Recruiting in China

HONG KONG, June 12 (Reuters) - A new employment law in China will increase labour costs for foreign companies and restrict their flexibility in hiring staff, Australian law firm Minter Ellison said on Tuesday.
However the law, expected to go into effect in January, will also make it easier for companies to make large-scale layoffs in certain circumstances, such as bankruptcy.

The law is partly aimed at protecting employees in the private sector, lawyers say, and keeping up with changes in the labour market as a result of China's rapid economic expansion.

Thirty percent of new jobs in the country are now in service industries and private enterprises have replaced state-owned enterprises as the major employers.

"The greater part of the workforce is now employed by private enterprises and that brings a fear that those organisations don't necessarily have the interests of workers at heart," Pattie Walsh, an employment lawyer at Minter Ellison, told a conference in Hong Kong on Tuesday.

Foreign companies, which have flocked to China to tap into the country's booming economy, have favoured fixed-term employment contracts for local employees as laying off staff in China is difficult.

But under the new law, all companies will have to pay compensation at the end of a fixed contract and will have to allow employees to switch to an open-ended contract after twice renewing a fixed contract.

Lawyers also say probationary periods will be less effective because an employer will have to show evidence that an employee has failed to perform during probation before they can dismiss them.

"That means a company will have to monitor the employee during the probation period much more closely and will need to set criteria or an appraisal system so they can prove that an employee is not fulfilling the role," Walsh said. "This will put more pressure on the employee selection process to get the right people in."

Some analysts say foreign companies are being targeted in a drive to increase unionisation and U.S. retailer Wal-Mart Stores Inc and fast-food chain McDonald's , which has been accused of breaching minimum wage laws, are among companies that have moved to set up branches of state-backed unions.

Walsh said an existing employment law, introduced in 1995, is not always enforceable because it applies differently depending on the region and is often ignored in favour of local practices.

A final draft of the new labour contracts law is expected to be published within weeks and lawyers expect it to become effective on Jan. 1, 2008.

Many employees in China are working without formal contracts but the new law will require every employee to have a written contract drawn up within a month of starting work and companies will be liable to pay compensation if there is no contract.

Companies will however have more flexibility to lay off large numbers of staff in the event of bankruptcy, production difficulties, relocation to prevent or control pollution and changing economic circumstances.

Walsh said this indicated Beijing was bowing to pressure from companies to enable them to take difficult decisions when they go through tough times.

The law will also modify a "non-compete" clause, enabling a company to stop a senior member of staff or some other employee with confidential company information from joining a competitor within two years of leaving the company by providing compensation. Under the existing law the term is three years and is not restricted to senior staff and other special cases.

The terms of compensation will be agreed between the employer and employee when the employee first joins the company.

Lawyers said the "non-compete" clause helped companies protect their intellectual property and was a step ahead of some other jurisdictions.

1) Automated sourcing and candidate mining should be used.. Spiders, bots, search engines etc..
web spiders should be programmed to crawl, retrieve, and upload candidates into the applicant tracking
system based on both current and future needs.
Infogist , Talenthook , AIRS OXYGEN, comes to mind.
I heard of horror stories on someone sitting in the headoffice making the decision on what tools should be used.
Rather have inputs from actual users.

2)Better use of the new recruits. As they are the trusted sources for their ex-colleagues.
Its not about bombarding them with Employee Referral program message rather recruiters should take the
time out (just take them for lunch) and network with them.

3) Companies are doing exit interviews but never follow up. Does your recruiter gets a feedback why the hire left?

4) Ex Employees and contractors (who worked through third parties) who turned the offer down in the past or left the company. These candidates already know the firm, the culture and might be a easier hire.

5) A culture and environment must be created and a strategy in place to source passive candidates. Sourcing should be based on future needs rather than current or immediate needs. . This process must be a constant building of proactive pipelines of passive candidates.

6) Try new methods of sourcing like job networking sites, podcasting, blogs ,bountyjobs , jobster,
virtual recruiting etc. etc. Reach out to niche sites as many allow you to do free promotion for you.

08/06/2007
By Frank Mulligan - Recruit China

From the beginning of July to the end of August is generally a bit of a lull for hiring in China. Senior managers are away on holidays and budgets have yet to be developed.

If you have recently introduced some form of online hiring, the efficiencies it generates may leave you at a loss what to do with the extra time on your hands. Even if you haven¡¯t introduced online hiring you will still have free time on your hands. Perhaps it¡¯s time to undertake some preparatory tasks for the rush in September!.

1.. Do a survey of all top employees and ask them why they accepted the job when they were hired. Also ask them what they think the top selling points of the firm currently are. Add this information into your Talent Management System and itemise the reasons one by one. With this data from this task you will be in a better position to sell your company to China¡¯s professionals when you begin hiring again. Lulls always end.

2.. Do a survey of all candidates who rejected an offer in the past year to find out what the deciding factors were that led them to turn down your offer. Again try to systematise this by organising their reasons into broad areas that can generate metrics.

3.. Develop an online mail newsletter that will keep potential candidates interested in your company and aware of current hot opportunities. Send it out once every three months to opt-in candidates only.

4.. Review hires generated in the past year by collecting on-the-job performance data and manager satisfaction information. Compare this data with your notes during the interview process.

5.. Get into the important operations and sales meetings to learn which roles in the organization will be mission critical, i.e. where a vacancy or delay in recruitment would cause critical organizational failures, such as delaying time to market or compromising product quality.

6.. Search through your online Talent Pool (if you have one) and request additional information from candidates who have not filled out their profile fully.

7.. Isolate the key candidates in your online Talent Pool and separate them out from the others. Devise a system to increase the communications from your company with these selected professionals.

8.. Remember that recruiting is marketing, and build a clear, concise document that illustrates your Recruitment Brand. Use it in all future recruiting. In the ideal world, build this document into your Careers@ section of your website.

9.. Spend time with your line managers to see what behaviours they want more of, and less of.

10.. Develop scripts for phone interviews and build them into your Applicant Tracking Systems(ATS).

In the end there are many tasks that recruiters in China can undertake today to help make their jobs a little easier and to be more productive when the hiring season starts again.

Let¡¯s keep the slow out of the slow season!.

With China's economy still at high speed and corporate profits and wages on the upswing, this should be a golden time to be a newly minted university graduate. After all, multinational corporations have been complaining that they can't find enough qualified people to hire. Factories along the coastal regions have been hit by a shortage of migrant workers.

But guess what? For college seniors graduating this spring, finding a job has been a real struggle. There are simply too many of them to absorb even for a growing economy like China. Just ask Yang Hanning, who will be graduating with a degree in computer science from Tianjin University of Commerce in July. He has sent out dozens of r sum s and been called back for an interview for fewer than 10 companies. He has yet to receive a job offer.

"All of the jobs I've applied for are looking for people with experience. They give us recent graduates the cold shoulder," Yang, 23, laments. In fact only three out of his 22 classmates in the computer science department have received job offers so far, and none of the jobs has anything to do with their major.

Cutthroat Job Market
In 1977, the first year that Chinese university enrollment resumed after the trauma of the Cultural Revolution, only 4.7% of applicants, or 270,000 students, were accepted into college; a carefully managed trickle. And those lucky kids generally coasted into a stable job in a government ministry or state-owned enterprise. It was the fabled era of the "iron rice bowl" in which college grads received subsidized housing and rock-solid job security.

China's evolution since then into a more market-driven economy has also meant a far more cutthroat job market. This spring, 4.95 million seniors will graduate from colleges across China, nearly five times as many college graduates than China produced seven years ago.

"There are a lot of people in China. Everybody has a college degree and they're all competing for that one opening," said Liu Chao, 21, who will be graduating in July with a degree in computer science from Beijing Information Technology College. The joke floating around college Internet chat rooms is that college students nowadays are like cabbages: There's an abundant supply of them and their price never goes up. A Man A Woman

A Man A Woman

Flood of Unemployed
The reason universities are churning out record numbers of graduates every year is rooted in the Chinese government's decision to expand university enrollment starting in 1999. With the Chinese economy slowing during the Asian financial crisis,Asian Development Bank economist Tang Min in 1998 proposed expanding university enrollment to boost domestic consumption. China was closing down state-owned enterprises and laying off millions of workers at the time, so it seemed like a good idea to send some of the 3 million high school graduates in 1999 to college and delay their entry into the job market.

Today it is unclear exactly how many recent college graduates are unable to find a job. Since 2001, the official figures from the Ministry of Labor and Social Security [MOLSS] claim that roughly 30% of college seniors have not signed an employment contract by the time they receive their diplomas in July, which is a typical number for the U.S. and other developed nations. In China, however, that would mean nearly 1.5 million recent graduates will be flooding the job market this summer.

"The MOLSS tabulates the unemployment figures for blue collar workers and doesn't really care about white collar unemployment. College graduates are white collar. The MOLSS doesn't know how many of them are unemployed and doesn't care," said Yao Yuqun, professor at Renmin University's School of Labor Relations and Human Resources. He added that unemployed college graduates are not counted in China's official 4.1% unemployment rate.

Spoiled Only Children?
However there is anecdotal evidence to suggest that it is a growing problem that has attracted the government's attention. Last November, a graduate student from the prestigious Tsinghua University committed suicide because he was unable to find work. Starting last year, college graduates who have been unable to find work by Sept. 1 have been allowed to register as unemployed with their local government offices and receive unemployment benefits.

Older Chinese complain that the current crop of college graduates born in the 1980s under the one-child policy have been coddled by their parents. Unlike their parents who dutifully went to work wherever the state assigned them, this generation of Chinese are pickier about where they live and where they work.

"Some college graduates will only work if they find a good job. If it's a regular job, they won't do it," noted Sun Baohong, head of the Shanghai Academy of Social Sciences' Institute of Adolescents.

Please Stay Home
College graduates expect to land nice white collar jobs after graduation. The reality is that China's economic growth is still largely driven by factories needing cheap, low-skilled workers churning out products for export. Hence, chief executives complain that they receive a mountain of r sum s for administrative positions but are having a hard time filling openings on the plant floor.

Most college graduates have also shunned the countryside and flocked to China's major metropolitan areas, such as Beijing, Shanghai, and Shenzhen, to find jobs. The government has been trying to entice college graduates to spend a year or two working in rural areas after graduation by giving them bonus points if they apply to graduate school later. But young Chinese say that one reason they prefer to go to major cities to find work is because they feel the playing field is more level there, unlike in the countryside where "guanxi" or connections are needed to find jobs.

Companies say that China's educational system, which stresses rote memorization, turns out college graduates who can perform repetitive tasks efficiently but cannot think "out of the box" to attack problems creatively. Often college graduates simply can't do jobs they are hired for without further post-graduate training.

Experience Worth the Price
A European startup working on applying artificial intelligence to business cases moved its research and development operations to Beijing last year to take advantage of the cheap cost of Chinese software programmers and found this out the hard way. It originally posted job advertisements on the Internet and hired seven recent college graduates only to discover that some of the programmers were unable to write simple computer programs.

In February the company decided to start over from scratch. This time it hired a headhunter to find programmers with 5 to 10 years of experience. Even though it costs up to 10 times more to hire experienced programmers, as opposed to hiring fresh college graduates, the decision turned out to be worth it. "Of course the salary is different but you don't have redo their work and the work is higher quality. They would probably be actually cheaper than hiring fresh college graduates," said Nicolas Piguet, co-founder and R&D manager of the startup.

To be sure, many recent college graduates are aware of their shortcomings. They cite training and room for career advancement as one of the main factors when choosing where to work. "A lot of companies neglect career training. I don't get the feeling that I would learn a lot at these companies," said Jia Zhanjie, 24, who will be graduating with a degree in chemistry from Beijing Normal University. Even though he already has a job offer, he was still trolling job fairs on the weekends to see if he could find something better.

Limiting Number of Students
Not surprisingly, more and more college students are going to graduate school before entering the workforce. "After I return with my master's degree, it'll be easier to find work," said Luo Binhan, 23, who graduated with a degree in insurance from Wuhan University in 2005 and has taken the past year off to apply to graduate school overseas. However in the last couple of years Chinese students with graduate degrees have also found it harder to find work.

The Chinese government has started to take steps to improve the quality of education. The central government will invest 10 billion yuan [$1.3 billion] between 2006 to 2010 in vocational and technical schools to create more skilled workers. With factories facing shortages of skilled laborers, 95.6% of vocational school graduates had a job offer by the time they graduated last year.

Last year, the Ministry of Education also began to limit the number of incoming freshmen universities could accept to no more than 5% more than the year before. The rapid expansion of college enrollment had led to a shortage of qualified professors, leading to a drop in the standards. Renmin University's Professor Yao said, "A lot of people have been complaining to the Ministry of Education that their children can't find jobs. Expanding university enrollment has lost its attractiveness."

HONG KONG, June 4 (Reuters) - U.S.-based Kelly Services Inc. , the world's fifth-biggest recruitment firm, said on Monday it was expanding into China by acquiring a staffing company with offices in seven cities in mainland China.
Kelly Services, which is based in Troy, Michigan, said it had agreed to acquire P-Serv, a privately owned company which is based in Singapore but has offices in Hong Kong and seven cities in mainland China, including Beijing, Shanghai and Guangzhou, as well as second-tier cities Chengdu and Suzhou.

It would not disclose how much it had paid for the Singapore company but said the acquisition would enable it to do executive search, middle-management placement and temporary and contract staffing in China.

"We've got a number of multinational clients worldwide who are finding it difficult to find talent in China and want to use a recruitment company that has integrity," Dhiren Shantilal, Kelly Services' senior vice president for the Asia-Pacific, said by telephone.

A shortage of managerial talent in China has created a tight labour market and foreign companies face difficulty keeping staff amid rampant poaching.

Kelly's clients include Intel Corp. , the world's top chip maker, which has operations in second-tier cities Chengdu and Dalian. Shantilal said Kelly hoped to expand into three more second-tier cities in the next six to eight months.

He estimated that revenues earned by recruitment companies in China amounted to about US$2 billion in 2006 and would probably reach US$3 billion in 2008.

Foreign recruitment firms have been eying expansion in China since Beijing last year partially relaxed restrictions on investment in the sector.

In February this year Chicago-based Hudson Highland Group Inc , the world's sixth-biggest recruitment company, acquired a Chinese IT recruitment firm to better serve its multinational clients.

BEIJING--Every American company wants to expand into China, but so far none that has is doing that well. Baidu, the Chinese search engine, has a huge lead over Google. Amazon bought a growing local online bookseller to get its business going, but customer service and other issues caused sales to slow.

So what do people here think of U.S. companies? I decided to ask the CNET staff in China and here's what they said:

Apple: The iPod, although it costs a lot by local standards, is very popular, particularly with young consumers. Still, Steve Jobs has never visited China and that rankles people. The view is that he just views China as a market. The iPhone could do well, although it's expensive. Phones that imitate some of its style are already coming out.

Microsoft: Like Americans, Chinese consumers aren't really fond of the big M. For one thing, the software is expensive. A legal copy of Windows XP costs around 1,000 RMB (or $130). That's a monthly salary for some people. Plus, the Chinese think the Zune is ugly. MSN, however, is somewhat popular. The diplomatic overtures that Microsoft has made--Bill Gates inviting China's president to his house and Microsoft's investments in local companies--have helped.

Qualcomm: it's the place everyone wants to work. What? Qualcomm employees get their own offices and the offices are located in the Kerry Center, Beijing's most prestigious address. China Mobile and pretty much any other wireless company is a premier landing.

Google: If you can't land a job in cellular, Google will do. Google, however, isn't succeeding as many thought it might: the search giant only has about 30 percent of the market. Baidu came from nowhere by offering search for MP3s, which then helped them in other areas. Google needs to expand its services. Google's hiring of Kai Fu Lee, heralded in the States as a significant event, hasn't had much of an impact here. Most people shrugged at the name.

YouTube: Everyone knows the Google division, but it's not so popular. It's not in Chinese. Besides, video sites have cropped up like mad.

Yahoo: The company is kind of marginal, even though Jerry Yang is Chinese. People instead wanted to know if Americans knew much about Robin Li, founder of Baidu.

Dell: Dell has done well here, but now it has a reputation for poor customer service and low quality. But the prices are low. Dell also didn't do great PR here on the battery recall: the average buyer thinks the problem was Dell's notebooks, not Sony's battery.

American TV: Bring it on. 24, Lost and Prison Break are all big and viewers know how to get around government restrictions. Such restrictions may loosen up, however. The government is contemplating plans that would let racier content in legally, but only for certain age groups.

Sony: Good products, but expensive.

IBM: Boring. We truly do live in a global village.