China’s rapid economic growth has resulted in an increasingly individualistic society. Traditional values are still at the core of Chinese culture, however personal ambition and the desire for acknowledgment of achievement are beginning to define behavior, in particular within the younger generations. Consequently, many foreign companies face difficulties recruiting and retaining staff in China.
3.1: Current Trends in the Chinese Labor Market
3.2: Rules of Thumb for Hiring Managers in SME's
3.3: Engaging a Professional Recruiter
3.1: Current Trends in the Chinese Labor Market
High Turnover Rates
| Observation: |
It is increasingly common for Chinese employees to switch jobs every few years. |
| Fact: |
The younger Chinese are very competitive and are always looking for career progression opportunities to better position themselves in the global market. Hence, they tend to welcome headhunters and do not hesitate to take up better offers. |
| Outcome: |
Talent is easily accessible if one has the relevant contacts. However, it remains generally hard for employers to retain these talents in a single company for long-term commitment. |
Increasingly Competitive Salaries
| Observation: |
Salaries are generally becoming more competitive in China. In particular, salaries in 1st-tier cities are approaching levels found in other more developed countries. |
| Fact: |
The phenomenal economic growth of China has led to a rapid rise in salaries for managerial and higher positions. This is in contrast to the very stable and generally stagnant salaries found in developed countries. |
| Outcome: |
Cheap labor is disappearing in China for managerial positions and higher positions, especially in 1st-tier cities. |
Prevalence of Younger Upper Management
| Observation: |
Managerial and higher positions are increasingly held by young individuals. In fact, many directors of corporations in China are only in their early thirties. |
| Fact: |
Due to the Chinese economic reform in 1978, education standards have improved drastically over the past years. This has resulted in a great disparity in knowledge and capabilities between the young and old, especially in terms of English competency levels. This has thrown off the conventional thinking that senior candidates are always more capable than their younger counterparts. |
| Outcome: |
Highly educated young Chinese are now possible candidates for managerial and higher positions in China and such positions are no longer necessarily held by senior employees. |
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3.2: Rules of Thumb for Hiring Managers in SMEs:
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Look for passively available candidates for important positions
Passively available candidates tend to be highly capable individuals who are not threatened by the possibility of retrenchment. This is different from active job seekers who may have been retrenched due to performance-related issues. This is particularly important for positions that are responsible for a company’s profits and losses. Hence, companies are advised to be careful of being tempted by the extremely convenient and active online recruitment services in China. Instead, professional recruiters should be engaged to source for and recruit quality candidates from other companies.
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Expect to pay a premium for proficient users of English
Due to the great disparity in English competency levels existing in China, candidates strong in English can easily command premium salaries that are 30% higher than the average employee. This is partly due to the high demand for such candidates from multi-national corporations (MNCs).
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Do not depend solely on phone interviews when hiring in China
Phone interviews provide insufficient information for screening candidates. There have been cases of deceit in phone interviews where candidates engaged external help to ace through interviews without actually possessing the required competencies. Moreover, due to China’s great diversity of ethnic groups, it becomes even harder to assess the qualities and reliability of a person through a simple phone call. Hence, companies should always conduct face-to-face interviews for better evaluation of candidates and prevent the occurrence of frauds.
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Do not negotiate directly with candidates if you are unfamiliar with their cultures
This is particularly true for sensitive issues such as salary negotiations. Miscommunications tend to occur in such negotiations due to cultural differences in expression. This has repeatedly resulted in foreign companies dismissing good candidates prematurely. Hence, companies should always negotiate salaries and other sensitive issues via experienced recruiters or HR professionals who are familiar with the local culture.
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Keep in touch with selected candidates
Chinese candidates have very strong desires to succeed in the global economy. Hence, it is not uncommon to find them continuing to search for better opportunities despite having accepted an offer. Thus, it would be wise for hiring managers to keep in touch with the selected candidates and take note if they are still keen and available to join the company. This will help to avoid unnecessary surprises when the candidate fails to show up on the first day of work.
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Hire candidates from the vicinity if your office is located in 2nd/3rd tier cities
Foreign SMEs have been found to prefer candidates from 1st tier cities despite having their offices located in 2nd or 3rd tier cities. This is because these candidates are more likely to be able to relate easily to their employers in terms of both language as well as their expectations for standards of living. However, such candidates may find it difficult to adapt to the poorer living conditions of the lower tiered cities. This can eventually lead to high employee turnover rates and become detrimental to the company.
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Place greater emphasis on core competencies in 2nd/3rd tier cities
As English proficiency levels tend to be lower in 2nd and 3rd tier cities, it may be difficult to locate candidates who are both good in English and have the required competencies. One way to work around this is to hire candidates with English majors and train them in the relevant skill sets. Alternatively, companies can hire candidates based on the required competencies and leave the linguistic requirements to a specialized role within the company.
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3.3: Engaging a Professional Recruiter
Employers are advised to engage professional recruiters when sourcing for specific talents to fill important positions. In particular, they can help ensure the timely arrival of suitable candidates who are committed to and interested in pursuing the opportunity. This avoids the dire consequences of leaving such important positions vacant for extended periods of time.
Methodology
The key differentiating factor between a professional recruiter and an amateur lies in the
methodology adopted in their search for candidates. Professional recruiters are in control of
the entire process. They understand the specific needs of their clients and are able to accurately identify a best-fit candidate in the shortest possible time. In contrast, amateurs are heavily reliant on the quality of resumes they receive and may not be able to perform when faced with unfamiliar industries.
In particular, many professional recruiters use a precise search process called the Social Networking System (SNS). It helps recruiters to narrow down and identify potential candidates efficiently via recommendations from one’s contacts in the relevant industry. The process is then repeated for several degrees of separation until a best-fit individual emerges from the recommendations. Nonetheless, this is a complicated process and requires many years of experience in headhunting as well as in-depth knowledge of niche areas in specific industries to be effective.
Other Factors
Besides methodology, intangible soft-skills are also critical in headhunting. These are important factors that must be considered when evaluating the professionalism of a recruiter.
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Network
This determines the range of coverage in an executive search service. However, it does not necessary mean that a wider search is always better, as in-depth knowledge of a specific labor market may have been compromised for greater coverage. Hence, the suitability of a recruiter’s network depends on the job requirements and where such candidates can be found.
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Persuasion Skills
Best-fit candidates may be passively-available instead of being actively engaged in job-hunting. In other words, they are still employed and may require substantial persuasion to leave their established portfolio. Hence, a recruiter’s ability to motivate a candidate to explore new opportunities is a crucial, final step in headhunting. Moreover, the way an offer is positioned in terms of career development will also affect a candidate’s commitment to the client company after the end of the probation period
Hence, it is important to engage a capable recruiter, especially for positions that are hard to fill. Otherwise, mismatches may occur repeatedly, wasting both time and effort of all parties involved.
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