Recruiting in China

Apple Computer Inc.'s investigation into claims of poor working conditions at a Chinese iPod factory found no forced labor or other serious violations, the company said Friday.

Apple added that it was taking immediate steps to deal with excess overtime and other issues.

The probe by the Cupertino, California-based company, was in response to a report by a British newspaper, the Mail on Sunday, which alleged that workers at the factory were paid as little as 27 British pounds (US$50; euro40) a month and forced to work 15-hour shifts making the digital music players.

"The team reviewed personnel files and hiring practices and found no evidence whatsoever of the use of child labor or any form of forced labor," Apple said in a report on its Web site that summarized the findings of its audit of the facility.

However, the probe did find that in many cases workers were exceeding the company's limits for overtime, which specify a maximum of 60 hours or six days a week.

"We found no instances of forced overtime," the report said. But it said weekly limits were exceeded 35 percent of the time in a seven-month period and that employees worked more than six days in a row 25 percent of the time.

The company running the factory, which was not named in the report, was ordered to enforce Apple's overtime limits, it said.

The inspection also found that in at least two instances workers were made to stand to attention for disciplinary reasons.

"Apple has a zero tolerance policy for any instance, isolated or not, of any treatment of workers that could be interpreted as harsh," the report said. It said the factory has launched an "aggressive" manager and employee training program to prevent such behavior, it said.

While conditions in the factories, cafeterias and most dormitories were good, the audit found overcrowded conditions at two leased dormitories, which are now being expanded to allow more space.

The factory, which supplies electronics components and accessories to other companies as well as Apple, is a small city in its own right, with clinics, recreational facilities, buses and 13 restaurants serving its 200,000 workers.

By Kelly Proctor and Tina Qiu Bloomberg News

Published: August 16, 2006, Shanghai

In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire enough accountants, said Anthony Wu, a senior adviser and former chairman of the Ernst & Young office in China.

The need for people qualified to work in the financial field shows no sign of decreasing. China recently lifted a one-year ban on share sales, and public companies are required to meet international accounting standards by next year, spurring demand for accountants.

The country has 69,000 licensed accountants and needs more than 300,000, said Chen Yugui, secretary general of the Chinese Institute of Certified Public Accountants. China did not have a university major in certified public accounting until 1994.

"The gap between the need and the supply is still huge," Chen said.

Other professions are suffering, too. Even though a third of China's university graduates receive engineering degrees, international companies cannot find enough engineers. Many graduates are not qualified because they are steeped in theory and have not learned to handle projects or work in a team, McKinsey wrote in its report.

Freshfields, a law firm based in London that has offices in 18 countries, is searching for qualified lawyers as part of an expansion that will add as many as 65 attorneys in China during the next five years, said Mary Wicks, human resources director for Freshfields in Asia. Freshfields is recruiting lawyers who are fluent in Mandarin and have international law degrees.

China has 120,000 lawyers, or one for every 10,800 people, compared with a ratio of one to 375 in England and Wales. "Competition is tough," Wicks said.

Companies are increasing pay and benefits to attract talented workers. The average salary in China for accountants at firms like Ernst & Young and Deloitte & Touche Tohmatsu rose 30 percent to $9,000 last year, according to a survey by Mercer Human Resource Consulting, based in New York.

Ernst & Young is offering more vacation time and flexible work schedules, said Catherine Yen, the firm's head of human resources for China. In the first half of this year, average annual wages in urban China rose to $1,160, or 14.3 percent, from a year earlier, China's National Bureau of Statistics reported.

SHANGHAI In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire enough accountants, said Anthony Wu, a senior adviser and former chairman of the Ernst & Young office in China.

The need for people qualified to work in the financial field shows no sign of decreasing. China recently lifted a one-year ban on share sales, and public companies are required to meet international accounting standards by next year, spurring demand for accountants.

The country has 69,000 licensed accountants and needs more than 300,000, said Chen Yugui, secretary general of the Chinese Institute of Certified Public Accountants. China did not have a university major in certified public accounting until 1994.

"The gap between the need and the supply is still huge," Chen said.

Other professions are suffering, too. Even though a third of China's university graduates receive engineering degrees, international companies cannot find enough engineers. Many graduates are not qualified because they are steeped in theory and have not learned to handle projects or work in a team, McKinsey wrote in its report.

Freshfields, a law firm based in London that has offices in 18 countries, is searching for qualified lawyers as part of an expansion that will add as many as 65 attorneys in China during the next five years, said Mary Wicks, human resources director for Freshfields in Asia. Freshfields is recruiting lawyers who are fluent in Mandarin and have international law degrees.

China has 120,000 lawyers, or one for every 10,800 people, compared with a ratio of one to 375 in England and Wales. "Competition is tough," Wicks said.

Companies are increasing pay and benefits to attract talented workers. The average salary in China for accountants at firms like Ernst & Young and Deloitte & Touche Tohmatsu rose 30 percent to $9,000 last year, according to a survey by Mercer Human Resource Consulting, based in New York.

Ernst & Young is offering more vacation time and flexible work schedules, said Catherine Yen, the firm's head of human resources for China. In the first half of this year, average annual wages in urban China rose to $1,160, or 14.3 percent, from a year earlier, China's National Bureau of Statistics reported.

SHANGHAI In the three years since receiving his engineering degree in Shanghai, Jason Zhang has switched jobs twice and quintupled his salary as overseas companies scour China for professional workers.

"If you have language skills, if you have technical skills, it's very easy to find a job," says Zhang, 26, who speaks fluent English and now writes software for International Business Machines. "There are more jobs than even two years ago because of the outsourcing from Europe and the U.S."

However, Zhang is an anomaly in China and his successful job moves illustrate the large demand in China for qualified workers.

Employers like General Electric, Freshfields Bruckhaus Deringer and Ernst & Young are struggling to find engineers, lawyers and accountants as Chinese universities fail to turn out qualified professionals, especially those who speak English.

The shortage is threatening expansion plans and driving up salaries in China, the world's fastest-growing major economy.

"We could argue that more than water, energy and infrastructure, talent is the greatest constraint on China's growth," said Andrew Grant, who heads the greater China office of McKinsey, a consulting firm that advises two-thirds of the Fortune 1000 companies.

Fewer than 10 percent of Chinese job-seekers are qualified for accounting, finance and engineering jobs at overseas companies, according to a November report by McKinsey that was based on interviews with more than 80 human resources executives. Most lack English skills and a "cultural fit," the report said.

Ernst & Young, which plans to expand its work force in China fivefold, to 25,000, in the next decade, has turned down clients because it cannot hire

By Anita LaFond, News Editor, Manufacturing.net
Manufacturing.Net - August 11, 2006

Cherokee International Corp., a power supplies manufacturer, will be closing its manufacturing operation in Guadalajara, Mexico by the first quarter of 2007 and is moving those production operations to a new facility in Shanghai, China.

The Guadalajara plant, in operation since 1988, recently employed about 250 full time and temporary employees to produce power supplies. Cherokee owns the building and is seeking a buyer for the 35,000-square-foot property.

In February 2006, Cherokee opened a new, 120,000-square-foot, state-of-the-art manufacturing facility in Shanghai, China. As part of Cherokee's China strategy, they are moving and consolidating, into the new facility, high-volume, low-mix manufacturing from plants that are a higher cost basis to operate.

The design and location of Cherokee's new Shanghai facility optimizes their and their customers' supply chains as an increasing number of Cherokee's customers and suppliers have their own manufacturing operations in China. It also positions the Company to take advantage of the overall business growth in Asia.

Cherokee expects annual recurring savings of approximately $1,700,000 to $2,200,000, plus the value of the facility once it is sold. Cherokee also expects restructuring costs of approximately $900,000 to $1,400,000 to be incurred over the third and fourth quarters.

Amwal Investment, a prominent Omani investment firm and the Cayman Islands-based NCL Fund Management Ltd have launched a $400m real estate fund along with Simon Zhu, a Chinese real estate developer to tap into the thriving Chinese real estate market. The five-year old fund would focus mainly on the residential and commercial properties in some of China’s fast-growing second-tier cities.

The ‘Wanyuan-New China Land Fund’ would be a Cayman Islands unit trust, which would be managed by NCL Fund Management, a Cayman Islands entity. “This a great opportunity for GCC investors to participate in the huge growth opportunities in China,” said Jasser Saleh Al Aulaqi, CEO of Amwal.

The real estate fund which has a minimum subscription of $5 million for institutions and $1 million for individuals, expects returns of at least 15 percent. The fund aims to develop residential, retail and land master-use projects in provincial cities, apart from acquiring partially complete for existing developments from distressed owners in order to attain a cost or time advantage.

US PC giant Dell Inc is facing an exodus of top executives from its China operations that could affect its business in one of the world's most dynamic PC markets.

Dell yesterday said Junlin Liu and Amit Midha will replace David Miller, president of Dell China, who "has left Dell."

David Miller's resignation followed that of his co-president, Foo Piau Phang.

Foo left Dell last October and joined local PC maker Shenzhen HASEE Group Co Ltd.

Miller will reportedly join Chinese top PC maker Lenovo, which could deal a big blow to Dell.

Last December William Amelio, Dell's Asia-Pacific and Japan president, joined Lenovo as chief executive officer.

Speculation has been rife that Miller's resignation is related to Dell's underperformance in China; but this was denied by a company spokeswoman.

Dell has been performing "pretty well" in China, she said, adding Dell China's PC shipment and revenue increased by 40 per cent and 29 per cent respectively in the latest fiscal quarter.

But analysts said Dell's business in China is slowing down.

According to Beijing-based research house Analysys International, Dell's share of China's notebook PC market grew to 9.4 per cent in the second quarter compared to 9.2 per cent in the previous quarter.

Its share of the desktop market slipped to 7.5 per cent from 8.3 per cent.

"Dell's notebook growth, in fact, is part of an industry-wide boom," said Li Chong, an analyst with Analysys International.

"Dell is facing hiccups in China due to the inadequate localization of its direct-business model."

Dell has been successful in implementing its customer-focused direct model in many countries, but such a practice has not been well received in China, Li said.

Unlike US consumers, Chinese are usually reluctant to open their wallets if they cannot experience the consumer products they wish to buy.

Dell China executives have been trying to diversify the model by bringing in distributors and resellers.

This may have caused disagreement between Dell China and its US headquarters, which could partly explain the exodus of its top executives in China, Li said.

Lenovo has taken on Dell since it acquired IBM's PC-making business, learning from the US firm's direct model to cut costs.

"Lenovo is now taking a diverse approach to China's PC market, which is geographically complicated. But Dell is still insisting on the purity of its direct model," Li said.

Dell's woes are in stark contrast to rival Hewlett-Packard, which has successfully introduced both a distribution system and a direct selling model to its China operation.

HP China has managed to grow both its notebook and desktop shipment in the second quarter.

But Steve Felice, president of Dell Asia-Pacific and Japan, defended Dell's direct model.

"We are growing strongly and profitably, because more and more customers in China are recognizing the superior value of direct relationships with Dell," he said.

Source: China Daily

Chinanews.cn)
Updated: 2006-07-26 16:33

The Social Sciences Documentation Publishing House under the Chinese Academy of Social Sciences recently published the Chinese Human Resources Development Report in 2006. The report points out that due to some traditional concepts and institutional defects, human resources in China have not been fully utilized and it is alarming that a great part human resources are wasted.

Regarding the human resources waste, researchers define the following four circumstances: firstly, some people are allocated to the right position, but their capabilities are not fully utilized. In other words, these people can do more in addition to their present work; secondly, some people are allocated to the wrong positions; thirdly, some people are superfluously allocated to a certain position. A job which can be done by three people, for example, is actually allocated to five people.

It is estimated that about 25 million professional people in China were wasted in 2005,because their capabilities were not brought into full play. Economic ally, this alone caused a loss valued at around 900 billion yuan.

Yu Zhonghua, one of the writers for the report, said that in order to assess how China utilized its human resources and what effect it brought to the social and economic development, they kicked off a large investigative campaign in various departments in May, 2005. During this campaign, they issued 8,000 questionnaire forms to various Party and political institutions, national public institutions, and other organizations.

By analyzing the result, researchers find that in China, a strange phenomenon prevails in the human resources market. Employers like to hire people with a master's or doctoral degree and think that the more these people are in their company, the better. Those who hold a B.A. or B.S. degree can be put on hold. Those who have graduated from junior college or vocational schools should not be considered at all.

In light of this, Yu said, the waste of human resources has already caused practical harm to the society. As a typical reflection of such waste, a large number of people in society tend to pursue a higher college degree, consequently causing college education to expand overly rapidly. As a result, vocational education is adversely affected and a lot of talented people choose to go abroad to find a job.