Recruiting in China

February 26, 2007
Lenovo has appointed Yolanda Conyers, as vice president, Cultural Integration and Diversity, responsible for the global integration of the company's workforce.

"Yolanda has the experience we need to help make Lenovo a success in the global marketplace," said Ken DiPietro, senior vice president, Human Resources, Lenovo. "Our goal is to leverage the strengths of our employees worldwide, and Yolanda's expertise in cultural integration will help us to become even more competitive."

Conyers was most recently director, Worldwide Procurement at Dell, where she led the supply chain strategy team. Prior to that, Conyers was director, Global Diversity, where she helped develop the company's workforce and marketplace diversity model, including recruitment, retention, outreach, and education. Conyers also held management positions in Dell customer service organization.

Conyers holds a Bachelor of Science Degree in Computer Science from Lamar University, and an MBA from Our Lady of the Lake, San Antonio, Texas.

Union Network International says jobs of 300 British workers are under threat as clothing maker Burberry plans to move production from the United Kingdom to China in March.

UNI says Burberry's image is founded on the idea of being British and if it closes its factory in Treorchy in March as planned then it "will have to trick customers worldwide into thinking that a product made in China is still the essence of Britishness."

Japan is one of Burberry's biggest markets and UNI General Secretary Philip Jennings said a Japanese shopworker will be asked to sell something on the promise that it is a traditional British product while knowing it is made in China.

"Burberry cannot expect our members, the sales staff in Japan, or anywhere else to lie or even to put their hearts into a selling a product under false pretences," Jennings said.

UNI's Japanese affiliates through the UNI Liaison Committee have written to the Burberry workers expressing their full support for the British workers and their union GMB, in the fight to retain their jobs. They warned Burberry that customers in Japan could feel cheated and betrayed which could do great damage to Burberry sales in Japan.

The fight to keep Burberry jobs in Wales has also reached Euro-MPs, who led by Wales MEPs Glenys Kinnock and Eluned Morgan sent a Valentine's message to company bosses to 'Stop Breaking Our Hearts'.

Speaking from Strasbourg, Labour MEP Glenys Kinnock said, "By moving production to China, Burberry is breaking the hearts of its loyal and hardworking Welsh workforce and devastating an already deprived community. The company has also failed to give guarantees that the factories in China, to where production is likely to be moved, will not employ child labour or use forced labour. At a time when consumers increasingly make choices according to company ethics, Burberry's actions are not only morally reprehensible but commercially unsound."

Eluned Morgan added, "Burberry's decision to move production to China is sheer corporate greed. The company's sales are booming and profits are healthy. There is absolutely no reason for the company to pull out of the Rhondda Valley. I and my European colleagues today urge Burberry to rediscover its sense of Corporate Social Responsibility and keep its Treorchy factory open."

PERU and China are expected to begin free trade talks this year with expert-level discussion to open next month, Peru's Tourism and Foreign Trade Minister Mercedes Araoz said Thursday.

"We are calling a meeting of technical teams at the end of March or beginning of April, and we hope to launch the negotiations with China this year," said Araoz.

The statement came one week after the minister said the two nations would begin a feasibility study on a bilateral free trade agreement.

Araoz also said Peru is working with the private sector on defining the terms of a trade deal with South Korea; and possible free trade agreements were under consideration with Canada and the European Free Trade Association whose members are Switzerland, Norway, Iceland and Liechtenstein.

As member of the Andean Community of Nations (CAN), Peru is also working on an association agreement with the 27-member European Union.

CAN nations will meet to discuss the EU talks in March, Araoz said.

Shaun Rein of the China Market Research Group submits: My firm recently interviewed senior executives of MNCs in China about their operations in China and what parts are strong and what parts need improvement. One of the respondents’ biggest complaints in doing business here surprisingly was not corruption or IPR issues. Indeed, the majority of respondents said that the Chinese Government has cracked down on corruption and IPR enforcement to the improvement of business conditions.

Instead, the most common complaint from our interviews was HR related. As China’s economy booms, executives said that it is hard to recruit and retain good talent that will help them scale their businesses and enter into the potentially lucrative 2nd and 3rd tier cities of China .

I wrote about strategies for retaining talent in a recent Harvard Business Review piece, and how MNCs need to put in place better training programs, eliminate glass ceilings for Chinese workers, and reduce if not eliminate outsized expat packages that cause jealousy amongst lower paid Chinese employees.

China’s HR conundrum is something that confuses a lot of people who have not had to hire people here. They reason that there are so many people in China looking for jobs that it must be easy to hire people. They point to the fact that China’s number of university graduates matriculating every year has quadrupled in the last five years from 1 million to 4 million and to the fact that there are 180 million migrant workers who “float” around China looking for job. How can it not be easy to hire talent, these people reason, especially if you give them salaries like $500 USD a month that is far less than what companies pay workers in the US but far more than the average GDP per capita in China which stands around $100 USD a month.

The problem is that the skills that most workers possess are not necessarily what MNCs are looking for. For those with the needed skills, it is an employees market. They can and do demand ever higher salaries, with MNCs regularly doling out 20% annual increases to retain even mediocre talent. Restless and wanting to be the boss and make millions, they are switching jobs every year or so, leaving MNCs constantly looking to hire.

As a result of market conditions, large executive search firms like Korn/ Ferry (KFY), Russell
Reynolds, and Spencer Spuart as well as boutique ones have been multiplying. It seems like every other office in my building in Xintiandi is either a headhunting or textile company.

But online recruiting sites like 51jobs.com (JOBS), ChinaHR.com, Zhaopin.com, and an aggregator that pulls job listings from across the internet called Yingjiesheng.com is of the most interest to retail investors. The top three sites together control nearly 70% of the online job market with 51jobs.com leading the pack with a 39% market share, followed by ChinaHR.com at 15% and Zhaopin.com with roughly 14%. And it is a booming market.

My firm, the China Market Research Group (CMR), estimates that the online job market in China will grow fourfold by 2010 from its 2005 value of $100 million USD. Growth will remain steady as the majority of China’s 125 million internet users fall between the ages of 18 and 28. This age group, which I have termed China’s Baby Boomers, are internet savvy, much as their peers in South Korean are. They are willing to apply to jobs online. In our surveys, China’s youth said that they like to conduct a job hunt using online job hunting sites because it is “convenient” and because some of the sites like Yingjiesheng.com “actually have relevant information about companies including the interview experiences of other applicants.”

Investors have been paying attention to these numbers and sentiments.

Monster.com (MNST) invested $50 million USD in 2005 to buy a 40% stake in ChinaHR.com. More recently, Monster invested another $20 million USD to increase its stake in the company to 45% and has announced that it intends to take control of the company sometime in 2008.

Zhaopin.com, at present the smallest of the big three, recently received an investment of $20 million USD from Seek Limited, the largest job site in Australia. It has announced plans to differential itself from its competitors by targeting younger job seekers in China’s 2nd and 3rd tier cities.

Of the big 3 online job hunting sites, only one, 51jobs.com is public. So, should investors buy shares in the biggest player of a hot market?

The financials for 51jobs.com has been promising in 2006. Q1 2006 saw revenue of $21.5 million USD, 21% higher than Q1 05. Total second quarter revenue was $21.7 million USD 18% higher than Q2 05. The growth continued in Q3 with revenue was up 12.5% over 2005 Q3. Profit for Q3 was $12.1 million USD, 15.9% higher than the same period last year.

The stock has been wild, moving from $15 USD in early January to a high of $31.90 USD in the middle of May after beating estimates, before crashing back down to $12.70 USD at the end of October after missing earnings estimates. It is now holding steady at $16.56 USD on December 22.

Right now, 51jobs.com seems to have the edge in terms of market share over its competitors. But Chinese internet users are fickle and mass migrations from one site to another after a change in technology or service are quite common as 51jobs.com still has not created a stickiness factor. MNCs seem to post jobs on all 3 of the major sites.

We found recently the following examples of MNCs that use online job hunting sites to find talent:

51job: ABB (ABB), Advanced Micro Devices (AMD), General Electric (GE), Hitachi (HIT), HP (HP), Microsoft (MSFT), Motorola (MOT), Oracle (ORCL), Tyco (TYC), and Webex (WEBX)

Zhaopin: Bayer (BAY), Bayerische Motoren Werke AG (BMW), Colgate Palmolive (CL), Ford (F), HSBC (HBC), Philips (PHG), Shangri-La (SHANG), Royal Dutch Shell pls (RDS.A)

ChinaHR: Timken (TKR), China Mobile (CHL), Cisco (CSCO), Dell (DELL), Ebay (EBAY), Google (GOOG), International Business Machines Corp. (IBM), Morgan Stanley (MS), Sina (SINA), and Western Union (WU)

However, more and more MNCs are getting used to posting jobs on university BBS which are free and which is where the majority of students we interviewed said they go first when looking for jobs. Students like BBS like Fudan University’s because they can “discuss” a company there, get “company specific interview information”, ask for “advice on salary” packages – a scary situation for companies, however, as all their rejected applicants might criticize them.

In the next 6 months, I do believe that 51jobs.com has room to grow and capture more market share. It might be worthwhile for investors who are willing to take a few risks to look at buying a few shares. I think that the risks in 51jobs.com are quite high because of the potential competition. I see Zhaopin making big strides with its new war chest – this could pose a threat. However, I don’t see Zhaopin being able to take away major market share in the next 6 months.

Keep your eyes on the competition though. I believe that one major player will emerge in the next 12 months and that there will be a consolidation of the industry to 1 or 2 major players.

Note: CMR Analysts Ben Cavender, Natalie Zhu, and Allen Lee contributed to this article.

By Zhang Fengming (Shanghai Daily)
Updated: 2007-02-05 14:27

With overseas lenders given a more level playing field to compete on the Chinese mainland, the competition has heated up to find experienced employees.
Star Ge, a headhunter for bankers, says the beginning of the year is the peak season for job seekers.

Big plans

Sales managers, public relations officers, translators and other positions are open for those interested in working for an overseas bank.

HSBC will add 1,000 employees this year after hiring the same number in 2006 as the bank expands investment in networks and personnel on the mainland, said Richard Yorke, chief executive officer of HSBC in China.

Hang Seng Bank also said it will hire about 2,000 people by 2010.

Some of the new employees are from domestic lenders.

"The competition among overseas and domestic lenders is not only about the fight for high-end clients but for talented staff as well," said Shiu Kai-Wing at Capgemini, a consultancy firm.

The expansion ambition of overseas banks is easy to see in Shanghai.

Places like Xujiahui and the Jing'an Temple area stand out as key locations for overseas banks.

On the crossroad of Caoxi Road N. and Nandan Road, a batch of overseas banks including Standard Chartered, Hang Seng Bank, First Sino Bank and Bank of East Asia, fight for attention.

In January, Standard Chartered opened its biggest outlet in eastern China for priority banking, or high-end client investment services, near Xujiahui.

High on the list of skills required to work at an overseas bank is foreign languages, Ge said.

English helps

Chinese in their early 30s happily greeted Katherine Tsang, chief executive officer of Standard Chartered Bank China, and introduced themselves with their English names at the opening of the Xujiahui branch.

"People from domestic banks who have ample branch expansion experience are also highly desired by overseas lenders," said Ge.

The demand for people with small- and medium-sized business experience also looks good on resumes.

"Most candidates see an opportunity to develop their careers as the main attraction of working at overseas banks," said Ge.

It is expected that employees working for overseas banks will top 16,910 by 2008, according to PricewaterhouseCoopers.

Nonetheless, there are also some unwritten rules in the industry. Overseas banks are reluctant to grab too much talent from domestic partners to avoid potential conflicts.

HSBC, Citigroup and Standard Chartered have purchased strategic stakes in domestic lenders as part of a two-pronged approach to expansion on the Chinese mainland that complements organic growth plans. The last thing they want to do is cause problems with a domestic partner.

However, domestic banks are not defenseless in the battle to hire talented people. Some offer an allowance to purchase real estate. The amount varies on length of service and position, but it can be worth tens of thousands of yuan.

All about timing

Xiao Yang, a Bank of China employee in Shanghai, declined the chance to work at an overseas bank.

As a graduate from Shanghai International Studies University renowned for its foreign language education, he said the chance to speak English is rare in his current position.

"I want to gain more experience before making a wise move," he said. "If the right timing comes, I will move."

By Cathy Chan and Patricia Cheng

Feb. 5 (Bloomberg) -- Merrill Lynch & Co. hired Margaret Ren as a chairman of China investment banking after U.S. regulators cleared the former Citigroup Inc. executive of wrongdoing in a 2003 initial public offering.

The 48-year-old daughter-in-law of former Chinese Premier Zhao Ziyang will report to China region Chairman Liu Erh-fei and Asia banking head Sheldon Trainor, said Damian Chunilal, who leads Merrill's Asia Pacific investment banking operations.

Ren may help Merrill challenge UBS AG and Goldman Sachs Group Inc., who together accounted for a quarter of the value of stock sold overseas by Chinese companies last year. Merrill slipped to sixth place last year from fourth in 2005 in arranging such sales, according to data compiled by Bloomberg. It ranked fourth in IPOs, up from sixth in 2005.

``She's well-connected,'' said Stephen De Pretre, a vice president at headhunter Salzer Consulting in Hong Kong. ``For companies that need to do deals in an environment that's very strongly regulated, having people with strong networks at senior levels is crucial.''

Ren confirmed the appointment, which is effective this week, when reached by phone. She declined to comment further. The mother of two has a master's degree in management from the Massachusetts Institute of Technology in Cambridge, Massachusetts.

Ren, who joined Citigroup in 2001 after nine years at Bear, Stearns & Co., was suspended in 2004 after the U.S. Securities and Exchange Commission started probing the firm's handling of China Life Insurance Co.'s $3.5 billion initial share sale, the world's biggest in 2003. She was cleared of wrongdoing last year.

Bulking Up

Hong Kong's Securities and Futures Commission on Feb. 2 granted Ren licenses to perform investment banking services. The license approvals on SFC's Web site list Merrill Lynch as her employer.

``This important hire reflects our commitment to this business,'' said Chunilal in an internal memo sent today.

Investment banks and buyout firms are bulking up as companies in China, the world's fastest-growing major economy, prepare to sell more stock and buy local and overseas competitors. The value of China's domestic stock markets has more than tripled in the past year, topping $1 trillion.

Chinese initial public offerings soared after the government ended a ban on share sales in May. The $75.4 billion of stock sold in China and Hong Kong trailed only that of the U.S. in 2006.

Blackstone Group LP, manager of the world's biggest buyout fund, last month hired Antony Leung, Hong Kong's former financial secretary, to run its business in China, Hong Kong and Taiwan. Oaktree Capital Management LLC, a Los Angeles buyout firm with more than $33 billion of assets, hired former JPMorgan Chase & Co. Asia Pacific Chairman Ralph Parks same month.

Citigroup's Woes

Wilson Feng, a vice chairman of China investment banking, was promoted to a chairman, according to the memo.

Citigroup's fortunes in China waned after it ousted Ren. Her successor as head of China investment banking lasted 15 months. After Ren left in June 2004, 10 of Citigroup's 13-person investment banking group dedicated to China quit the New York- based company.

The company, whose roots in China go back to 1902, slumped to 11th in overseas stock sales by Chinese companies last year from fourth in 2003, Bloomberg data shows. The only Chinese IPO Citigroup handled last year was China Coal Energy Co.'s $1.9 billion sale in December.

Citigroup is fighting back. Last month, it hired Zhang Wendong, former co-head of China investment banking at UBS AG, to be managing director for China investment banking. In March, it tapped Zhao Jing, former co-head of China investment banking at Morgan Stanley.

`Stronger Than Ever'

``2006 was a year of investment for us and we ended up with a great deal of momentum as the year ended,'' Bob Morse, the New York-based firm's chief executive officer of corporate and investment banking in Asia, said in a Jan. 26 interview. ``We have a pipeline that is stronger than it has ever been.''

Chinese companies may raise as much as $55 billion in IPOs this year, with domestic share sales overtaking Hong Kong offerings in value, according to JPMorgan Chase & Co.

Shares of Industrial Bank Co. soared 39 percent in their Shanghai debut today after the $2 billion initial public offer attracted record bids. Investors ordered $150 billion worth of stock -- equal to the market value of International Business Corp.

This year, bankers will be courting companies such as Agricultural Bank of China, which last week said it will seek a government bailout to prepare it for an IPO. The bank had 18 percent of outlets in the nation as of last month, and it employs 452,000 people.