Recruiting in China

By Liu Jie (China Daily)

Angie Eagan admits she is good at solving problems, and as the general manager with the headhunting firm Hudson Shanghai she is helping multinational companies in China find the talent they need - a task that she also admits isn't always easy.

Hudson is a worldwide provider of permanent recruitment, contract professionals and talent management solutions worldwide.

With more multinational companies establishing and expanding their presence and more Chinese companies emerging, finding the right people to fill the right positions, especially at the leadership positions, is a challenge for any firm, according to Eagan, who has 20 years of experience in the field and has worked for 12 years in China.

"Multinational companies' (MNCs) expectations for the capability of their local staffers are much higher," says Eagan. "And many of them who have to localize their human resources management find getting the right people is not easy. Getting capable leaders is even more difficult."

Her conclusions come from study and research by Hudson, meanwhile, a series of surveys from other firms confirm the findings. A survey by the US-based management consulting firm Hay's found that finding the right people for leadership positions is the No 1 challenge for MNCs headquartered in Shanghai. It also conducted a survey on the Fortune Top 500 Companies, and 35 percent of the respondents said they believed recruiting and retaining capable senior executives with a global view and local knowledge is the toughest challenge.

Eagan cites an example. A senior executive whose company was a newcomer to China told her that his company's job description is one level, but he has to hire people one level down and pay them two levels up. That is because he cannot find people meeting his demands but must also have somebody to support the group's establishment and expansion here.

"This is the talent shortage in China. It's truly a candidates' market right now," says Eagan.

Faced with the challenge, companies have shifted from being willing to continually hire to caring more about how retaining and training their employees.

Eagan specifically mentions the talent shortage in the middle and senior levels.

She says there is a lot of stress on executives for several reasons. One is that many managers are filling positions for which they are not trained, experienced or capable.

Second, companies are often growing quickly in China and even if some leaders are capable, their duties expand with the growth. If the company has trouble finding filling new positions, the managers end up doing two, or even three, jobs.

According to Eagan, people that MNCs need most are those who can meet with their levels and who will be leading their local companies within five to 10 years.

When a MNC wants to build its business in China, what it is really looking for are potential leaders, who learn the company's business, and culture and are able to teach other people.

"Those are the most difficult people to find right now, what we called like the second-line managers," Eagan says.

Basic characteristics

There are a few dynamics really important for business leadership in China. One is an ability to build strong business partnerships, which includes building partnerships with the government.

"This is something you might not do in another area of the world, but here you should think about your relations with the government and what you can do to aid the society," says Eagan.

Companies also have to work with suppliers and customers - as well as sometimes with competitors - so partnership building is very critical.

Furthermore, a leader should have clear vision and sense of purpose, because there are so many unexpected, frequent changes in China that a business leader needs to be able to clearly articulate his or her direction.

A leader also needs to manage change and be able to put the steps in place to help people and encourage them to all move in the same direction.

"If you don't change your company under these market dynamics, it means your company probably dies," she says.

A corporate leader in China should also be really resilient, she says.

"If you hit a wall, you don't fall back and say 'Oh, no', you just stand there and ask yourself, 'Yes, how do I go around it, how do I go over it?' says Eagan, adding that a leader has to be somebody who can absorb negative experiences and keep going.

Solution

As one of the world's leading executive recruitment and related consulting services firms, NASDAQ-listed Hudson has over 148 offices in more than 20 countries and regions and 3,600 staff worldwide with 1,500-plus in Asia Pacific. Its revenue exceeded $1.4 billion in 2006.

Entering China in 2000, the firm has three offices under two brands in China: two Hudson offices in Shanghai and one in Hong Kong called Tony Keith which is in IT recruitment and acquired by Hudson last year.

Eagan says her pride in Hudson China comes from "exceptional people". There are about 180 staffers in its China offices aged mostly 33 to 35. More than 90 percent are local consulting talents.

"We value our people, who are really good and professional," say Eagan, adding that Hudson cares great deal about training and growing its people.

The firm has a large database, a professional research team and senior consulting service talents.

Consultants work with researchers to make sure they get the full picture of the industries that are looking for employees. Then they interview candidates, offering reports and suggestions for the clients. They negotiate with the clients and candidates on salary packages, positions and contracts. Ultimately they help the two sides seal contracts and related agreements.

"We typically run all process within four months, it's very fast (compared with the average industrial level)," says Eagan.

To help retain and grow talent, Hudson has a talent management division to identify and train leaders and future leaders to take senior positions within three to four years.

Firms anxiously seek those with global expertise
Susan Fenton, Reuters
Published: Monday, May 26, 2008
American-born Thomas Kwan's career has taken off since he moved to China to work as the country manager for a U.S. health products company.

"If I'd stayed in the U.S. I wouldn't have had the same opportunity for advancement," said trilingual Kwan, 46, who was brought up in a Cantonese-speaking household in Virginia and also speaks fluent Mandarin and, of course, English.

"The U.S. is still a Caucasian-dominated society," added Kwan, who now lives in Shanghai.

Job fairs in China are one way for companies there to try to fill a void for managers with both Chinese language skills and international exposure.

China's rapidly expanding economy has created a seemingly insatiable appetite for Chinese-speaking managers.

Yet even though three million university graduates enter China's workforce every year, multinational companies are finding it hard to find local talent to meet that demand.

Companies that are successful in luring top-notch recruits are at an automatic advantage in the race for a piece of China's $1.3-trillion US consumer market.

But competition for good quality hires, especially experienced managers, is fierce.

Companies in China will need 70,000 middle and senior managers over the next five years, according to executive search firm MRI Group, but they are unlikely to find them.

"We'll be lucky if we can identify 50 per cent of that number," said Erica Briody, director of MRI China.

Since last year, Pricewaterhouse Coopers has posted Chinese recruiters in the United States, Britain and Australia to scout for graduates at university campuses as they seek to keep pace with business growth in China by recruiting 3,000 people a year.

They are targeting Chinese students studying abroad, as well as experienced foreign professionals with a Chinese heritage, such as Kwan.

"The economic boom in China means the talent needs are demanding. We are building a talent pipeline for the future," said Angela Jiang, a PricewaterhouseCoopers recruitment manager based in New York and responsible for finding U.S.-based talent for the firm's China operations.

Recruiting qualified Chinese-speaking managers is crucial for firms, especially multinationals, as they seek to capitalize on business opportunities in the world's fastest growing major economy.

"Multinational companies are looking to China to grow their organizations," said Briody.

"If they can't get the talent, their expansion plans will be limited. Ultimately they can't be competitive."

A report by the McKinsey Global Institute in 2005 said fewer than 10 per cent of China graduates who applied for jobs at multinationals had the right skills and qualifications to work there. Poor English was the main shortcoming.

The Asian Development Bank in its 2008 Asian Development Outlook says the skills shortage is aggravated by China's failure to produce the right kind of graduates rather than too few.

Chinese graduates may be well versed in theory but often lack practical problem-solving skills, analysts said.

"While the root cause of China's skills crisis lies in the leap in demand for skills, the education system has failed to keep pace," the ADB said in the report.

Kwan, who has been in China for four years, says his understanding of Chinese culture is as invaluable as his linguistic abilities when it comes to managing his China team.

"Here, I am bicultural. I understand that Western culture and Chinese culture are different and that Chinese don't normally speak out," he said.

"A lot of expat managers fail in China because they don't understand that Chinese don't tell you what they think."

China's Huawei Technologies, a leader in providing next generation telecommunications network solutions for operators around the world, is seeking to expand its services to become a dominant player in telecom services in East Africa.
The telecom firm which is marking its 10 years of business in East Africa said its expansion is in line with Huawei's strategy to expand its regional network by offering customer's specialized service and engineering teams to respond promptly to customer requirements.

The telecoms company has had exceptional growth in the region since it began operations in 1998 in Kenya and become the largest CDMA product provider in the region.

Speaking during celebrations in Nairobi on Tuesday night, Huawei Kenya CEO Herman He said the company first tapped into East Africa market with its cutting-edge technology and top-ranking services.

He said Huawei, together with African operators, has built a comprehensive communication infrastructure, enriching the life of African people due to diversified communication services offered by the telecom company.

"Based on our equipments and solution, Kenyans enjoy various quality and affordable services, including value added service, voice over Internet Protocol (VOIP) and broadband service through NGN, CDMA and 3G," said Herman.

Herman noted that some of the leading telecommunication companies such as Kenya's Safaricom, Celtel Kenya and leading fixed-line incumbent Telkom Kenya have benefited from Huawei' s advanced technology, reliable products and quality service.

"In Kenya, Huawei is the major supplies of optical transmission network of Safaricom, and have offered it high speed wireless internet access service of 7.2Mb through leading 3G solution in Nairobi," he said.

"We have also successfully built Telkom Kenya's National CDMA wireless, as a end to end solution, we also provide Intelligent Network, NGN, Data Communication," he said.

Herman said Huawei will never stop its efforts in providing timely response, proficient service and customized service portfolio.

The Chinese company has created more than 400 jobs both directly and indirectly in Kenya while it has employed over 3,000 employees in the sub-Saharan Africa.

Joe Deng, Huawei's East Africa President, said the firm has invested about 1 million U.S. dollars in Kenya to establish a fully furnished training center with the latest and best equipment to train local customers, partners and their staff in the latest communication technology.

"Huawei East Africa has long-term strategically plan to invest in Kenya and become 100 percent Kenyan company. Area of investment will cover social responsibility, environmental awareness, technology education and knowledge transfer as well as enriching Kenyans life through communication, Deng said.

Huawei Kenya, with around 65 percent Kenyan employees, is a registered local company. It is the headquarters of East Africa, serving other branch offices including Uganda, Tanzania, Congo, and Ethiopian among other countries.

"We constantly update our customers on the latest technological developments which allow them to make informed decisions for their organizations and customers. In 2008, we will strengthen our investment in wireless terminals, as well as research and development," said Deng.

The Chinese company was the first to introduce next generation telecommunication technologies in Africa such as UMTS/WCDMA, WiMAXand CDMA EV-DO and services mainstream mobile operators such as Vodacom, Orange, Telkom, MTN, Milliccom, Celtel and Safaricom among others.

AMMAN, June 1 (Xinhua) -- Haier, one of China's Top 100 IT Companies, launched its first after-sale services center in Jordan, in an attempt to extend more extensive technical support to its Middle Eastern customers, an official with the company told Xinhua on Sunday.

Yan Xuhong, General Manager of Haier Middle East, inaugurated the center and affirmed that it would provide fast and reliable services to its customers and clients.

The center, with the latest technical equipment, is run by a number of specialized electronic and technical engineers who have undergone extensive training in the mother company, Yan said.

As part of promotion, Haier has offered a two-week of free charge maintenance and repair of all Haier products, according to Yan.

Haier, the world's fourth largest white goods manufacturer, specializes in technology research, manufacture industry, trading and financial services.

Haier has 240 subsidiary companies and 30 design centers, plants and trade companies and over 50,000 employees throughout the world. It registered a global revenue of 107.5 billion RMB (about 15.4 billion U.S. dollars) in 2006.

Hong Kong - Employees worldwide desire the protection of lifetime employment, a so-called “iron rice bowl” that can never break, and can’t be taken away. But in China it’s this very kind of lifetime employment that airline pilots are trying to end. One problem, though, is that even when pilots succeed at leaving their jobs they can be forced to pay vast sums to employers on the way out.

In recent months the grievances of Chinese pilots have received wide-spread publicity due to strikes staged against their employers, and the unfair treatment they have received in the newly-liberalized aviation industry.

Adding insult to injury, a slew of court verdicts has ordered the pilots to pay millions to terminate their employment contracts.

On Thursday, Air China agreed to let six pilots in its Zhejiang branch go, but only after it knew it would collect between 1.29 million yuan ($185,612) and 1.7 million yuan ($244,604) from each, in a closely-followed dispute. Two months ago one Air China pilot fainted upon hearing a verdict that ordered him to pay 2.1 million yuan ($302,158) for his resignation.

Also, Chinese pilots have seen their careers suspended and salary halted for up to three years as local courts dealt with their resignations; the airlines inevitably sought legal protection, citing the vast sums they invested in training the pilots. Worse, the law is on the airlines’ side: resignations from Chinese pilots are effective only if their employer agrees to it.

The problem is that the Chinese government controls all four major airlines—Air China, China Southern, China Eastern and Hainan Airlines—and keeps a tight leash on pilots, in much the way it runs the military. In fact, Chinese airlines enlist pilots from the military. This is despite 2004’s market liberalization, which allows small privately-run airlines to set up shop, and compete.

A boom in China tourism also creates an acute shortage for pilots, making them too precious a property to lose. Despite this, pressure from long working hours, intense overtime, and laxness in management and safety issues arising from recent consolidation has prompted an exodus of pilots from the state-owned sector to small, privately-run aviation startups.

Short of resignation, Chinese pilots have sought to get attention through strikes, mass sick leaves, and hunger strike. In one extreme maneuver, on March 20, China Eastern Airlines pilots disrupted 31 flights by flying back to their take-off point, just minutes after departure. The pilots were unhappy about a new, high tax on a formerly tax-free portion of their income and for being put under the loss-making Shanghai parent airline after a 2004 nationwide industry shakeout..

While almost all Chinese state-controlled airlines have disgruntled pilots, loss-making airlines based in Shanghai seem to have particular problems. A branch there was blamed for three waves of mass resignations since 2004 and in one tally, more than two-third of a 70-plus pilot team had tried to resign.

Multinational companies' (MNC)'s hiring expectations have largely declined in the second quarter, after sustaining a high level for a long period, but are rising in some sectors, a recently released human resources (HR) report said.

However, most respondents of globally leading recruitment and HR management firm Hudson's survey remained optimistic, saying they considered an imminent recession in China's employment market unlikely.

The global Hudson Hiring and HR Trends Quarterly Report surveyed 718 executives of MNCs in China from sectors including banking and financial, IT and technology (IT&T), manufacturing, consumer, and media, public relations and advertising.

It said overall hiring expectations in the emerging market are declining, with 52 percent of respondents expecting to increase headcount, compared with 61 percent in both the previous quarter and the corresponding period of 2007.

The report also found 14 percent of respondents in China expected the country would face a recession in the next six months - fewer than in any other Asia market surveyed. In Japan, for example, 41 percent of respondents believed a recession was imminent.

Of those anticipating a recession in China, 73 percent believed it would impact their industries.

At 57 percent, the banking and financial services sector reported the highest hiring expectations - although 12 percentage points fewer than in the first quarter.

Some banks are more cautious in their hiring projections, particularly in the consumer-banking sector, where they haven't yet obtained all required licenses, Hudson's Shanghai General Manager Angie Eagan said.

Employment expectations are rising in the media, public relations and advertising industries, where 55 percent of respondents forecasted headcount growth, compared with 47 percent in the first quarter. Many agencies started hiring after Chinese New Year, when clients had finalized their marketing budgets.

The IT&T segment also reported rising expectations, with 55 percent of respondents saying they will hire more staff - compared with 50 percent in the first three months of 2008. The sector remains buoyant as companies continue localizing IT operations.

Manufacturing companies' expectations increased slightly, with 53 percent planning to increase hiring, compared with 51 percent in the first quarter. Construction of MNCs' new manufacturing facilities in China is mostly driving demand for workers.

Expectations underwent the steepest fall in the consumer industry, plummeting to 45 percent from 72 percent in the first quarter.

Hudson said many companies in the sector have been expanding headcount for a long time and have by now filled most positions, ushering the industry into a consolidation phase.

Recession doubted

Only 14 percent of respondents in China forecasted a recession in the next six months, reflecting the country's economic buoyancy. Responses from China were fairly consistent across industries on the issue, although at 21 percent, those from the IT&T sector were most inclined to expect a recession.

"This may reflect a continuing caution in the wake of dotcom failures, as most companies in this sector are busy and are recruiting additional staff," Eagan said.

Most firms would adopt headcount freezes in a recession, with 84 percent of respondents saying they would use the policy to weather the tough times.

Use of salary freezes was the second most-frequently mentioned recession-survival method, with 35 percent of respondents in China saying they would use the policy - more than in any other surveyed Asia market. Firms in China were also the most likely among those surveyed on the continent to cut training in the event of a recession, a measure 18 percent of respondents mentioned.

Media, public relations and advertising firms were particularly reluctant to cut staff, with just 15 percent mentioning the option. However, they were most likely to freeze headcounts and salaries, at 94 and 48 percent, respectively.

At 33 percent, banks were the most likely to cut staff in a recession, as high salaries are typical in the industry.

Firms in the IT&T sector were most likely to cut training, with 44 percent of respondents mentioning the option. "Technical training can be very expensive in China," Eagan said.

HR challenges

As in the other surveyed Asia markets, "hiring the right staff" and "retaining talent" remained the most critical challenges.

Across all sectors, 48 percent of respondents said recruitment was the greatest challenge, while 27 percent said retention was.

Compared with other surveyed markets, respondents in China most emphasized recruitment over retention. The country also had the highest percentage of firms identifying recruitment as the greatest challenge and the lowest identifying retention.

At 65 percent, the media, public relations, and advertising sector had the most respondents identifying hiring the right staff as the greatest challenge. The market for talented professionals with relevant experience has remained tight, especially at senior levels.

Retaining talent is a major concern for the banking and financial services and the manufacturing sectors. In the banking and financial services sector, 30 percent of companies identified this as their most critical challenge, as did 28 percent in manufacturing. Currently, companies in both sectors are focusing on retaining high performers with specialized skills.