Recruiting in China

HSBC (0005) says it has no plans to lay off staff in Hong Kong. The assurance comes one day after the lender said it was axing 1,700 employees in Britain.
"It's really the British side's affair," said Vincent Cheng Hoi-chuen, chairman of local arm Hongkong and Shanghai Banking Corp. "The European economy is not faring well, so it's not surprising to have positions reduced or natural wastage to compete better."

Cheng said in Hong Kong the bank has been recruiting staff, especially for frontline jobs.

HSBC sacked some 650 workers late last year and early 2009 when the global financial crisis began to bite hard, but hired 100 people in August.

And its insurance business said earlier this week it is hiring more financial services officers. HSBC will continue its Asian expansion while maintaining its present scale of its business in Britain, Cheng said.

UK rivals Royal Bank of Scotland and Lloyds Banking Group received bailouts totaling 46.5 billion (HK$595.11 billion) from the British government, but Cheng said HSBC is not facing any financial pressure.

He added the US$18 billion (HK$140.4 billion) raised from a rights issue earlier this year has yet to be used.

Cheng refuted claims that a 508 million yuan (HK$576.63 million) premium HSBC paid for its joint venture with the Bank of Communications (3328) is unfair, saying the local lender is very positive about its partner's credit card business development in the mainland.

Cheng believes recent moderate property price adjustments have not affected HSBC's mortgage business, adding more affordable homes may even give it a boost.

Employees in China’s richest city, Shanghai, saw salaries stagnate this year – at least compared with what they have grown used to.

They can’t expect much of a pick-up in 2010 either. Perhaps worse for many Shanghai workers used to ever-upward mobility is that its people will do merely as well as the rest of China.

Human-resources firm Hewitt Associates LLC on Thursday predicted average annual salary increases will be 7% in 2010, about equal to what is expected nationwide.

That won’t necessarily make things comfortable for employers. Hewitt’s Shanghai Compensation and Benefits Study concludes that for employers, it will be back to the challenge of hiring enough good workers: “In order to hire more talent, enterprises have put salary increases on the agenda.”

The study, which included 911 enterprise participants, shows the average annual salary increase in 2009 in Shanghai was 5.2% in the non-manufacturing sector and 5.4% in the manufacturing sector, about half the 11.2% and 10.1% increases seen in those sectors in 2008. The average lagged the national level of a 5.8% increase in salaries in 2009.

“As an international financial metropolis, Shanghai is inevitably influenced by financial crisis,” the firm said.

Rather than layoffs, it found salary freezes in Shanghai this year. The voluntary rate of turnover – job-hopping – slid 3.4 percentage points in 2009 to 13.9%, the firm found.

The employees still commanding good increases this year: pharmaceutical and medical-device firms, up 8.9% and 9.1% respectively.

The market for new job seekers was tougher than ever. The average starting salary for a fresh university graduate was 45,153 yuan ($6,615) this year, while post-graduates could earn 63,732 yuan.

Separately, Standard Chartered Bank economist Stephen Green, in a report Thursday, takes issue with the conclusions reached in China’s effort to track urban private sector wages. He said the National Bureau of Statistics study probably captures only about 42% of the nation’s 450 million workers. Since the ones missed are likely lower-paid migrant workers, the official statistics probably overstate actual wages, said his report.

Mr. Green puts the urban wage at 1,476 yuan a month, compared with the government’s estimate of 2,077 yuan.

Many workers in Guangzhou are facing salary cuts or job losses, as both the private and the public sectors struggle in the midst of the economic crisis.

As many as 40 percent of the State-owned enterprises (SOEs), or government-controlled shareholding companies, have reduced or plan to reduce staff salaries in the prosperous southern metropolis, according to a recent survey conducted by Guangzhou Urban Survey and Research Center.

More than 50 percent of the city's privately-operated companies have cut jobs in the past months, according to the survey.

But less than 10 percent of the Party and government departments and bureaus have cut staff or reduced salaries.

"Many SOEs have run into difficulties this year because of the worldwide financial crisis," said a manager from a local SOE yesterday.

Requiring staffs to increase their days off, limiting overtime working hours, reducing salaries and cutting staff have become common measures to fight the financial crisis, said the manager who declined to be named.

"I hoped all the staff can join hands with us to conquer the difficulties," he added.

More than 83 percent of Cantonese people said their lives have been affected by the financial crisis in the past months, the survey showed.

Only 16 percent of the interviewees said their lives have remained unchanged under the economic slump.

And more than 78 percent of the interviewees are cautiously optimistic about salary increases in 2010.

The survey interviewed 1,016 residents in the city's downtown districts of Yuexiu, Liwan, Haizhu, Tianhe, Baiyun and Huangpu in September.

Chen Zhaomin, a staffer from a logistics company, said his monthly salary has not been reduced, but all his allowances for travel, telecommunication and entertainment have either been cancelled or sharply reduced.

"And I have not worked any overtime this year, because my boss cannot pay me overtime," Chen told China Daily yesterday.

Chen estimated his annual income would decrease by about 20 percent this year.

And Wang Cuihong, an accountant from a private firm, said that since the beginning of the year her company has forced staff to take an additional 20 days off every six months.

Also, the staff are usually given only 20 percent of their wages when they are on holidays, Wang said.

Affected by the income reduction, Wang and her family have cut daily living expenses by at least 10 percent this year, she said.

Wuxi, a picturesque city that lies along the Taihu Lake resort, is planning to build a "little India" in years to come.

Wuxi is traditionally a manufacturing city. But with more focus on environmental protection, especially after a serious blue-green algae outbreak in Taihu Lake that triggered a clean water crisis in mid-2007, city leaders started to study how to transform the city's development.

Wuxi decided to replace manufacturing with the service outsourcing industry, which has far less pollution and consumes much less energy.

According to its ambitious development plan, the city is expected to attract $30 billion to $40 billion in service outsourcing business and help create service outsourcing jobs for 1 million people by 2020 - equivalent to that of India as a whole in 2007.

The advancement of the service outsourcing industry cannot survive without a large talent pool.

But the city three years ago learned that fewer than 2,000 students in the city were studying software and information technology fields.

As a result, Wuxi established a goal to build a total area of 6 million sq m for software service outsourcing within three years, and encouraged enterprises to cultivate and import skilled workers.

These policies were well received. In 2008, Wuxi's service outsourcing business accounted for 39.2 percent of companies in Jiangsu province, and the city employed 28.5 percent of Jiangsu province's service industry employees, according to Fang Wei, deputy mayor of Wuxi.

Growing jobs

This year, the Wuxi government launched a new program to train university graduates. Outsourcing companies will receive a rebate of 4,000 yuan ($586) for hiring a graduate, and every graduate of the training program will receive 1,000 yuan as a subsidy.

The city's financial sector is also actively providing financial support to enterprises in the service outsourcing industry.

In February, Wuxi became one of 20 cities approved by the General Office of the State Council to build a service outsourcing demonstration city.

In June, 15 banks provided a credit line of more than 4 billion yuan for the city's 115 service outsourcing enterprises.

The local government joined India's National Institute of Information Technologies (NIIT), the world's second-largest educational institution, to establish the NIIT (China) Outsourcing College in Wuxi as a training base for the city's outsourcing businesses.

While the domestic macro-economy continues to be affected by the global financial crisis, outsourcing is maintaining robust growth in Wuxi.

The city signed $1.14 billion in contracts from January to July, up 110 percent year-on-year.

Experts estimated that by 2010, there will be as many as 100 international service outsourcing and software exports enterprises with annual export values of as much as $30 million.

So far, Wuxi has attracted 22 investment projects from leading multinational service outsourcing corporations and 50 domestic industry heavyweights. Half of China's top 10 industry heavyweights have established headquarters in Wuxi.

But Fang is looking at bigger goals. "Wuxi is on its way to becoming a 'little India'," he said.

After India matured as the world's largest service-outsourcing base, many East Asian countries - including the Philippines, Singapore and Vietnam - began competing for more market share.

"Enterprises from the Chinese mainland haven't had much advantage in competing with these countries, but the cooperation across the Straits should bring some opportunities," said Zhou Ming, deputy director of the China Council for International Investment Promotion (CCIIP).

The service sector accounts for more than 70 percent of the island province's total GDP.

Zhou said Taiwan's industrial development experience, technology and branding, along with a massive market and substantial human resources on the Chinese mainland, will greatly enhance the international competitiveness of both regions.

In spite of the financial crisis, the global service outsourcing industry posted a growth rate of 6.3 percent in 2008 - a strong performance in comparison to the world's average GDP of 2.5 percent.

Many developing countries see the outsourcing industry as an opportunity to survive the international economic downturn, experts said.

TAIPEI, Taiwan -- Taiwan's jobless rate dropped to 6.04 percent in September, 0.09 percentage points down from a record high recorded in the previous month, the Directorate General of Budget, Accounting and Statistics said yesterday. However, the seasonally adjusted rate hit a record high of 6.09 percent, up from the 6.07 percent recorded in August, the agency said.

In September, the number of unemployed people totaled 661,000, down 11,000 from the previous month, when a record 6.13 percent was recorded, due mainly to new graduates flooding the job market.

According to the results of a survey released Thursday, some 48 percent of the people who lost their jobs over the past year did so involuntarily, and the unemployed were jobless for six months on average.

The results of the survey conducted Oct. 8-21 by the online human resources company 1111 Job Bank show that 21.34 percent of the unemployed were jobless for more than a year, 12.23 percent were jobless for two or three months, and 11.03 percent took one month to find a new job.

An executive in charge of public relations at 1111 Job Bank attributed the high ratio of long-term job seekers to their lack of ability, their slim competitive edge and their unrealistic expectations of their prospects.

The number of job applications sent out by each unemployed person averaged 81, for a total of just six interviews, according to the survey results.

Since July, the number of jobs has been increasing month by month , but with the influx of large numbers of new graduates into the job market, the unemployment situation has not improved much, according to the executive.

A total of 1,431 valid samples were collected for the survey, which had a margin of error of 2.24 percent and a confidence level of 95 percent.

Almost half of new expatriates leave China early because they have difficulty adjusting to the lifestyle, a consultancy firm said.

China Transition Institute (CTI) president David Israel-Rosen said most foreigners are unprepared for what life will be like when they arrive in China.

"It is moving from the West to the East," he said. "It is not like moving from Chicago to Denver."

"If you look at the literature, between 30 percent and 50 percent of expats go home early. The failure rates are astonishing."

Alan Kahn, vice president of marketing and communications for United Family Healthcare, said identity loss and depression are more widespread than many people realize.
"These are very real issues and they do have a significant impact," Kahn said. "It is very hard to ever fit in fully and that can cause lots of serious problems," he said.

Jessa Parkman, a 28-year-old nurse who recently arrived in Beijing from Baltimore said she misses her family and is worried about losing job skills she spent years acquiring if she cannot find a similar position here in Beijing.

"It is very debilitating to be at home and not be so independent," Parkman said. "I just feel very helpless at times and very dependent on other people. It is a struggle to get my bearings."

Last Saturday, Parkman and her husband attended expat boot camp, which is run by the CTI, and offers basic survival training for expatriates.

Cheryl Smith, a psychologist with International SOS China, said spouses of executives who have been assigned to China can have the hardest time adjusting.

"They feel a big emptiness and imbalance," Smith said. "I see a lot of alcoholism with expat women. I see a lot of depression. I see anxiety disorders and lots of marital issues."

"There are many who have marital issues," Smith said. "They don't have enough time with their partner and there are also lots of infidelity issues that I see."

Jasmine Keel, managing director of Inspired, a Beijing-based life and transition support company, said it is important to find an outlet for frustrations.

"It is hard when the spouse used to have a very strong professional identity. Maybe she was working so she had a professional world. Maybe she also had a very strong circle of friends so basically when she moved a lot of the world that she had disappeared," she said.

Helen Zhang, co-author of "Think Like Chinese," which explains Chinese thought and business culture from a Chinese perspective, said: "When you communicate with the Chinese, if you are open-minded and observant, there are clues you can pick up".

"There are many ways for Chinese to say 'no' even including 'yes,'" Zhang said. "We think totally differently."

Israel-Rosen said the CTI would expand the workshop to a week-long boot camp offered in a number of Chinese cities as well as abroad sometime early next year.

"There is nothing fancy about what we are talking about," Israel-Rosen said. ""We are talking about basic survival."

Source: China Daily