Recruiting in China

Reuters reports that Apple is to build its first research and development center in China, citing a statement by the official Chinese state broadcaster.

Tim Cook reportedly made the commitment to Vice Premier Zhang Gaoli, stating that the center will be built by the end of the year.

The pledge comes after the head of China’s industry and technology regulator in May told Cook he hoped Apple could deepen its cooperation with the country in research and development and stressed information security.

Apple likely has two reasons for investing in R&D within China …

First, Apple wants to be able to recruit the best research staff worldwide, not all of whom are willing to relocate to the USA. It has established – or is establishing – R&D centers in a number of locations around the world, including France, Israel, Japan, Sweden and the UK. A center in China has long been rumored.

Second, the company is seeking to establish closer ties to protect its interests in what is currently its second-largest market.

Apple has long had a somewhat precarious relationship with the Chinese government. China has in the past questioned the security of iPhones and banned government purchases of Apple products. More recently, China has said that Apple will be subjected to greater security scrutiny, its iBooks and iTunes Movies services were shut down by a government agency, and a Beijing patent office has ruled that the iPhone 6 copies a Chinese phone.

Reuters even suggests that Apple’s $1B investment in Chinese Uber competitor Didi Chuxing – key to Uber abandoning its own operations in the country – may have been partly motivated by political considerations.

Before Cook’s charm offensive in Beijing in May, Apple announced a $1 billion deal with ride-hailing app Didi Chuxing, a move many experts saw as an attempt to curry favor with Beijing.

Apple’s Q3 earnings report revealed that the company’s sales in China were down 33% year-on-year as it battles local brands.

Managers seeking to meet the demands of the digital economy need to radically rethink how they recruit and develop their workers.
They should concentrate less on trying to fill vacant jobs or searching for prospective employees with particular academic or professional qualifications. Instead, they should focus more on attracting candidates with the skills the organisation needs – even if jobseekers come from different industries or lack some of the skills required.
These are some of the findings of the World Economic Forum’s 2016 Human Capital Report. The report makes compelling reading and offers valuable insight into how organisations can align their human capital requirements with the fast-changing digital economy. It examines how 130 countries around the world are developing and deploying their human capital. For the first time, the report’s authors have drawn on workforce information provided by digital employment exchanges and platform businesses. Contributors include LinkedIn, Upwork, Care.com in the US and Chinese firm Didi Chuxing. They’ve combined this information with a wide range of public sector data to produce a fascinating analysis of global skills and work trends.
Important findings for businesses include:
• Skill-sets are often a more accurate and consistent indicator of a recruitment candidate’s ability than job titles or qualifications, and can frequently be transferred from one industry to another. While data analysts in the market research and energy industries might have little in common there are strong similarities, for example, in the skills required for this role in the financial services and consumer retail sectors.
WEF report examines how 130 countries around the world are developing and deploying their human capital. Photo: Reuters
• Focusing on skills broadens an employer’s pool of prospective recruits and increases development opportunities for its workers. For example, only 84 000 of LinkedIn’s 430 million members record their job title as “data scientist” or “data analyst.” However, 9.7 million LinkedIn members possess one or more of the primary or sub-skills required by data scientists and data analysts. Around 600,000 have at least five of these skills. A modest investment in training could equip many of them for the role of data scientist or data analyst.
• Businesses can no longer act as consumers of “ready-made” human capital. They have a social responsibility to work closely with educators and governments to develop education systems that keep pace with an increasingly digital and dynamic labour market. Greater in-house development and training are also needed to enable workers to adapt to constantly changing skills requirements.
• Digital work platforms are accelerating the growth of the global “on-demand” workforce. However, most workers currently using these digital services were freelancing before they joined. Digital talent platforms still account for a very small proportion of the “own account” work performed in major economies.
• High talent mobility is shifting key digital skills between countries. Australia, Chile and the United Arab Emirates, for example, are gaining technology skills while Greece, Canada and Finland are losing them.

A general view of Shanghai Disney Resort.

Higher pre-opening costs at Shanghai Disney Resort partly contributed to a lower operating income of Walt Disney's international operations, according to a recent quarterly earnings report of the U.S.-based media conglomerate.

The lower-than-expected income of Walt Disney's international segment, dented by the costs of opening Shanghai Disneyland and lower attendance and higher operating costs at Disneyland Paris, was offset by an increase in domestic operations due to guest spending growth and lower costs, the report reveals.

Parks and Resorts revenues for the past fiscal quarter increased 6 percent to US$4.4 billion and segment operating income increased 7 percent to US$994 million, against staggering total quarterly earnings of US$2.6 billion, up by US$114 million over the prior-year quarter.

Disney's newest park in Shanghai, with a cost of approximately US$5.5 billion, has received close to a million visitors during less than a month after its opening, Disney Chief Executive Officer Robert Iger said last month.

Wang Jianlin, China's richest man and chairman of Dalian Wanda Group, a real estate and entertainment conglomerate, made a uncharacteristically bold remark prior to the theme park's opening, saying that "Wanda would make it impossible for Disney China to make profit in the next 10 to 20 years."

He also expressed doubt over the high cost of building such a theme park in China and believed that it would have to charge high prices in order to be profitable.

City widely recognized as a global center for mobile application development

BHP Billiton Ltd, one of world's largest mining companies by market capitalization, has launched its new Mobile Applications Hub in Shanghai, in order to help its global operations enhance their productivity, increase efficiency and reduce costs.

Diane Jurgens, BHP Billiton chief technology officer, said the new hub is one example of the potential for technology innovation to improve the way the company works and benefit people and the company.

BHP Billiton's mobile apps hub in Shanghai will also support the company to work closely with its China partners, such as steelmakers, to improve visibility of the entire supply chain.

"About 70 percent of BHP Billiton's iron ore is exported to the Chinese market, so it is important to stay connected with Chinese clients, particularly the visibility of supply chain, from pit to railway, from ports to yard. Now we have technology team in China and we can stay better connected to our marketing team to meet clients' demands," said Jurgens.

One of the key issues for enterprises that want to move up the value chain is to attract talent to develop automation and innovation to improve proficiency, she said.

The company's $5 million apps hub will initially employ 50 technology applications designers. Shanghai is an ideal location for the hub as it is widely recognized as a global center for mobile apps development and has highly experienced, skilled workers and leading universities offering excellent programs in technology and engineering, she said.

Mobile apps in the field have helped the company reduce its costs.

A solution that allows files and data to be managed securely on a shared device in mines located in South America and Australia with 350 users sharing 85 devices and another 1,000 devices deployed to 5,000 workers will help BHP Billiton save $6.5 million.

Analysts said as prices of commodities such as iron ore and gasoline have been experiencing wild fluctuations in recent years, players in the resources sector have been making various efforts to reduce costs and improve productivity by using better technologies, a key move for companies to survive difficulties and grow.

"Many players have suspended investments to open new field. Instead, they seek to exploit potential by using better exploration technologies to increase productivities, or optimize the supply chain, manufacturing flows, or human resources deployment to reduce costs," said a research note from Guolian Securities Co Ltd.

BHP Billiton has not approved new investment in iron ore since 2011, while resources will be deployed more extensively in copper mining, according to the company's disclosure materials.

Jurgens said technologies will not only help reduce costs but also will significantly boost productivity, such as by using sensors to identify copper from waste in mines. Big data emerging from the process will help geoscientists better analyze information and improve exploration results.

Real estate agents in Hangzhou are reaping the benefits of a boom in existing home sales, turning their occupation into one of the best paid this summer.

During the first half of this year, 52,889 existing apartments were sold, up about two-thirds from a year earlier and almost equal to total sales for the whole of 2105. Property agents, who normally get bonuses when they complete a sale, are earning an average of 12,326 yuan ($1,852) a month nowadays, according to industry analysts.

"I work almost every day," said Jason Huang, an agent in a real estate office in the Jianggan District. "I don't take breaks because that can mean money slipping away from my pocket."

In downtown areas, the average price of an existing apartment has risen to 19,652 yuan per square meter. In residential communities near sought-after primary and middle schools, prices have surpassed 20,000 yuan.

Brokerage fees vary according to the size of a transaction. Homebuyers typically have to pay 1-3 percent of the value of the apartment if a deal is concluded. On average, a real estate agent earns from 10,000-20,000 yuan on each flat sold.

"The income is much better than that of a typical white-collar office worker in Hangzhou," said Huang, who declined to reveal his earnings. "However, I do have to sacrifice weekends and leisure time for my job."

As a relative newcomer to the business, Huang said he has to familiarize himself with surrounding neighborhoods and find as many people as possible who want to sell their homes. He said he makes hundreds of calls every day to potential buys and sellers.

The most time-consuming part of his job is taking potential buyers to view apartments. On weekends, the number can triple from weekdays

"Sometimes, I take a buyer to visit a dozen flats in a day and all of them are rejected," said Huang.

"Selling a flat can take months or even a year. But once you are successful, if means money in your pocket."

Hangzhou's real estate prices have been rising for 14 months, influenced perhaps by the city's hosting of the G20 summit next month and the Asian Games in 2022.

Real estate activity in the Jianggan District has climbed 32 percent, according to Kanfang, a local real estate transaction website. That is followed by a 20 percent increase in Xiaoshan District and 19 percent in Yuhang.

In the Tier 3 city of Jiaxing in northern Zhejiang Province, the increase in real estate prices this month ranked first in the nation, according to the China Index Academy.

Veteran real estate agent Will Li said the ranking is not surprising.

Jiaxing sits at the border of Zhejiang and Shanghai, putting it only 30 minutes by bullet train from either city. In May, the government announced that Shanghai residents could use their housing accumulation funds to buy homes in Jiaxing.

"The new policy stimulated the local market," Li said. "Many sellers called to tell me they wanted to raise their prices. That means potential brokerage fees also rise."

Li owns a private real estate agency, operated out of a residential community. His track record in selling homes has made the agency popular with locals.

The boom in property is both gratifying and stressful for Li.

"It's really labor-intensive work," he said. "In addition to shuttling between houses, we have to deal with piles of contracts and sometimes resolve disputes between buyers and sellers. Yes, it means high incomes, but many of the younger agents burn out within three years.

Last month, two of his agents quit.

"More real estate agency chains are starting to open branches in the city, which means more competition and more stress for agents," Li added.

For his part, Huang said he plans to leave his current job next year and return to his hometown of Lishui in western Zhejiang, where he will open his own real estate agency.

"Hangzhou is saturated with agencies at present, so newcomers like me have to go elsewhere if we want to strike out on our own," he said. "However, the existing home market in Lishui is still full of potential. It's a great chance for me."

Huang is a young man with big dreams.

"I sell homes, but I can't afford my own house yet," he said. "I'm told that top agents can earn something like 600,000 yuan in just six months. I don't know if that's true or not. I am just saving my money to invest in my own business in Lishui."

Integrated HR services provider 51job, based in China, has seen revenues increase 10.2% amid “stable” growth in the country’s white-collar recruitment market.

The results were announced in unaudited financial results for the second quarter of 2016 ended 30 June 2016.

The results, published yesterday, reveal total revenues increased to RMB559.8m (£64.1m) on Q2 2015, with gross margin of 71.8% compared with 72.8% in Q2 2015.

Commenting on the results, Rick Yan, president and chief executive, said: “With the white-collar recruitment market exhibiting relatively stable, modest growth in this time of economic transition in China, our strategic focus remains on increasing online customer spend and improving cross-selling of our other value-added HR services.

“Our sales efforts to deepen customer engagement are bearing fruit as average revenue per unique online employer has increased on a year-over-year basis for five consecutive quarters.

“We will continue to execute our initiatives in a disciplined manner. We are making important investments to strengthen our sales and customer service infrastructure, expand our new targeted job seeker platforms and capture additional HR-related opportunities, all while maintaining a track record of sustained profitability.”

51job results at a glance:

Total revenues increased 10.2% on Q2 2015 to RMB559.8m
Online recruitment services revenues increased 11.2% over Q2 2015 to RMB373.1m
Other human resource related revenues increased 9.1% over Q2 2015 to RMB186.6m, which reflected the impact of a value-added tax policy change effective 1 May 2016
Gross margin of 71.8% compared with 72.8% in Q2 2015
Income from operations increased 4.7% over Q2 2015 to RMB128.2m
Fully diluted earnings per share were RMB2.9