Recruiting in China

Promulgated 12 years ago, the PRC Labor Law remains the fundamental piece of legislation governing employment relationships in China. Soon that will change. The draft PRC Employment Contract Law, expected to be promulgated in mid-2007, will effect wide-ranging changes to the regulatory environment for labor relations nationwide.

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Sponsor Link: DaCare Legal Search (China)
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We take pleasure in announcing that TransAsia Lawyers will soon be hosting the China Employment Contract Law Forum 2007 with the official endorsement and support of the PRC Ministry of Labor and Social Security (MOLSS). Senior officials from the National People's Congress, State Council, the MOLSS and the local labor bureaus of major cities will support and speak at the event. The forum will focus on the legal interpretation of the new PRC Employment Contract Law.

The Forum is scheduled for 23 - 24 July 2007 at the China World Hotel in Beijing* and will focus on the significant, wide-reaching legal interpretation of the new employment contract law. Several influential government agencies will be involved in the Forum: senior officials from the National People's Congress, State Council, MOLSS and All China Federation of Trade Unions will attend and speak. A number of leading multi-nationals will also participate.

Recommended attendance for:

CEOs
HR Directors and Consultants
Lawyers and In-house Counsel
Business Advisors
Academics

The forum will be the first time that senior PRC officials and legislators will appear on the same platform to discuss the new law. It will therefore provide a unique opportunity for attendees to hear authoritative interpretation of the law and to share their own thoughts directly with key individuals involved in the regulation of employment law in China.

To date, we have confirmed the following keynote speakers:

* Mr Zhang Shicheng, Deputy Director of the Legislative Committee, National People's Congress;
* Mr Li Jian, Director-General, Labor and Social Security Department, State Council;
* Mr Yan Baoqing, Director-General, Legal Affairs Department, MOLSS;
* Mr Qiu Xiaoping, Director-General, Wages Department, MOLSS;
* Mr Rui Lixin, Deputy Director-General, Legal Affairs Department, MOLSS; and

For an outline of the above speakers' topics, please click here.

* Mr Zhang Shouqi, Deputy Director-General, State Administration for Social Security;
* Mr Xu Shuli, Director, Wage Department, Beijing Labor Bureau;
* Mr Li Yanjun, Director, Employment Contract Relationships Department, Tianjin Labor Bureau;
* Mr Zhu Deliang, Director, Labor Disputes Department, Guangdong Provincial Labor and Social Security Administration; and
* Ms Isabelle Wan, Senior Partner, TransAsia Lawyers.

Additional distinguished speakers, including senior judges, local labor bureau officials, HR directors, and legal counsel from well-known multinationals, will participate as panelists.

We will continue to update this page with further details regarding the speakers and program of the Forum.

http://www.transasialawyers.com/pp.php?id=laborforum2007

Hiring, retention and motivation are huge issues for HR departments in China but it seems that even the best collective efforts of Recruiters and Line Managers would be insufficient to overcome the current shortage of electric power.

Reports from various parts of China indicate that companies, both local and international, are being held back by a shortage of power in their area. If this lines up exactly with the skills shortage, such the the supply of labour is reduced by the skills shortages to the level of supplied power, then that its all to the good.

But such conjecture belongs in the world of idle fantasy. You cannot achieve balance with two negatives. If only things were so easy.

The reality is that some parts of China, especially in the South, are only able to receive electric power 3-4 hours per day. So no matter how few less hires the company makes they cannot make up for the fact that they have to hire the wrong people. They should be hiring part-time people when in fact they are still hiring full-time people. The hiring market in China is so strong it is very hard to get people to do part-time work. Electic power shortages are unpredictable and this makes workforce planning that bit more difficult.

A variety of different culprits have been identified. These have been variously; the white hot rate of economic (not new), delays in new plant opening (plannable), government efforts to close down old, polluting power plants (delayable) and a lack of fuel (bizarre).

(It¡¯s worth noting that it is currently ¡®Huang Meitian¡¯ in China, despite reports that it will start next Sunday, and the power situation can only get worse. Humidity rates are already above 80% and air-conditioning is prefererable 24 hours per day. Soon air-cons all over China will be left on permanently.)
Time to Re-Think?

The worst case scenario is that international companies begin to re-think their investments in China. Fortunately, and strange as this word may sound, the power shortage has been going on for many years. CEOs of multinational companies have already factored it into their investment plans. No one expects China to have the kind of electric power transmission system that exists in Germany or Australia.

But at the same time there are many other countries bidding for any given MNC¡¯s investment. FDI is fickle and can go into reverse very quickly if sentiment changes. India looms large on China¡¯s competitive world map.

Since around the year 2000 companies have shifted to a very ¡®lean¡¯ approach to their business, such that a delay in one part of the supply chain ripples quickly through to the other parts. A ripple from the Workshop of the World could mean a red tide for other places.

That¡¯s a risk most CEOs won¡¯t take.

DaCare Staffing is a leader in delivering temporary staffing solutions as well as innovative workforce technology solutions in a variety of industries in China, providing pre-screened, qualified and trained personnel to our customers through our quality service.

DaCare Staffing is part of the DaCare Group recruitment and staffing for China and Asia. Our Intelligent Staffing brand continues to serve both clients and job candidates through diverse branches across the country.

ShangHai, BeiJing, SuZhou, ShenZhen, GhuangZhou, etc

Contact:

Phone1: +86 21 5238 9083
Phone2: +86 21 5238 9081
Address: Suite 9D, No. 121-123 JiangSu Road ZhongXi Mansion
Shanghai 200050, China
Email: info[at]dacare-staffing.com

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China's draft Labor Contract Law, scheduled for final passage in June 2007, saw a number of revisions during the National People's Congress (NPC) third deliberation on April 24.

A translation of the third draft is provided for members' information, courtesy of Baker & McKenzie. Please click here to view the file. (147kb pdf). AmCham Shanghai is currently reviewing the document.

Source: China Daily
The employment market will remain gloomy for "a considerably long term", with as many as 12 million workers struggling to find a job every year, according to a report released by the labor authority yesterday.

It is estimated that 65 percent of the population will be of working age in the coming 20 years as the children of the baby boom generation of the 1960s and 1970s enter the job market, said the report by the Ministry of Labor and Social Securities (MLSS).

Half of the 24 million people who enter the job market every year will not immediately be able to find work, despite the rapid growth of the country's gross domestic product, which is expected to create about 10 million new jobs every year until 2010, said the report.

The employment outlook is further clouded by the 120 million rural workers expected to remain idle in the countryside, said the report.

Despite the apparent over-supply in the labor pool, the MLSS also stressed in its report that labor shortages have hit factories in some prosperous regions.

The annual 5 percent increase in the number of migrant workers, a major factor in the fast pace of urbanization in recent years, has failed to keep pace with the annual growth in demand for workers, which has expanded by about 10 to 15 percent a year since 2003, said the report.

As a result, about 45 percent of the enterprises in the Pearl River Delta and 34 percent in the Yangtze River Delta polled by MLSS said they did not have enough workers last spring.

Meanwhile, the migrants' growing awareness of their legal and economic rights has also contributed to the shortage.

About half of the migrants surveyed by the MLSS said they would be willing to quit their jobs because of "low pay".

The lack of professional training is another factor in the shortage, said the report.

The report cited a survey by the MLSS earlier this year which found that 37 percent of all new jobs required a medium level of skills, but only 13 percent of migrant workers had received formal job training.

The ministry called for better working environments for workers as well as improved training programs.

While painting a dismal picture of the employment market, the report also sought to dispel fears raised by reports that China's labor supply would dry up by 2010.

A report released by the Chinese Academy of Social Sciences last month forecast that the family planning policy had helped slow the growth of the population.

This indicates that China would be "moving from an era of labor surpluses into an era of labor shortages."

It's a brave new world for China's software firms as they come of age

WHY China? Even two years ago, Ben Wang had to answer the question every time he tried a sales pitch for software service contracts from overseas clients.

These days, instead of answering the question, Wang asks the questions as he meets executives from scores of companies every month, all keen to outsource software work to his company.

"China is becoming a top destination for software outsourcing," says Wang, CEO of Beijing-based Beyondsoft Co Ltd. His company, started in 1995 with only four people, now has an army of 2,000 engineers, providing outsourcing services for tech giants such as Microsoft and IBM.

China's fledgling outsourcing companies are now expanding rapidly, trying to woo multinationals scouting for low-cost information technology (IT) talent. By trying to pry open the US market, they now aim to become international players like their successful counterparts in India.

But they are not the only ones driving China's IT outsourcing dreams. Leading IT services companies such as US-based EDS and India's Satyam have mapped out aggressive expansion plans in the nation. Some are even looking at acquiring local players to speed up the process.

"It's a critical time for Chinese outsourcing companies," says Wang.

"We will either grow into giants or will be gobbled up by a giant."

Unlike their Indian cousins, Chinese outsourcing companies usually made their first millions in Japan rather than Western countries like Britain and the US.

In 2006, China's software outsourcing companies raked in US$1.4bil in revenues, up more than 40% compared with a year earlier.

And 60% of this revenue came from the Japanese market.

Yet, compared with the US and Europe, the Japanese market is still a small pie. According to IT consultancy IDC, North American and European markets accounted for 75% of the world's US$320bil IT service and outsourcing market. And these two markets are expected to expand more than 60% annually in the coming years, almost twice the speed of the Japanese market.

With the US market firmly in their sights, Chinese outsourcing companies have kicked off an acquisition spree, trying to gain access to it.

In March this year, Beijing-headquartered hiSoft Technology International bought out Envisage Solutions, a California-based IT consulting firm that boasts a client base of biggies such as Novell and General Electric.

Despite their ambition to go global, Chinese outsourcing companies are facing increasing competition in the neighbourhood. As salaries for software engineers keep rising in India, the world's leading outsourcing giants are now eyeing China's universities as the new sources of low-cost software talent.

Tata Consultancy Services, one of India's most powerful IT outfits, established a new outsourcing joint venture in Beijing with Microsoft and two Chinese partners this February.

The company expects the venture to increase its headcount in China tenfold to 5,000 by 2010, and help it become one of the biggest players in China.

Two months later, India's fourth largest software exporter Satyam kicked off a global delivery campus in Nanjing, capital of East China's Jiangsu Province as part of its efforts to increase its number of engineers to more than 3,000 by 2008.

"The labour cost in China could be 15% to 20% lower than India's," Satyam chief executive officer Rama Raju said during the opening ceremony of the Nanjing centre.

"Besides organic growth, we are also studying the possibility of acquiring local companies to speed up our expansion."