May 052012

China is a conundrum when it comes to human resourcing. With more than 6,000,000 graduates entering the job market this year it should be an employers’ dream, right? Especially given the oft-cited perceived advantages of a foreign employer. Not so fast. As with so many China stats without a healthy dose of perspective they risk overwhelming to the point of irrelevance. For a start most grads are still soaked up by the state owned enterprises (SOEs) where cheap liquidity means over-resourcing is routine. In fact once you drill down to what you re really looking for you’ll find that China is strapped for employees. Tertiary education is a bit uneven and the aforementioned SOEs aren’t overwhelmingly discriminating.

There are positives though, English-language competencies are improving and there are very many young enthusiastic and entrepreneurial Chinese. One perennial problem is job-hopping – evidence again of there being little shortage of demand for employees. This is a real problem and probably the overwhelming issue for an agency whose business is fundamentally built on being able to develop relationships – not to mention guan’xi (关系) – over a reasonable time frame. Losing your staff every two years or less creates ongoing instability – especially during establishment and reputational build through to your China operation achieving critical mass.

How do foreign employers compare in hanging on to their staff? One study showed that Japanese and Hong Kong employers are more successful at holding onto their Chinese employees compared with their US and European counterparts. Some of this might simply be due to better cultural compatibility (after all Hong Kong hardly leads the way in terms of progressive employee relations and Japan offers very traditional workplace relations). It is essential though that western companies embrace their new China operation from the outset as an integral part of their global offering. Given the shift in global economic power any agency for whom their China operation is a crucial commitment to offering a global offering should be looking to a 360 degree approach in learning just as much from their new market as they want to benefit from it. You don’t have to look far to find potential examples, eg the uptake of social media in China and its creative utility puts developed markets in the shade for innovation. Too often the process of induction ends up being a one-way exercise in addressing the functional underpinnings of traditional healthcare communications techniques and agency SOPs. The new operation is seen as a minor add-on. Of course the basics are important but can be alienating given the differences in nature of the business and sheer amount of cultural assimilation required at the outset. Social enterprise utilities like Yammer and SocialCast should be implemented if they are not already and interaction across the business network should become second nature with globalized, multicultural, self-directed teams being the expected norm.

While there are rigid employment constraints and the unevolved nature of Chinese employee contracts can make hiring in China seem somewhat dominated by legalistic procedure, western companies don’t help themselves by for example considering the hiring of a skilled local HR manager at the outset as an avoidable indirect expense. In reality finding the right HR is a priceless up-front investment.

Top 10 tips then for hiring for your China start-up

  1. Appoint an experienced Human Resources Manager; after all your business has no assets without its people
  2. Generally avoid recruitment agencies generally for most positions – they will provide only the barest functional matches and are inclined to offload screening to the client
  3. Utilise social media to reach out to potential candidates; LinkedIn is a good starting point but your HR Manager will know the Chinese channels
  4. Provide a realistic job preview prior to an offer – say a two-week pre-contract period to ensure the best chance of compatibility
  5. Make a point of understanding the essential contractual conditions of your employees; there is no getting away from the fact that there are big cultural differences… understanding these elements will help you get a wider perspective
  6. Provide a comprehensive induction with history and overview of the company and be clear on the mission and vision and China’s key future contribution
  7. Provide a clear  appraisal system and offer clear line of sight – be prepared to be directive at the outset
  8. Be creative with incentives and ensure positive instrumentality – eg consider a secondment to HQ once value is being demonstrably delivered
  9. Avoid a sense of ‘them and us’ – encourage your growing China team to profile themselves in the wider organization; engage regularly and in person with your China team
  10. Consider possible China in all pitch opportunities – fully leverage your new resources’ potential