Recruiting in China

CHINESE Web portal Sohu.com Inc said today its fourth-quarter earnings fell 32 percent to US$6.1 million, weighed down by higher costs.

Revenue rose 16 percent to US$34.4 million, but missed Wall Street's expectation for US$35.5 million, The Associated Press reported.

The company said the bulk of its sales came from online advertising. Ad revenue grew 23 percent year-over-year.

But results were hurt in part by a sharp rise in advertising costs. Brand advertising costs rose 66 percent to US$7.1 million, while search-ad costs increased by 56 percent to US$1.7 million over the previous year.

For the full fiscal year, Sohu.com said profit fell 13 percent to US$25.9 million. Revenue rose 28 percent to US$134.2 million.

Advertising revenue rose 35 percent year-over-year to US$91.8 million, helped by heightened activity related to the World Cup over the summer, Sohu.com said.

Positions go unfilled despite pool of available talent, experts say

It¡¯s become a real job trying to figure out today¡¯s job market.

Consider these colliding trends: U.S. businesses increasingly say they can¡¯t find the skilled workers they need, while millions of skilled workers say they can¡¯t find a job.

Drill down on the subject, and you¡¯ll find a myriad reasons for the disconnect.

Employers often argue that advancing technology has left gaps between work demands and the skills most job seekers possess. Critics say corporations have become overly picky and cost-conscious when recruiting.

Columbus resident Darrell Rathburn is one of the many caught up in this whirlwind.

Even though he has a master¡¯s degree in computer science and decades of experience working for Fortune 500 companies, he quit his job search after two years of looking.

"I decided to throw in the towel and accept the fact that I was involuntarily retired," he said.

In central Ohio, 68 percent of businesses said they couldn¡¯t fill jobs because they couldn¡¯t find people with the right skills or work experience, according to Community Research Partners a nonprofit economic research group in Columbus.

Yet, about 28,000 workers in Franklin County ¡ª many with education, experience and technical skills ¡ª can¡¯t find a job. Nationally, 8.1 million people are unemployed.

Job-seekers are scratching their heads.

Louise Karl holds a doctorate in biotechnology, has years of lab experience and has had research published in prestigious journals. She¡¯s been looking for full-time work for six years.

"There is no skill shortage," she said. "I probably know 20 people with Ph.D.s in biology, chemistry, et cetera, and none of them can even get an interview."

Karl might be on to something.

Some employment experts agree that there is no skill shortage. At least not on the scale that many business and trade groups are claiming.

Businesses have created an "artificial" talent shortage with shortsighted employment practices and inefficient use of the existing work force, said Norman Matloff, computer science professor at the University of California-Davis, in testimony to Congress about technology labor shortages.

The underlying driver is money.

"When a business says shortage, they really mean they are finding it difficult to obtain labor at the wage they are accustomed to paying," said Richard DeKaser, chief economist at National City Bank.

Ohio businesses are definitely "not willing overall to pay for skills that are in short supply," said Kathlene Tarsitano, general manager of Express Personnel Services, a staffing and recruiting company in Columbus.

About 23 percent of central Ohio employers said they had difficulty filling jobs because of the pay they were offering, according to Community Re- search Partners.

Industry doesn¡¯t apply the "basic laws of supply and demand to salaries," said Paul Kostek, former president of the Institute of Electrical and Electronic Engineers.

A company that underpays "will sit around and wonder why they can¡¯t find people and say it must be due to a skill shortage," he said.

Businesses are trying to lure people with perks other than money, said Stacey Jarret Wagner, managing director of the National Association of Manufacturer¡¯s Center for Workforce Success.

"Small manufacturers often can¡¯t pay ¡®big company¡¯ wages," she said. So they "offer alternatives such as being a great place to work, flexible hiring practices, or access to training."

Usually those efforts fall flat, especially if companies bank on retirement accounts and health insurance to lure talent, Tarsitano said. "Workers expect companies to offer those things."

But employers who offer more generous benefits seem to be avoiding skill shortages altogether. Ohio Health, which runs eight hospitals including Grant Medical Center and Riverside Methodist, launched a program in 2002 to pay 100 percent of nursing-school tuition costs for its full- and parttime employees.

"It¡¯s been a great recruiting tool, especially as the cost of college tuition has risen," said Jon Joffe, Ohio Health¡¯s vice president of human resources.

Even though Ohio had a shortage of 5,000 nurses last year, Ohio Health hasn¡¯t had trouble filling positions.

Attracting skilled workers "boils down to how you treat employees," Joffe said. Industries that "don¡¯t develop a reputation for treating people well will always struggle to attract the work force it needs."

Benefits are only part of the equation. Hiring practices also can exacerbate the skills gap.

Many companies are likely to shy away from older workers, even if someone has the skills they are looking for, said Robert Heneman, human resources expert at Ohio State University.

Older workers command higher salaries, and companies fear they will add to the company¡¯s health-care costs, he said.

It¡¯s treading the fine line of age discrimination, which is illegal, yet some workers say age is the only thing standing between them and a job.

"If (an employer) looks at your resume and gets the idea you are over 40, it¡¯s gone," Karl said.

Businesses also have grown pickier.

"Companies are very rigid in who they are going to hire, and it¡¯s gotten steadily worse," Tarsitano said.

"They would rather go with nobody than someone with comparable and transferable skills that they could train. They¡¯ve cut their pool of applicants to none."

Employers are "seeing black and white, and they aren¡¯t making any consideration of an individual¡¯s potential," she said. "They¡¯re hung up on this vision of the perfect person."

Being "smart people who can learn" is no longer enough to get you in the door, Kostek said.

Why? Training budgets have been replaced with a "hit-theground-running attitude," Heneman said.

Companies spend 50 times more recruiting a candidate than they do training them after they¡¯re hired, according to Deloitte Research. Only 37 percent of central Ohio companies provide general skills training beyond an initial orientation.

"It¡¯s the textbook way to manage talent," Heneman said. "Companies don¡¯t want to pay to give employees skills they can take to another employer."

But the gap between jobseekers and employers isn¡¯t all the result of human-resource changes.

"The economy has changed structurally" since 2000, DeKaser said.

Globalization and outsourcing have moved more blue- and white-collar work overseas. India and China have upped competition for U.S. businesses. And companies need fewer people to do more work, because of significant increases in productivity from mechanization and technology, said Bill Lafayette, vice president of economic analysis with the Columbus Chamber.

In 1997, the average American worker produced $70,200 worth of work as a share of gross domestic product. In 2005, it was $82,700.

Businesses say the skill shortage is, in fact, very real, and is caused by many of the same rapid technological advances that boosted worker productivity.

Many unskilled manufacturing jobs have been replaced with jobs requiring advanced math and computer skills, according to the National Association of Manufacturers.

The group said 90 percent of manufacturers are suffering from a shortage of skilled workers such as machinists and technicians, in part because of trouble recruiting young workers to replace skilled retirees.

At a biotechnology conference last fall, Ben Venue Laboratories in Bedford and Amylin Pharmaceuticals in Cincinnati said they had trouble recruiting workers, including senior-level scientists. In the past year, about 50 biotech companies moved to or were formed in Ohio.

The U.S Department of Education estimates only 20 percent of the U.S. population will have the skills needed to perform 60 percent of the jobs in coming years.

Central Ohio employers expect shortages in health care, information technology, architecture, engineering, sales, and business and financial operations in the next year.

Even so, these jobs will only yield a small number of openings every year. Occupations with lower pay and fewer skill requirements will provide significantly more jobs, according to the Ohio Department of Job and Family Services.

For instance, for every one job opening for a network systems data analyst, Ohio will have 20 openings for retail salespeople.

Still, skill shortages do pose a real risk to businesses, and maybe more so in the future, Lafayette said.

"All of the baby boomers are eventually going to go away, and there¡¯s a much smaller group of folks coming through the pipeline to replace them," he said. "The real shortage hasn¡¯t happened yet."

The Eastern Michigan College of Business (COB) has entered a new partnership with the Macau University of Science and Technology (MUST) in Maco, China.

"One way of building [an] environment here is to get our students to think a little more broadly," David Mielke, dean of EMU's College of Business said.

The partnership will bring the first group of MUST students, who come from 26 provinces in China, to EMU in the fall of this year. Students who complete the program will receive a bachelor's of business administration degree from EMU.

Amelia Chan, assistant dean of undergraduate programs at the COB, said students who follow the 2 2 articulation agreement would complete the first two years of coursework at MUST, then transfer to EMU to complete the last two years of study. Macau students must complete all of EMU's general education and COB requirements to be granted the Bachelor of Business Administration degree from EMU.

"I will be advising students who have applied to EMU for fall 2007, when I travel to Macau in March," Chan said. "While there, I will also be recruiting and promoting our business programs to other interested freshmen and sophomores."

Edward Keck, a business major, applauded EMU's effort to bring a different culture to its campus.

"I think any time students get a chance to study with another culture, it is a positive thing," Keck said. "This agreement will broaden my thinking about business ventures."

On a recent trip to Macau, Mielke received more interest from students than expected when he entered an auditorium of 250 students eager to join the program.

"I expected to meet 20 to 30 students...The students' biggest concern was how many we would accept into this program," Mielke said. "I don't hear our students thinking about studying abroad... I hope the students from China will help them broaden their expectations," Mielke said.

Chan said China is a major participant and competitor in the global economy.

"Since this type of exchange usually leads to EMU/MUST faculty exchanges, this will create new opportunities for COB faculty to have direct experience, which could be shared through consulting Michigan business on economic development and global marketing," Chan said.

The new partnership with China is the second international connection for the COB. The COB also has a duel undergraduate degree program with Keimyung University in Daegu, Korea.

Eva Wong, chairperson and president of Top Human Technology Limited, is to meet me at her office on the 58th floor of Plaza 66. The office exudes a confident, plush Oriental modernism and, with the view clouded, I absorb the rarified atmosphere as I wait.

The motto of Top Human is this: "Re-engineering the talent of people." Lofty or what! Wong's slight delay is due to her having just flown in from Canada, yet there's not a trace of long haul about her. As fresh as a daisy, Wong has the air of someone who has just enjoyed a good joke.

"I've been living out of my suitcase for years now. I'm always traveling, I love it," she laughs. One wonders how big her suitcase is.

Wong's new book "The Power of Ren - China's Coaching Phenomenon," co-written with Lawrence Leung, outlines her unique philosophy for business management and coaching. As the name suggest, her philosophy puts people at its core.

The Hong Kong native's approach involves elements of Buddhism, Confucianism and Taoism, and more than 100,000 top Chinese business people have benefited from the wisdom of Wong over the last 12 years.

My question as to how much she reckons her advice has added to the Chinese economy in total is met by knitted brows, followed by another heartfelt laugh. She turns to her able and attentive assistants, saying: "We should find out that sort of thing," before exploding into laughter again. The answer is a whole lot, by the way.

Mystical might be over-egging it a little but there's something about Wong that's hard to fathom. Captains of Chinese industry, a demanding lot to be sure, pay handsomely for Wong and her colleagues to tell them how to improve their businesses. "Most of our business comes through word of mouth," says Wong.

"I retired in 1990 and from then on I've been making my vision come true - of Top Human and of teaching people how to live their dreams and live their lives," says Wong, President of China Coach Association.

Having formulated her vision, strategy and philosophy, she started out coaching just one student in Hong Kong in 1995.

She's still the chief trainer, although now Top Human has offices in Vancouver, San Francisco, Singapore and in 10 major cities in China employing 500 staff. It's one of the biggest coaching companies in the world. Preparations are well underway for public listing next year. Soon Top Human will occupy all of the 58th floor of Plaza 66.

"The coaching concept came from the States and from the sports field, so that management executives become the coaches who treat the staff like their athletes," says Wong.

Top Human coaching, the power of Ren, is based on a nine-point plan in this order: Passion, commitment, responsibility, appreciation, giving, trust, win-win, enrollment and possibilities.

This point system stems from Confucianism, with two key points at its center: "Only when a man lives in accordance with his knowledge of both nature and people and becomes a well-learned person, can he manage his country and the world," from "The Doctrine of the Mean." From "The Great Learning" comes: "From the Son of Heaven down to the people, all must consider the cultivation of the person the root of everything else."

"We have two main roles," says Wong. "Firstly we coach senior business people, helping them improve their management style and their business. The other is to train people to become coaches."

"In China, business is inextricably linked with personal relationships which is quite different from the West," says Wong. "Entertaining business contacts out of the work environment is much less common in the West. Colleagues' trust must be earned in China - then they will go the extra mile."

The coaching takes the form of a two-hour one-on-one session where the client's needs are determined. There then follows a six-month course with regular evaluations and team teaching, where those being trained can compare notes.

Courses cost 30,000 yuan (US$3,860). Courses mostly take place in Mandarin just now but moves are afoot to extend Top Human offerings to Westerners. See www.tophuman.com for details.

The book is a must-read for those doing business in China, particularly those who have found their Western- style approaches frustratingly ineffective. It's a well-presented book that's accessible, readable and packed with interesting case studies.

It can be bought at the Shanghai Foreign Language Book Store (tel: 6322 3200) priced 180 yuan (US$23).

NEW YORK (CNN) -- With an average of about seven chief executive officers departing per business day, 2006 is poised to be a record-breaking year for ousted CEOs, according to data compiled by CNN and a study conducted by Challenger, Gray and Christmas.

If the trend continues at its current rate, more than 1,570 CEOs will lose their titles by year's end, up more than 200 from last year's record number of 1,322.

In just the first 11 days of October, the corporate world has seen a turnover of 36 CEOs, including the resignations announced Wednesday at Internet media company CNET (Charts), software maker McAfee (Charts), and Sovereign Bancorp Inc. (Charts) During the first 12 days of September, the boards of Bristol-Myers Squibb Co. (Charts), Ford Motor Co. (Charts) and Viacom Inc. (Charts) elected new CEOs to lead the corporations.

Former CNET CEO Shelby Bonnie resigned while former McAfee CEO George Samenuk retired, but both left their posts in relation to stock options back-dating probes, a growing trend in recent months. Earlier this week, Monster Worldwide Inc.'s (Charts) CEO Andrew McKelvey, a 39-year veteran with the company, resigned from his leading post, pinning partial blame for his move on an investigation into the company's stock options practices.

Since Oct. 1, five company executives - three CEOs, one chief financial officer and one president - have either resigned, retired or were fired from their posts after reports of option grants irregularities. Preliminary data compiled by Challenger, Gray and Christmas show nine companies entrenched in back-dating options scandals have lost their CEOs since January 2005.

According to the study, 32 CEOs have been fired from their jobs since the beginning of 2006, a third of them in September alone.

"It is rare for a CEO to be officially fired," said John Challenger, chief executive officer of Challenger, Gray and Christmas. "Boards may apply pressure or force a chief executive to leave, but they often allow the executive to announce his resignation, thus sparing his or her dignity. It takes a major infraction for a CEO to be publicly fired."

After more than 1,100 CEOs departed companies in 2000, the year the tech bubble burst and dot-com companies began imploding, the number of CEO turnovers began to gradually decrease year-by-year, dropping to 663 in 2004, but then jumping back up in 2005 setting the record to beat, according to CGL spokesman James Pedderson.

The government will set up a company to manage its hefty foreign exchange reserves, according to an influential newspaper.

China Securities Journal, which is owned by Xinhua News Agency, quoted unnamed "authoritative sources" as saying that the establishment of the State Foreign Exchange Investment Company would represent a major initiative to better utilize the country's huge foreign exchange assets and to address the issues brought up by their accumulation.

China has the world's largest foreign exchange reserves, which amounted to a whopping $1.07 trillion at the end of 2006, and are poised to swell further.

Premier Wen Jiabao said at the National Financial Work Conference last month that the country should "explore new means and extend channels" for the use of the money.

The assets are currently managed by the State Administration of Foreign Exchange (SAFE). A considerable part of the money is believed to have been used for the purchase of United States treasury bonds.

Economists have said that the reserves far exceed the amount needed for their main purpose international trade payments, paying back external debts and contingencies.

Lin Yifu, an economist at Peking University, said any excess should be allocated for better returns.

In late 2003, SAFE transferred $45 billion to Central Huijin Investment Co Ltd, which used the money to recapitalize State-owned Bank of China and China Construction Bank. The injection of the funds was a crucial step for the restructuring of two banks and their eventual listing.

Huijin has also invested in dozens of other State-owned banks and brokerages.

The China Securities Journal said the new investment company would raise funds by issuing renminbi bonds and use the money to purchase foreign exchange reserves from SAFE.

This will help reduce excessive money supply, which is created by the huge amounts of renminbi that the central bank has to put into the market when it buys foreign exchange from enterprises to maintain the stability of the currency.

Excessive money supply is partly responsible for the country's high fixed asset investment growth in the past few years. Fixed asset investment growth, which stood at 24 per cent last year, has in recent years been deemed a major threat to the health of the economy.