5 Top Hiring Mistakes in China

I´ve just been watching the webinar “The Talent Management in China and How to Overcome it” presented by talent management expert Michelle LaVallee, Founder and Partner at Management Success in China. The recording is full of good insights and lessons on talent management.You may watch this webinar at China Business Webinars.

On the recruitment topic, Mrs LaVallee emphasizes on the fact that desperate and urgent hiring leads into hiring the wrong person 75% of the times. Today I will share with you Mrs LaVallee´s “Top Hiring Mistakes in China” list and some of her recommendations:

1.Basing decision on resume content and short behavioral based or hypothetical interviews.
Some resumes are just out of this world. Quite frankly, the great majority of them are simply not true. They are made up, there are all kind of mistakes with titles and responsibilities.
Checking those resumes and making sure that they are factual is an incredibly important step to increase your hiring success in China.

2.Using vague job descriptions to recruit and interview.
Most job descriptions are just quickly put together to do some recruiting. They are too long, the employer does not look at them, they are not used in performance reviews, development or coaching. If you are not using them, they are just a waste of time and you may need to rethink that strategy.

Mrs LaVallee explains that the best alternative is to create what she calls a “job scorecard”. A job scorecard is a brief document, could be just two pages an it will cover the following points:
-Identify the mission for the role, in simple language

-Identify 5-7 yearly key accountabilities with specific measures of success and actual deliverables for a High Performer

-Rate Minimal Competencies- the skills you must have to get the job (so you can actually rate the candidate as you are conducting interviews).

3.Not investing in interview training for hiring managers
The most important decisions regarding “talent” are too often based on poorly conducted interviews.It is all based on hypothetical questions and, unfortunately, your interviewees know well how to answer hypothetical questions and know how to give answers that sound great (they have done plenty of interviews!). You need to base the interviews on specific questions on their experience, on what they have actually done and not on “fake questions”.

Some advice to improve your hiring success:
-Invest in interview skill training for all hiring managers

-Make time in your schedule to do tandem interviews (2 people) with your hiring managers

-Observe your hiring managers interview skills

4.Not conducting thorough reference checks
If you do not conduct thorough reference checks you are setting up for failure. There is here the myths that it is not culturally appropriate to do reference checks in China. Reality is quite different as most companies are happy to share their experiences about colleagues and you are able to ask a lot of questions.

5.Failing to look within for promotable talent
There is a lot of talented people in China. There should be a special focus on assessing them early and developing them.

“Talent review” is simple but very useful tool that helps you measure the success of your hiring and promotion decisions (the presentation shows an example of this tool). It helps you understand and track performance, suitability to the job and plan carrier steps and promotions.

What do you think? Are you following the right hiring steps?

If you are interested in this topic you may also like to read the following posts:

* 3 Trends in the Chinese Labour Market
* 5 Recruitment Tips for Entrepreneurs in China
* 7 Tips on How to Recruit Managers for SMEs in China
* Retaining your Chinese Employee
* 6 Tips on How to Retain your Chinese Talent
* 10 Reasons Why your Chinese Employee is Leaving You
* Why are your Chinese Employees Leaving You?

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Why are our Chinese Employees Leaving Us? (part 2)

In my last post, Christian Groeger and Valourie Xuan, from Fiducia Management Consultants, shared with us the Chinese employees’ reasons to change jobs (their own drivers –if you missed it you can read them here). In today’s post they add a new perspective. What are employers doing that contributes to employees high rotation?

1. Top-down leadership approach
This is a generational issue. Many middle-aged Chinese employees in leading or middle management positions – as well as many expat managers frustrated by a perceived lack of independent handling capabilities with their staff – tend to follow a more top-down leadership approach and micro-managing style. This may work for some employees, but will put off others – especially the ones who are ambitious and capable.

2. High competition over small pool of qualified staff
Especially in industrial and service industry centers such as Shanghai or the Pearl River Data, a huge variety not only of FIE’s, but nowadays also SOE’s and Chinese Private Enterprises vie for the same pool of qualified staff, providing ample opportunities for these staff to select better offers and giving rise to a vibrant and aggressive HR industry. In addition, highly qualified Chinese staff is usually very hard to motivate to relocate to 2nd tier or 3rd tier locations where generic staff positions are easier to fill.

3. Lack of adequate career paths and top positions for local employees
Many FIE’s have an open or implicit policy to staff high-level positions with foreigners. With the relatively small scale of operations of most FIE’s as compared to big SOE’s, specialization opportunities may also be limited.

4. Uneven pay structure between long-term employees and newcomers (internal inequity)
In order to attract new talent, employers often have to pay a premium to new hires with good qualifications. It is very difficult to keep these payment premiums confidential, as long-term employees will try to benchmark themselves against these newcomers with their income level.

5. Long-term unsustainability of rising wages and not matching profitability/efficiency increases
The above described problem can lead to a self-perpetuating “vicious circle” if it is not sustainable in the long run. Income levels and raises therefore need to be linked to specific goals to increase underlying profitability and/or efficiency.

6. Inadequate training and development measures (also too much training without proper employee checks & balances)
In order for employees to achieve their goals, they require proper training and development opportunities. This needs to be in line with and reviewed against the company goals so as to prevent a mismatch of resources and employee frustration or, in the worst case, training employees for competitors.

7. Lack of communication inside the company
Dissatisfaction by employees is usually only communicated when it is too late and the decision to quit is hard to change any more. This problem is potentially more pronounced in inter-cultural settings.

8. Problems with practical application of pay-for-performance schemes / wrong incentives
Performance-linked targets are often not set in a SMART (specific, measurable, achievable, realistic and timely) way, not thoroughly reviewed or provide incentives which are not in line with the company goals. This can lead to a lack of clarity and transparency and increase the risk of employee alienation.

Do you share their views?

10 Reasons Why your Chinese Employee is Leaving You

I recently attended an event hosted by Servcorp Shanghai where Christian Groeger and Valourie Xuan, from Fiducia Management Consultants, delivered a presentation entitled “Winning the Talent War (in China) in 2011”.

High staff rotation is a big challenge for companies in China. Mr. Groeger approached the “talent war” drivers from both the employee and the employer’s perspective. Today I reproduce here Mr. Groeger’s insights about drivers and external influences from the employees perspective:

1. Problems with supervisors and leadership
This is a universal driver, which usually does not get that much attention because people are usually not that honest about their personal feelings. Interpersonal problems are easily compounded in intercultural (foreigner/local, returnee/local) settings.

2. Work-Life Imbalance
This issue is rapidly gaining importance, especially with younger employees – the  generation born in the 90’s or 90后 (jiu-ling-hou) as they are called in China. Members of this generation tend to be more self-conscious and have higher expectations about life than their parents generation.

3. Mounting expectations of one-child policy offspring to succeed
Single children have to deal not only with the expectations of their parents, but also their 4 grandparents and further. Often even the extended family contributes financially to the education and upbringing, creating a pyramid of expectations in turn.

4. Overestimation of own role/capabilities
Being used to be the centre of attention, many single children lack a realistic view of their capabilities.

5. Fast-track promotion and salary jumps available through job-hopping
Promotion and salary jumps of more than 20% (for middle management positions) provide a strong incentive to switch in an overheated HR market.

6. Pay inequality in the labour market (up to 300 percent difference in the same job category)
Differences in pay for the same job within the same industry, as well as across industries are 3-4 times more pronounced than in developed countries. This is because of huge gaps in the underlying productivity, as well as market standing of private Chinese companies, FIE’s and state monopolies.

7. Financial pressure for young families (housing, cost of education)
Married couples are expected to move into their own apartment, which puts especially young men looking for spouses under heavy pressure to buy property in order to receive approval by the spouse’s family.  As the cost of education soars, young families also start saving for schooling and university tuition at a reputable university or abroad.

8. Short-term focus and materialism
As young Chinese constantly engage in social benchmarking with their friends and student peers, short-term material gains sometimes count for more than long-term perspectives.

9. Group orientation (leaving together with other team members)
Often entire teams leave a company together with a manager out of stronger linkage to the person than to the company. In some industries this is becoming more customary as in hospitality, where Chefs are expected to bring along their own crew.

10. Increasing attractiveness of state-sector companies and institutions
A few years back, there was a distinctive group of individuals targeted by FIE’s and a different, more “local” group by private and state-owned enterprises. This distinction is gone, now all companies vie for the same pool of graduates and experienced staff.

Have you identified the same drivers?

…Coming soon, “Drivers of the Talent War. Employer’s Reasons

Foreign Companies: Sexy No More

Last week I attended an event hosted by Servcorp Shanghai where Christian Groeger and Valourie Xuan, from Fiducia Management Consultants, delivered a presentation entitled “Winning the Talent War (in China) in 2011”. I will be writing a few posts based on insights from that presentation.

One of the first watch-out points was that foreign companies are no longer the preferred employer for Chinese graduates. It may not be breaking news but the fact is that foreign companies seem to be losing the talent war. The reality on the ground is that state-owned enterprises (SOEs) and private Chinese companies are successfully pitching for that limited resource. I have already mentioned this in a previous post entitled “Top Challenge for Foreign Companies in China: Human Resources Constraints” quoting key findings from this year’s AmCham Shanghai China Business Report.

Mr Groeger shared the results of a survey published in 2010 by Universum. In this report (32.561 participants divided by field of study) graduates expressed their employer preferences. The top results for business graduates were as follows
1. Bank of China
2. China Mobile
3. Procter & Gamble
4. CICC
5. ICBC
6. HSBC
7. China Development Bank
8. Citi
9. China Merchants Bank
10. SGCC

Do you see a lot of foreign companies in the list? (you can read the Top 100 ranking for 2010 here).
Some other surveys paint an even grimmer picture. An article from China Business Review mentions the results of a survey conducted by ChinaHR.com (a poll of 200.000 students across 700 universities). The list of top 50 preferred employers included only four foreign companies, down from 21 the previous year. That sounds like a big switch in preferences in just one year.

Do you also feel it is getting tougher?

Human Resources in China: Structure your Needs and Plan for Growth

I’ve just read a very good post at All Roads Lead to China. The article is entitled “Managing a good team in China requires process. Not luck”, and I fully subscribe it. I think Richard Brubaker’s recommendations are universal and apply not just to China but everywhere else in the world.

 As an overall strategy, he tries to answer the following questions:
1. Where are the critical gaps in the organization
2. What skills & talents are required
3. What is the Job Description – and articulate the need in a way that will attract right people
4. How will I ensure I retain them

 From a practical perspective he takes you through some steps to help you build a good hiring strategy (some of them also to help retain your current staff). These steps cover your “homework” before you get out there and start looking for new employees:
1. Have and org chart. Know what people are doing or supposed to be doing
2. Write clear Job Descriptions for all positions. It will help hires and managers equally
3. Ensure your organizational structure allows for professional growth (if not your staff will soon grow demotivated )
4. Share your org charts with your current employees to input their views and insights in your decisions
5. Plan for unexpected growth/ Have a growth strategy in place. Where are the bottle necks?

I would probably add the following comments (insights coming from my interview to German Torrado, who has set up & managed HHRR award winning companies. You can read the complete article here):
6. Invest on the tools that will allow you to identify the right candidates (Do not base your recruitment decision on intuition! There are good tests that will help you make a more rational decision)
7. Define personality profiles required for every position.

I recommend you to read the full article from All Roads Lead to China here

 What do you think?