Recruiting in China

Monday 28 August 2006
Australian manufacturers are experiencing increased competitive pressures in their dealings with China, while at the same time they now see China as the most important market in which to grow their business outside Australia, according to a major new study released today by the Australian Industry Group.

The report, Australian Manufacturing and China: Deepening Engagement has estimated that while Australian manufacturers in 2005/6 have accumulated over $6.8 billion in benefits from China (for example, through increased exports to China and savings from using Chinese global supply chains), the benefits fall short of the losses in sales in domestic and overseas markets from competition from China (totalling over $7.6 billion), resulting in a net financial loss of $880 million.

Ai Group chief executive Heather Ridout says the findings, based on a survey of 700 Australian manufacturers, confirm that China is imposing ever increasing competitive pressures on their businesses.

"Over the past two years, the proportion of companies impacted by China has grown from 70% to 84% and China is making deeper inroads into Australia's domestic and overseas markets," she says.

"Manufacturers identified China as the strongest potential overseas market"

The study found that among surveyed companies around 8% of manufactured exports go to China; one in every 16 surveyed companies has an operation in China; and China is the chief source of foreign inputs into domestic production. Annual income from manufacturing investments in China is estimated to be close to $1 billion.

"While very large manufacturers and affiliates of foreign owned entities are starting to reap slight net financial gains, the majority of manufacturers are finding it tough to secure benefits," Ridout says.

"Overall there remain considerable concerns about non-tariff barriers in China, including the lack of intellectual property protection. A major finding of the study was that Australian businesses are highly concerned about the incidence of Chinese made counterfeit and pirated goods being sold on the Australian market.

"The perception of Australian manufacturers is that dumping of Chinese goods on the Australian market (at below the price to make and sell in China) is also accelerating significantly.

"Consequently, many manufacturers remain unconvinced of the overall benefits of a Free Trade Agreement, although support for an FTA is growing and has increased from 13% in 2004 to 24% in 2006."

Ridout calls on the Federal government to put in place mechanisms as part of its planned Industry Statement so that Australian manufacturers can boost their competitive position in their business dealings with China.

"We need to strengthen our innovative capacities, build world-class skills among our manufacturers, and be prepared to deal with the ever increasing impact of Chinese competition, as well as helping to open up the Chinese market to Australian businesses so that they can establish partnerships and build supply chains," Ridout says.

Ai Group has also welcomed the recent clarification of the government's position that the existing tariff phase-down plans for the Textile, Clothing and Footwear and auto industries were "not negotiable" under FTA discussions with China.

BEIJING, Aug. 25 /Xinhua-PRNewswire/ -- Analysys International, a leading Internet based provider of business information about technology, media and telecom (TMT) industries in China, says in its recently released report ''China Online Recruitment Market Quarterly Tracker Q2 2006'', that China's online recruitment market reached RMB 160.9 million in the second quarter of 2006, increasing 8.44% quarter over quarter.

According to the report, in the second quarter of 2006, online recruitment revenues from nationwide recruitment websites accounted for 76.4% of the total online recruitment market in China, and revenues from provincial websites accounted for 19.3% of the total market.

As the entire market size expands, online recruitment service providers began to emphasize on mobile Internet applications and provided SMS services. China's rapid growing working population brings huge development potential for online recruitment market. Overseas venture capitals are also giving attention to this market.

Analysys International says those vendors who can provide individualized services will be able to take the lead in charging service fees from users. More and more online recruitment websites have strengthened local market development.

Online service and offline promotion have become a major profit pattern of online recruitment business. As online recruitment industry develops, the market will gradually be segmented. Industry-based specialized services will be more and more favoured by users.

This subject is further discussed in Analysys International's research report ''China Online Recruitment Market Quarterly Tracker Q2 2006''. For more information, please check the website: http://english.analysys.com.cn/ .

CHICAGO, Aug. 23 /PRNewswire/ -- CareerBuilder.com, the U.S.'s largest online job site with more than 23 million unique visitors* and over 1.5 million jobs, announced it is adding another partner, 51job, Inc., to its international network to bring more recruitment resources to employers and job seekers. 51job is China's leading human resource services provider and operates http://www.51job.com/ , the Web site with the most registered members, the largest resume database and the highest daily traffic in China.

Under the exclusive agreement, CareerBuilder.com and 51job will have links to each other on their sites as well as sell job postings and access to their resume databases. The alliance will provide job seekers in both countries instant access to a multitude of new job opportunities in virtually every industry.

"The recruitment landscape has changed dramatically; employers now need to have access to candidates in multiple countries," said Farhan Yasin, President of the International Group at CareerBuilder.com. "Partnering with 51job will not only introduce CareerBuilder.com clients to China's most influential recruitment site and vice versa, it will allow CareerBuilder.com access to the fast-growing Chinese recruitment market."

"We are delighted to collaborate with areerBuilder.com in the U.S. and Canada," said Rick Yan, President and Chief Executive Officer of 51job, Inc. "We believe this alliance will allow both companies' clients access to millions of potential candidates."

*comScore Media Metrix, May 2006 About 51job

51job, Inc. is a leading provider of integrated human resource services in China with a strong focus on recruitment related services. Offering a broad array of products and services, 51job connects millions of job seekers with employment opportunities and streamlines the recruitment process and human resource administration for tens of thousands of companies in China. Through print advertisements in 51job Weekly and online recruitment services at http://www.51job.com/ , both domestic Chinese employers and multinational companies alike are able to attract, identify and recruit new employees. 51job also provides executive search services and a number of other value-added human resource services, including training, business process outsourcing and salary surveys. 51job's nationwide office network in China spans 25 cities operating 23 local editions of 51job Weekly and Hong Kong.

About CareerBuilder.com

CareerBuilder.com is the nation's largest online job site with more than 23 million unique visitors and over 1.5 million jobs. Owned by Gannett Co., Inc. , Tribune Company , and The McClatchy Company , the company offers a vast online and print network to help job seekers connect with employers. CareerBuilder.com powers the career centers for more than 900 partners that reach national, local, industry and niche audiences. These include more than 150 newspapers and leading portals such as America Online and MSN. More than 250,000 employers take advantage of CareerBuilder.com's easy job postings, 18 million-plus resumes, Diversity Channel and more. Millions of job seekers visit the site every month to search for opportunities by industry, location, company and job type, sign up for automatic email job alerts, and get advice on job hunting and career management. For more information about CareerBuilder.com products and services, visit http://www.careerbuilder.com/ .

NEW YORK, Aug 27 (Reuters) - China may have plenty of man power, but it could also use some help from Manpower.

U.S. staffing company, Manpower Inc. , is one of a number of business recruiters putting emphasis on the world's most populous country, where a rapidly developing economy is driving the demand for engineers, finance professionals and technology specialists.

China's growth rates of about 10 percent per year, which already makes it the world's No. 4 economy, pushes companies to develop leaders at a faster pace than most other countries.

A McKinsey & Co. study estimates that, within five years, China will need 75,000 executives who have either Western technical skills or language ability -- ideally, both. Only about 5,000 are in the work force now.

"The challenge is not in finding 500 or 1,000 people to man the factory. The challenge is in finding leadership skills and functional management skills," said Iain Herbertson, president of Asia-Pacific for Manpower, which has 350 consultants in 11 Chinese cities. About half its contracts are for information technology workers.

For now, the numbers are relatively modest. Of Manpower's $4.4 billion in second-quarter revenue, the "other" segment -- which includes China, Japan and Australia, as well as Mexico -- reported sales of $577 million. Its operating profit of $15 million was about 9 percent of Manpower's quarterly total. ADVERTISEMENT

But the segment is among the company's fastest growing. Within three to five years, Manpower will have a staff of 1,000 to 1,600 in mainland China.

New rules this month allowed foreign companies to own a controlling stake in their local joint ventures if they set up shop in Pudong, the fast-growing financial center in Shanghai.

The move is part of a broader relaxation of rules, which should help draw more companies to China, and will enable Manpower to expand its range of services, Herbertson said.

"Our business is more than doubling every year," Herbertson said in a telephone interview from Shanghai.

Monster Worldwide , which this year raised its stake in ChinaHR.com to 45 percent, may take majority control of the venture by 2008, though the unit is currently losing about $2 million per quarter.

"We don't expect it to be (profitable) because we are at the beginning of the beginning," said Marcel Legrand, Monster's senior vice president of strategy and corporate development. "Profit is not of great interest to us in that particular market -- it's about an investment."

ChinaHR has about 600 staff and 4 million resumes on file, but those numbers will grow as more Chinese go online, Legrand said.

Monster, parent of the world's largest recruitment Web site, followed customers like Procter & Gamble , L'Oreal , and Hewlett-Packard to China, which fits with a goal for international operations to account for more than half of its revenue by next year.

That global expertise, including serving multinationals in other markets, is what differentiates companies like Manpower and Monster from their smaller competitors.

"We can bring to China the best of what happens in Brazil, or what happens in Korea, and they can help us export their best practices," Legrand said.

This week, Monster hired a former Nike Inc. executive, Tony Balfour, to head its Asia-Pacific operations.

He will have competition.

Rival job site Careerbuilder.com on Wednesday said it was entering the Chinese market in an exclusive deal with human resources company 51job Inc. , to link to each others' sites and sell job postings and access to their resume databases.

At executive recruiter Heidrick & Struggles International Inc. , Asia-Pacific operations had faster revenue growth and highest profit margins than either the United States or Europe. The region accounts for 10 percent of total company sales, and China about a fifth of that.

Since rules are different depending on the services offered, Heidrick owns 90 percent of its Chinese joint venture, said Kevin Kelly, who heads Heidrick's European and Asian operations, adding that consumer goods, technology and industrial companies are its main clients.

Financial companies, including investment banks, will need experienced staff starting in 2008, when new rules take effect under China's commitment to the World Trade Organization.

Heidrick's China operations are expected to double within three years, and the company is recruiting Chinese-speakers in the United States and Europe for positions there, Kelly said.

"European and U.S. markets are more mature, so everyone sees China's huge potential for developing or expanding their businesses," Kelly said.

21/08/2006
By Frank Mulligan, Talent Software

The labor law in China is about to be changed radically. The current law has been in operation for many years but it was created many years ago and necessarily has weaknesses.

Setting out the basis of the current law, I thought, might be a good way to build a base for comparison with the expected changes in the new law.

So here is a quick summmary of where we are now. It is meant as a quick refresher and should not be taken as legal advice.

* Employer and employees need to enter into a written employment contract. However, an oral contract is also enforceable.

* Contracts can apply to a fixed period, an open period, or a specific project.

* There can be a trial period of no more than six months during which time the employer can terminate the employment contract.

* The law allows for a clause requiring employees to keep business information confidential.

* Employers can terminate on 30 days notice, if the employee is not able to do his work due to illness or injury but if he is still being treated this does not apply.

* Termination can be carried out if the employee is not suitable for the work he is doing. This decision must be made after training or alternative work has been given.

* The contract becomes unenforceable because a ’major situation’ has changed on which the employment contract mainly relies. This has not been defined.

* Employees should give 30 days notice except when they are are in the trial period or the employer does not satisfy his end of the contract.

* Redundancy is a vague area that allows an employer to dismiss an employee if the company is about to go bankrupt. Payments to employees equate to one month’s pay for every year with the company.

* The work week is an 8-hour day with no more than 44 hours per week and at least one day off per week, in practice always 2.

* Paid leave is mandatory but depends on local regulations. There is a 90 days maternity leave provision.

* Disciplinary action has a definite path. First an oral warning, then a written warning and finally, dismissal. If this is not followed the dismissal is invalid.

* If the breaches of discipline is very serious instant dismissal is available.

So we can easily see that the basic labor laws in China are not so complicated and many areas are sufficiently vague as to require a new definition.

The current regulations are under review and the government has invited submissions from concerned parties. The new contract law is likely to differ considerably from the current law in terms of details and provisions. The object is to make it fairer and clearer for all parties, and to underline the rights of workers in a market that is considerably different from the one that pertained when the original law was written.

Next week we can make a comparison with what is expected in the new law.

Reuters
Published on ZDNet News: August 23, 2006, 8:37 AM PT

IBM, the world's biggest computer-services firm, said on Wednesday it could open four offices annually in second-tier Chinese cities in coming years to take advantage of robust growth and a deep talent pool.

Any expansion would come after IBM's Asia-Pacific office completed its move to Shanghai from Tokyo this year, attracted by vibrant growth and deep talent pools in China.

The move also brought the company closer to India, IBM's fastest growing market.

"We set up four new offices last year," Michael Cannon-Brookes, vice president for business development in China and India, told Reuters on Wednesday.

"And that pace is sustainable in the near term."

IBM, based in Armonk, N.Y., had 22 offices in China at the end of last year. It employs 43,000 staff in India, the center of the world's software services industry, and 7,300 in China, the world's manufacturing hub.

"That's why I'm in Shanghai," said Cannon-Brookes.

IBM's business in India grew 61 percent in the first quarter from a year earlier as telecoms, banking, insurance and services sectors bought computer hardware and services to spur expansion.

Its revenue in China rose 15 percent. The company did not give sales figures for individual countries, he said.

IBM, which derives about half its revenue from information technology consulting and outsourcing, has made India a global delivery hub for software needs and client services.