Recruiting in China

Wednesday August 30, 12:01 am ET

MILWAUKEE, Aug. 30 /PRNewswire/ -- Despite China's population of 1.3 billion, a critical talent shortage has multinational corporations struggling to retain their management and employees. A new White Paper by Manpower Inc., a world leader in the employment services industry, examines this paradox and offers insight to help multinationals improve their talent management strategies in China.

"The United States is the biggest investor country in China, yet many of its companies are struggling to generate the growth they want because of people issues," said Jonas Prising, President of Manpower North America. "Recruiting the right people, retaining the best staff and developing leaders of the future are difficult tasks in any market. For foreign companies operating in China, there is the added difficulty of understanding how to adapt talent management strategies to the country's unique business culture and values."

The White Paper, The China Talent Paradox, reports that rapid economic and social change has spurred a skills shortage that is set to escalate in the next few years. The labor shortage in China is even more problematic than in other nations because it is most severe among managers. Two in every five companies find it difficult to fill senior management positions. Mid-level managers are also in short supply, particularly those who are Chinese nationals and can interact with local people.

Competition is stiff for this elite group of employees, and high turnover compounds the issue. Management-level attrition rates in China are more than 25 percent greater than the global average, and replacing a high-performing manager can cost 300 percent to 2,000 percent of that individual's salary.

The White Paper details Manpower's proprietary Workforce Optimization Model, which offers practical strategies for multinational corporations to improve employee attraction, engagement and retention in China. These talent management strategies rely heavily on understanding Chinese cultural nuances and leveraging that knowledge.

"To fuel the current level of growth that multinationals are experiencing in China, they need to attract and develop competent leaders that can work effectively in the Chinese workplace," said Lucille Wu, Managing Director of Manpower China. "Chinese employees respond best to hands-on leadership and having a role model to demonstrate what is expected of them so that they may replicate their actions. They are also unlikely to tell a manager when they do not understand how to complete their work. This requires a different leadership approach than most Western multinationals expect when they come to China."

There is good news for U.S. multinationals operating in China if they are successful in developing an employment strategy that fits the culture and values. Although employee retention is an issue, these businesses have a distinct advantage in competing for talent in China. Nearly 75 percent of Chinese employees would prefer to work for wholly-owned foreign companies rather than joint venture companies and wholly-owned Chinese companies, according to Manpower research.

Apple Computer said Wednesday it was trying to settle a dispute over alleged labor abuses at an iPod factory in China, an awkward case highlighting the challenges big companies face in living up to their codes of conduct while outsourcing most of their production.

The case also reflects the pressures Chinese journalists confront in doing their jobs.

The dispute involves a defamation lawsuit filed by Hongfujin Precision Industry Co., a major exporter owned by a Taiwanese company, against two journalists at the state-run newspaper China Business News who ran stories alleging that some workers on iPod assembly lines were paid only US$50 a month while working 15-hour shifts.

Hongfujin is suing the two, reporter Wang You and editor Weng Bao, for 30 million yuan (US$3.8 million;euro3 million) in the Intermediate Court in the southern city of Shenzhen, which froze the journalists' personal assets pending the trial, according to local media reports.

The case has provoked criticism in the Chinese media and an open letter from the journalists' advocacy group Reporters Without Borders demanding that Apple's chief executive, Steve Jobs, to intervene.

"We believe that all Wang and Weng did was to report the facts and we condemn Foxconn's reaction," said the letter, signed by Robert Menard, secretary-general of the Paris-based group. "We therefore ask you to intercede on behalf of these two journalists so that their assets are unfrozen and the lawsuit is dropped."

Hongfujin is a wholly owned subsidiary of Taiwan-based Foxconn Technology Group.

"Apple is working behind the scenes to help resolve this issue," an Apple spokesman, Jill Tan, said Wednesday. She said she could not comment further.

Court officials in Shenzhen refused comment Wednesday.

Apple's iconic iPod players are made abroad, mainly in China. The Cupertino, California-based company has sold more than 50 million iPods since the product debuted in 2001.

The allegations of harsh conditions at the iPod maker's factory in Shenzhen originally surfaced in a report in June by the British newspaper, the Mail on Sunday.

Apple responded by promising to immediately investigate conditions at the factory. It issued a report earlier this month saying that it found some violations of its stringent code of conduct but no serious labor abuses. It pledged to immediately redress some problems with overtime, employee accommodations and administrative issues.

The report discounted allegations of forced overtime, noting that a chief complaint among workers was a shortage of overtime during slack periods.

Staff who answered the phone at Hongfujin refused to take any media inquiries.

Earlier, Foxconn issued a lengthy statement denying the allegations and defending its labor policies. The statement detailed amenities it says the company offers to employees, including free medical care, "complimentary professional laundry services," soccer fields, libraries and an Internet cafe.

"Foxconn has been recognized by Shenzhen government as a role model," it said.

Foxconn is a trade name for Taiwan's Hon Hai Precision Industry Co. It claims many customers, including Intel Corp., Dell Inc. and Sony Corp. It is one of many Taiwanese companies with operations on the Chinese mainland, despite the political divide that has persisted since China and Taiwan split amid civil war in 1949.

Hongfujin was reportedly China's biggest export manufacturer last year, with overseas sales totaling US$14.5 billion (euro11.3 billion).

China Business News, a respected publication backed by several big media groups, has given Wang and Weng its unconditional backing, saying the two have evidence to support the allegations.

"Our newspaper will definitely back Wang You and Weng Bao since what they did was not a violation of any rules, laws or journalistic ethics," said an official in the newspaper's publicity department. Like many Chinese, he gave only his surname, Yang.

The financial magazine Caijing, meanwhile, accused the Shenzhen court of violating the law in freezing the journalists' assets.

Wang and Weng were not available for comment Wednesday. However, they have set up a blog recounting their ordeal and reflecting on the risks associated with doing their jobs.

"This is the toughest time I have faced since I entered the media business 10 years ago," Weng wrote.

Chinese journalists working in the state-controlled media have always had to cope with censorship and stonewalling by officials and threats and beatings from local henchmen. In recent years, companies have become increasingly aggressive in taking legal action against unfavorable reports.

At the same time, some reporters have come under fire for violating journalistic ethics for taking money in exchange for running favorable reports, or withholding unfavorable ones.

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BEIJING, Aug. 24 (Xinhua) -- Chinese computer giant Lenovo announced Thursday the recruitment of a fourth former executive of Dell, the world's largest personal computer maker, in just eight days.

Christopher J. Askew, former vice president of Dell, joined Lenovo as senior vice president in charge of the service department.

Before joining in Lenovo, Askew has been in charge of Dell's service in Asia-Pacific region and Japan.

Lenovo said on Aug. 17 that former president of Dell China David Miller had joined as president of its Asia Pacific operations. Miller, also senior vice president of Lenovo, will be based in Singapore.

The company has also named Sotaro Amanoas president of Lenovo Japan. Amanoas was formerly corporate director of Dell's home and business sales division in Japan.

On Aug. 21, the Chinese company announced former Dell senior vice president David Schmoock had joined as senior vice president in charge of a new center of excellence on market evaluation and strategy.

Before taking the position, David Schmoock was in charge of Dell's marketing in Asia-Pacific and Japan.

The participation of the four senior executives is considered a strong move by Lenovo CEO William Amelio to strengthen the company's business in the Asia-Pacific Region.

Lenovo appointed Amelio as CEO to replace Stephen Ward last December, the latter being in the position for only eight months.

Lenovo announced in the first half its sales reached 3.5 billion U.S. dollars, up 38 percent from the same period of last year.

The company's year-on-year sale growth of personal computers is 12 percent, with the sales in the Asia-Pacific region, excluding China, up 3 percent, in America up six percent and in Europe, the Middle East and Africa down 12 percent.

(c) 2006 Xinhua News Agency - CEIS. Provided by ProQuest Information and Learning. All rights Reserved.

Source: Xinhua News Agency - CEIS

Carrie Yu, DigiTimes.com, Taipei [Tuesday 22 August 2006]

Chen Jin-zhi, former vice president of Quanta Display's (QDI) manufacturing department, will lead a team of factory directors and engineers from QDI to join China's Shanghai SVA-NEC Liquid Crystal Display (SVA-NEC), with Chen to be the first vice president at SVA-NEC that comes from Taiwan, according to the Chinese-language Apple Daily.

Chen had been appointed special assistant at AU Optronics (AUO) to help in the preparation for the merger between QDI and AUO, which will completed in October of this year. He was recently reported by the Chinese-language Economic Daily News (EDN) to have already stopped working at QDI.

AUO declined to comment on the news.

SVA-NEC will work with Japan's Fujifilm for a fifth-generation (5G) color filter (CF) plant, according to the Chinese-language Commercial Times.

The China-based panel maker has technology support from Japan's NEC and is currently operating a 5G TFT LCD plant, with a maximum monthly capacity of 90,000 glass substrates.

SVA-NEC accounted for 41% of the 15-inch monitor panel market and continued to become the number-one supplier in this segment in June, according to WitsView Technology.

SHANGHAI -- Any company that wants to succeed in China -- and the list grows longer every day -- needs to understand what matters even more than an understanding of distribution networks and good relationships with government officials: executives on the ground who truly enjoy coaching their employees.

Whether they work in Beijing, Shanghai or Guangzhou, executives at multinationals who stay behind closed doors and rarely offer performance feedback or advice are bound to fail. That's because the local hires they need to run their offices and plants will be seeking out bosses who will help them advance their careers.

With China's economy growing so rapidly, multinationals and private and state-run Chinese companies are competing fiercely for talent. Young, educated Chinese from top schools with a few years of work experience often have their pick of entry and midlevel jobs in sales, marketing, finance, government relations and manufacturing.

They can also command much higher salaries now than they could a few years ago, though they're still paid far less than expats. Money, though, isn't necessarily their top priority when weighing offers. In a recent study of several dozen Chinese managers placed by Korn Ferry, Grace Cheng, the managing director of the search firm's Beijing office, says she found that "money is a less important reason to change jobs than the potential to grow and have a close working relationship with an immediate boss."

James Rice, a Tyson Foods vice president and the company's general manager in China, understands this sentiment and has made mentoring part of his job. A 16-year veteran in China, he previously worked for Dannon and Kimberly Clark. One of his current sales managers first worked for him as a secretary at Dannon and, with Mr. Rice's coaching, advanced to management. He quit Dannon when Mr. Rice moved to Tyson last May. "I didn't want to poach [from Dannon] but he was going to take another job anyway, so I asked him to work for me again," says Mr. Rice.

A few weeks ago, he recruited a young manager with an MBA degree from the University of North Carolina by promising training and promotion. The manager was weighing another offer from a multinational, and Mr. Rice didn't have a specific opening for him. But he was determined not to lose the chance to hire him. "He's very smart and speaks perfect English, and we're growing by more than 20% a year so it makes sense to hire ahead," says Mr. Rice, who plans to expand Tyson's China-based operations through acquisitions. "I pitched him very heavily on what I'd do to work with him and help him grow his career. I told him that for the next 12 months, he'll be my assistant, going with me wherever I go -- and then he'll get a line position," Mr. Rice says.

Stella Hou, who manages the compensation measurement practice for Hewitt Associates in China, is often a personal counselor as well as a career coach to her 30 employees. In the U.S. and Europe, "managers don't feel they should trespass into employees' personal lives, but Chinese employees often expect their bosses to do that," she says. She spent hours listening to an employee vent anger and grief when her marriage fell apart.

Young recruits, many of them products of China's one-child policy, also often require coaching on how to gain independence from their parents. Mr. Rice has had to tell some prospective employees that their parents aren't welcome to sit in on job interviews. And when an intern in Ms. Hou's office talked constantly about how much his mother takes care of him, co-workers began counting the number of times he invoked his mother's name and then subtly suggested he change that habit. "He'd say, 'my Mommy bought me this shirt,' or 'my mommy made me this meal,' " says Ms. Hou. "One day he brought her up 25 times."

She prefers hiring employees whose parents live in provinces far from Shanghai or who went to boarding school at young ages. "They've been less pampered" than only children who have had their parents' and grandparents' undivided attention, she says.

For their part, Chinese employees, especially those in their 20s and 30s, don't want to stay in any one job for more than a few years. They are looking for training and frequent promotions, and they're willing to job hop to advance.

Among the companies that has benefited is Beijing-based Sohu.com, one of China's main Internet portals. Founded eight years ago, Sohu.com, which now has 1,400 employees, has wooed hundreds of upwardly mobile young Chinese from multinationals. Andy Zhao, a group leader in human resources at the company, formerly worked at McDonald's, where he advanced from trainee to store manager over a six-year period. But then he quit, because his boss, he says, "was too vague" about his chances for future promotions.

He says he likes Sohu.com's innovative culture and his "caring bosses," who encourage him to "make fast changes every day." But he adds that how long he stays there will depend on "whether I can keep growing and changing."

This is the first of several columns about managing in China.

The World Today - Friday, 25 August , 2006 12:38:00
Reporter: Andrew Geoghegan
ELEANOR HALL: As BHP Billiton's multi-billion dollar profit result revealed this week, China's relentless growth has been a huge boon for many Australian business.

But there's a downside. A survey of Australia's manufacturing industry has found that this sector of the local economy is losing out to Chinese competition. In just the last year, manufacturers have suffered a net financial loss of almost $900 million in trade with China.

And as finance correspondent Andrew Geoghegan reports, some manufacturers are warning that the local industry will not survive.

ANDREW GEOGHEGAN: It would be an understatement to say China is a country on the move. The rapid pace of economic growth has created huge demand for private transport. In Beijing alone, 1,000 new cars are estimated to be pulling onto the roads every day.

JASON LI: The car and the growth of the car is just an extraordinary phenomenon in china.

ANDREW GEOGHEGAN: Jason Li, a Chinese Australian living in Beijing, works for the China Automobile Association.

JASON LI: It's really stuff of dreams. It's very much tied to growing economic development, the rise in middle class. It's such a status symbol. It's such a centrepiece of lifestyle now.

ANDREW GEOGHEGAN: And Australian business is cashing in on the Chinese dream.

GLEN DOBINSON: Certainly with the population based in China of around about 1.2 billion people, and that's a lot more than the Australian population, quite a few fold.

ANDREW GEOGHEGAN: Glen Dobinson is the Managing Director of Dobinson's Springs and Suspension, a Rockhampton manufacturer. He's been successful in capitalising on the growth of China's car industry.

GELN DOBINSON: So we are trying to capitalise on that four wheel drive market, particularly up there where they have suspension range of products and we've had a client dealing with us since early this year, who's had around three orders, and we have to grow on that base.

ANDREW GEOGHEGAN: However, Glen Dobinson says he's making hay while the sun shines. He sees some very dark clouds on the horizon in the form of cheap manufactured goods imported from China.

GLEN DOBINSON: We find, one of our competitors now is starting to import product out of China, and distributed though Australia as well, to our client base, we are going to have to compete head on with Chinese imports, which, I can only see in the long term, if that keeps up, we are ... it's not going to be an easy ride for us down the road further, yeah.

ANDREW GEOGHEGAN: To the point where you think you might struggle to survive here?

GLEN DOBINSON: Yeah, I think 10 to 15 years time it could be a different story to the stage, where if we can't compete, yeah, we might have to look at maybe importing and rebranding our product ourselves, that's, either that or you got no business. So that's something that we'll have to think seriously about in the long-term future.

ANDREW GEOGHEGAN: Glen Dobinson's problems are symptoms of an Australian manufacturing industry in decline.

And the car components sector is suffering the most acute pain, as highlighted this week by the struggling Ajax fasteners business in Melbourne. It's been bailed out by carmakers, because it can't compete with cheap imports.

HEATHER RIDOUT: A lot of the benchmark prices are China prices, so, if Ajax have to quote for their fasteners, they have a benchmark, Chinese fastener producers, as a price they have to match. So it is very tough.

ANDREW GEOGHEGAN: Heather Ridout is the Chief Executive of the Australian Industry Group.

It's surveyed 700 manufacturers and found that they've accumulated almost $7 billion in benefits from China. However, cheap Chinese competition has cost those businesses closer to $8 billion in lost sales.

Heather Ridout.

HEATHER RIDOUT: Australian manufacturers are now doing much more business in China. China has been identified as the strongest potential overseas market, for industry in terms of their exports, in terms of their overseas production, in terms of their overseas access to Australia. But in that term, the equation still remains strongly in China's favour with a loss of approaching $1 billion.

ANDREW GEOGHEGAN: While the outlook may be gloomy for manufacturers the forecast for Australia's services sector is bright.

Australian Andrew Stoler is a former deputy director general of the World Trade Organisation and is in China at the moment.

ANDREW STOLER: Just as the Australian manufacturing sector is nervous and sensitive up here in China, they have a very inefficient services sector, which is quite worried about increased competition from Australia.

ELEANOR HALL: That's Andrew Stoler, the former Deputy Director General of the World Trade Organisation, ending that report from Andrew Geoghegan.