Recruiting in China

Sun Minjie, executive vice-president of Bank of East Asia in Shanghai, was happy that he didn't have to offer too much money to find suitable staff for the newly opened Qingdao branch a year and half ago. An auditor he poached from an accounting firm in the city demanded only 5,000 yuan ($714.29) a month, compared with about 30,000 yuan for someone with equivalent experience and qualifications in Hong Kong.

Last month, that person quit to join another bank in Shanghai although Sun tried to keep him by hiking his monthly pay to 25,000 a month.

"What a difference 18 months made," sighs Sun. But this is far from being a unique case. Job-hopping has become common among the local staff of foreign banks and other financial institutions.

"There are many cases like this one (among foreign banks in China)," says Sun.

The fight for qualified talent in the financial sector, especially in Shanghai, has initialized a massive restructuring of executive pay scales that are extending to many other sectors.

Following the full opening of the nation's banking sector in late 2006, overseas lenders are embarking on a rapid expansion in China, but the race for qualified and experienced workers might slow their pace.

In a survey by PricewaterhouseCoopers last year, 40 overseas banks polled said that finding and retaining good personnel was the second-most difficult job in the Chinese banking industry.

Twenty-five banks will more than double their China staffs by 2010, according to the survey, while six plan to add more than 1,000 employees over the next three years, and three will hire 3,000 people.

Of the 40 banks that polled, 35 percent recorded annual staff turnover rates between 15 and 20 percent. Only a small group of large international banks have been able to keep that rate below 5 percent.

It's not hard to find someone with lower qualifications in the market, Sun says, though what the overseas institutions really need are experienced and trained workers to support their rapid growth.

Yet for large international banks, frontline workers are among the most needed. But rather than an ample supply of young graduates, experienced people are what banks really need because they are supposed to work in a sector that not only stresses innovation but also risk management and control.

"There is an escalating need for staff, especially frontline workers, to support our fast-expanding retail banking business," says Paula Ko, head of human resources at Standard Chartered Bank (China) Ltd.

"The demand is so fast and huge, and happens across the country," says Ko, whose bank doubled its China staff from about 2,000 in 2006 to its current 4,000.

To handle the need for proper personnel, the London-headquartered bank has transferred some workers from its corporate department to retail banking.

But for the long run, Standard Chartered's China consumer banking head Christine Ip says the bank will rely on both campus recruitment and poaching from the market.

In addition to those who have direct contacts with the customers, skilled personnel are acutely needed for new businesses that foreign banks are carrying out, bankers say.

Personnel familiar with wealth management, private banking, credit cards and treasury departments are all needed.

HSBC, one of the largest financial groups in the world, made the race for private banking professionals more intense by launching offices on March 31 in Beijing, Guangzhou and Shanghai.

The bank expects to grow the number of its private banking managers from 9 - all local Chinese - to 18 by the end of the year, and to about 40 shortly after that.

What HSBC needs are mature, intelligent professionals who have a lot of networks in China, says Yvonne Hsin, deputy chief executive of HSBC's private banking for Asia.

Declining to comment on how much the bank is willing to pay or at what the talent shortage in China is costing the bank, she only says HSBC will stick to "benchmark prices" on the market and stresses that people the bank hires will be trained in both China and overseas.

Foreign institutions are taking steps to find and retain their best employees with diversified recruitment drives and significant salary boosts.

Standard Chartered keeps a close eye on salary fluctuations in the job market to keep salaries for its own employees competitive.

It has also diversified approaches to recruit candidates from universities, head-hunting agencies and job fairs, while enlisting the ones recommended by colleagues and people from outside of the banking industry.

At smaller overseas banks, which are at a disadvantage when competing with larger rivals, measures are being taken to counter the personnel gaps on the Chinese mainland.

"It is critical to build a pool of talent as we grow our business in China," says Leong Wai Leng, chairwoman of OCBC China, a Singapore-based bank.

"People are our most valuable asset."

Aiming to grow its China staff from 300 to over 1,000 by 2010, OCBC uses a three-prong approach to attract and retain talents.

For starters, the bank recognizes and rewards employees for outstanding performances, as well as grooming them for leadership roles in the bank.

"Our compensation package is geared towards rewarding our high performers through differentiated incentive compensation schemes, where we offer our high performers performance-based bonuses and various other incentives in addition to the market-oriented and competitive base pay," Leong says.

To attract employees, OCBC started several programs to allow employees to pursue a career in different divisions in order to help employees evaluate their strengths during their first 3 years with the bank.

The increase of actual use of foreign investment in China's western regions exceeded the nation's average by 128 percentage points in the first two months this year, said an official of the ministry of commerce on Sunday.

During the first two months, the western regions' actual use of foreign investment was 1.393 billion U.S. dollars, more than double over the same period of 2007. A total of 254 foreign companies were approved to invest in the region, said Ji Xiaofeng,a ministry official in charge of foreign investment management at the ongoing 12th Investment & Trade Forum for Cooperation between East and West China.

Ji attributed the increase to the nation's encouraging policy for foreign investment to the middle and western regions. She said the ministry was advocating a transfer of foreign investment from the eastern regions to the western areas and encouraging local governments to use the investment in an innovative way.

She said the ministry would continue improving regulations on foreign acquisition and merger and establish an anti-dumping investigation mechanism. Foreign investors would be welcome to participate in reforms of state-owned companies.

According to statistics available, a quarter of the nation's tax revenue came from foreign invested companies at present. By the end of Feb., the number of foreign invested companies accumulated to 637,000 nationwide and the amount of the actual use of foreign investment reached 781.1 billion U.S. dollars.

During the first two months, 4,372 foreign investors came to China and the actual use of foreign investment rose 75 percent to 18.1 billion U.S. dollars.

BEIJING, April 7 -- Chinese graduates engaged in the financial industry were the best paid last year, according to ChinaHR.com, the country's leading job-hunting Web site.

The financial industry tops the best paid list for university graduates, with an average annual income of 58,388 yuan (8,322 U.S. dollars) in 2007, followed by the IT and the medical industries. Insiders say that although the phenomenon is linked to last year's stock market boom, it largely stems from the financial and information industry's traditional place as high-salaried industries.

According to the report's regional breakdown, the annual income for Shanghai graduates fell to 37,007 yuan (5,275 dollars) in 2007, but this was not enough to topple Shanghai from the number one spot for high paying cities, followed by Beijing, Shenzhen and Guangzhou.

Salaries for graduates from junior colleges sustained a marked decline from 2006 to 2007, decreasing by 23.86 percent. On the up side, salaries for graduates with doctor's degree rose by 18.93 percent. Analysts say that the increasing corporate demand for doctoral graduates has driven the increase in salary.

Sound corporate performances and raised lowest salary levels lifted the average salary of China's employees working in cities and towns approach 25,000 yuan (3,561.3 U.S. dollars) in 2007, up 18.72 percent over the previous year, the biggest rise in the past six years.

According to the year's No. 1 statement released by the National Bureau of Statistics (NBS) on Tuesday, the average salary increase hovered around 14 percent from 2001 to 2006. The 2007 average salary of urban workers was 24,932 yuan and the daily average was 99.31 yuan (14.15 U.S. dollars). Taking into account price rises, the average salary increase hit a six-year-high.

The average salary comprises the basic wage, bonus and all allowances and subsidies. It is often used as a reference by the government for nailing down the lowest salary standards and calculating social insurance premiums.

Analysts attributed the rise to strong corporate revenues and raised lowest salary levels across the nation.

According to statistics available, large state-owned enterprises chalked up an accumulative profit up to 2.3 trillion yuan (327.6 billion U.S. dollars) from January to November last year, up 36.7 percent over the corresponding period of 2006. Private enterprises enjoyed an even larger profit growth of 50.9 percent.

The average of the nation's lowest salary standards, which vary between provinces, rose by 30 to 64 percent in 2006 from two years earlier.

Last year, the average salary in Beijing reached 39,867 yuan (5,679.1 U.S. dollars), trailing those in Shanghai, Guangzhou and Shenzhen which all exceeded 30,000 (4,273.5 U.S. dollars).

Salary gaps still existed. In Beijing, people working in industries such as securities, banking and air transport obtained more than 100,000 yuan (14,245 U.S. dollars). While workers in the textile and agriculture industries had less than 20,000 yuan (2,849 U.S. dollars).

Even in the same industry, salaries are widely divergent. For instance, the highest average salary of employees in Beijing's securities companies exceeded one million yuan (142,450 U.S. dollars) while the lowest was less than 40,000 yuan (5,698 U.S. dollars).

Analysts said the nation's average salary pattern among industries was similar to that of developed countries. Transfer of human resources promoted by market forces would help reduce salary gaps but the current corporate governance and personnel management policies had crippled the market's role.

HONG KONG, April 2 (Reuters) - Baidu.com Inc (BIDU.O: Quote, Profile, Research) has poached Apple Inc's (AAPL.O: Quote, Profile, Research) former China head for the role of chief operating officer, the latest high-level executive shuffle at China's largest search engine firm.

Peng Ye, who oversaw all business operations in China for Apple as the U.S. firm's country general manager, joins Baidu on the heels of the appointment of ex-General Motors (GM.N: Quote, Profile, Research) executive Jennifer Li to the post of chief financial officer. [ID:nSHA340039]

Ye's posting takes effect April 25.

Baidu maintains an edge over Google Inc (GOOG.O: Quote, Profile, Research) as the most popular search engine in the world's No. 2 Internet arena. China had 210 million Internet users at the end of 2007, second only to the United States, and that Web population is set to become the world's largest in 2008.

NEW YORK - Chinese Internet portal operator Sina Corp. said Monday that its board chairman, Yongji Duan, departed from the board, effective immediately.

Duan is no longer a director and is also no longer on the company's compensation committee.

The company did not disclose a reason for Duan's departure.

Sina said it named the Yan Wang, who had been the vice chairman of its board, as acting chairman, effective immediately.

Sina shares fell 49 cents to $35.03 in afternoon trading.