unsettled jobs listing website ChinaHR to IrishJobs.ie for an undisclosed amount.

The Irish Examiner has reported today that Saongroup, an international online recruitment business owned by Denis O’Brien and Leslie Buckley, has acquired Monster’s Chinese operation for $30 million.

Saongroup now has a 90 percent stake in the business, with US-based Monster holding on to the remaining 10 percent.

Saongroup already operates an online jobs listing service in 30 countries, including China, through the IrishJobs.ie website. Although by default it’s set to display jobs in Ireland, the company’s sister site features openings in Beijing, Shanghai, Tianjin, Guangdong and Chengdu.

Combined, Saongroup says its employment websites receive more than 25 million visitors each month.

Ciaran McCooey, CEO of Soangroup, told the Irish Independent earlier today that the acquisition would help the company build a greater presence in China’s major cities.

“It has really positioned us in the tier one cities of Beijing, Shanghai, Guangzhou and Shenzhen, the mega cities,” he reportedly said. “Our own business had a very strong presence in the tier two and three cities outside of that, but we weren’t servicing the tier ones. It gives us a pan China presence now, which is excellent.”

Saongroup’s total workforce will now increase to 3,000 as a result of the acquisition.

Tech In Asia has reported that between 2005 and 2008, Monster pumped more than $240 million into ChinaHR as it transitioned from being an initial investor to its owner. The $30 million figure – which hasn’t been confirmed by either party yet – therefore represents a significant loss for the company.

It follows reports that last week, ChinaHR laid off more than half of its Beijing staff after offering them what has been described as “a pretty generous severance package.” That didn’t sit well with the remaining workers though, igniting a protest at around 2pm in the afternoon. Tech In Asia said that the management staff sent by Monster to announce the layoffs hid in their offices until local police arrived to settle everybody down.

The cloud service provider has snapped up industry veteran Alan Perkins for a newly created role.

Hosting and cloud service provider Rackspace has appointed Alan Perkins as its director of technology and product for Asia-Pacific.

In this newly created role, the IT veteran will be spruiking Rackspace's open cloud standards model, designed to avoid vendor lock-in, on the back of growing cloud computing adoption in the region.

"This is an important time for the development of open cloud technology as Australian firms align to truly flexible computing models that will ensure they can perform with maximum agility in both the short and long term," Perkins said in a statement.

He will be based in Sydney, where the company recently set up its first Australian datacentre.

Perkins previously spent more than a decade with software developer Altium, and was the CIO there for seven years. He was a finalist for the IDC Asia-Pacific CIO of the Year award in 2009.

Perkins has over 20 years experience in systems analysis and design.

"At a time when cloud and hosting decisions are becoming increasingly important to business, it gives us tremendous confidence to know that we've got someone of Alan's diverse experience, leadership skills, and deep knowledge of technology on board," Rackspace Country Manager for Australia and New Zealand Mark Randall said in a statement.

Saongroup, the online recruiter majority owned by Denis O’Brien, has acquired Monster’s China operation, ChinaHR.com, for an undisclosed amount.

Monster Worldwide will retain a ten per cent shareholding in the combined China business of Saongroup and the agreement takes place with immediate effect. Monster had previously announced its intention to divest its operation in China.

Saongroup already has a comprehensive national network of offices and websites in tier two, three and four cities throughout China and the addition of ChinaHR boosts this network to almost 200 cities across the country, whilst also giving it a strong presence in the tier one cities of Beijing, Shanghai, Guangzhou and Shenzhen.

“ChinaHR is an excellent match with Saongroup China. Its blue chip client list and strong tier one city presence complements Saongroup’s robust online platform and pan-China reach. The acquisition of ChinaHR repositions Saongroup as a market leader and leaves us well positioned to accelerate our growth in the Chinese market.” said Ciaran McCooey, group chief executive officer of Saongroup.

Saongroup.com is a global online recruitment company with operations across four continents – Europe, Africa, Asia and the Americas – and websites live in 30 countries. Irishjobs.ie is its domestic trading entity.

Saongroup is 75 per cent owned by Mr O’Brien, with chairman Leslie Buckley owning the balance.

In late 2012 Chinese appliance and HVAC OEM Hisense began constructing what it said will be the world's largest research and development base, in Qingdao, China.

The new facility will carry out R&D across the gamut of Hisense industry technology. Its biggest global markets are refrigerators, air-conditioners, and TVs.

The new R&D facility will cover 430 acres and the company said it will have "tens of thousands of R&D employees."

The new facility replaces the company's existing R&D center on a 50-acre site in Qingdao. The company said the old facility, in a former Hisense factory, can't meet the demand of the company's rapid growth.

The company intends to attract global talent to staff the new facility, including through overseas recruitment, global cooperation, and acquisitions. In the last year, the company has acquired Canada's Flextronics, U.S.-based Archcom Chip, Huaya, Taiwan Laser, and others. It said dozens of technology leaders have already joined the company from the United States, Japan, and South Korea.

The new Qingdao base will serve as the hub for the company's global R&D network, which includes facilities in the United States, Canada, Germany, and seven other regions.