3 Trends in the Chinese Labour Market

I’ve received a few requests from subscribers to write about recruitment in China. I thought it makes sense to get on board experts on the topic, so I turned for help to a friend who works at the JLJ Group in their Shanghai office. The JLJ Group assists companies entering the China market, and has expertise in different fields, including Recruitment.

I will be posting three articles with the information they have provided covering the following topics:
1. Trends in the Chinese Labour Market
2. Tips on How to Recruit
Managers for SMEs
3. Tips on How to Retain your Chinese Talent

So today, we will kick off the series with 3 trends on what is happening in the Chinese Labour Market.

Trends in the Chinese Labour Market

1. High Rate of Turnover.
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. This makes it increasingly common for Chinese employees to switch jobs every few years.

2. Increasingly Competitive Salaries.
In 1st tier cities such as Shanghai, Beijing, and Guangzhou, salaries are approaching levels found in more developed countries. The phenomenal economic growth of China has led to a rapid rise in salaries, particularly for managerial and higher positions.

3. Increased Prevalence of Younger Upper Management
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 the old, especially in terms of English competency levels. This situation has thrown off the conventional thinking that senior candidates are always more capable than their younger counterparts. In fact, many directors of corporations in China are only in their early thirties. As a result, 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.

Is this your experience? Have you identified other trends?

Retaining your Chinese Employee

When I wrote a post entitled “5 Recruitment Tips for Entrepreneurs in China” one of my readers left the following comment:

“Definitely rotation is a handicap in China’s labor market. We invest time and money on training teams and when they begin to be productive they move to your competitor. Any tip on how to achieve loyalty… besides salary increase?”

I have still not got around writing a post about it, but today I came across a post by Joel Backaler at The China Observer entitled “3 Tips to Keep your Top Chinese Talent” that I feel shares very valuable insights on the topic. This is a sum up of his three tips (but I recommend you read the full article from his blog):

  1. Be Flexible about Employees Titles- some companies have standarized internal titles and pay grades, but are not concerned about their employees writing something that sound better to them in their business cards (I assume as long as it is not misleading)
  2. Think long term when it comes to incentives- some companies have come up with incentive schemes that link some “treasured” item (like a company contribution to a car purchase & a free loan) to permanence in the company for a number of years.
  3. Shatter the Glass Ceiling- as soon as your Chinese employee perceives an obstacle in her ascending career she will move to another firm, so make sure you have a career plan for your best people.

Would you like to share some other tips?

Human Resources in China: “Accept what you’ve got and model them into what you expect them to be”

I hear a lot of people complaining about things that seem to be quite common in Chinese employees.

1. Not saying the truth / Or failing to deliver what they feel are bad news
This sentence sounds quite familiar to me by now: “Lying is not an issue. It is accepted and they do not even think they are doing something wrong”.
Or the “Truth Vs Courtesy” dilemma, a different dimension to the same problem that I read about in the book  “Business Leadership in China” by Frank T. Gallo. It describes how employees often do not want to deliver bad news that may “hurt you”, “make you unhappy” or “make you lose face”.

2. Looking for a scapegoat
It seems a lot of managers believe that when a mistake is made, you need to find who is responsible and give an “exemplary punishment””.

Those are obviously behavioral patterns that you would not like in your organization…So the tip of the day could be something like:
“Accept what you’ve got and model them into what you expect them to be”

Or at least that is what entrepreneur German Torrado tries to do when he takes his new employees through their “in-job training”.

1.When it comes to saying the truth he tells me:
“Here you must acknowledge that an employee may not tell you the truth but still be loyal. Having said that, you really need to work on that, an eradicate that behavior because they may fail to tell you the truth on something unimportant today, but it may be something critical tomorrow”

“Once you identify an issue that has been hidden from you, you need to keep your cool and then deliver the message: “a director needs to be informed in order to be able to solve the issues that come up, and my expectation is that you will inform me to help me solve them””

2. And his tip for “scapegoat” syndrome:
“As part of my new managers induction, I always make a special effort to share my views/experience on how to work as a team and how to lead teams. I know middle management has been told that, when something goes wrong you need to look for the person responsible and give an exemplary punishment. That is not how I want my managers to work, so I put a lot of effort on showing them how to deal with that type of work situation.”

Do you have any insights out there to share?

5 Recruitment Tips for Entrepreneurs in China

Last week I interviewed entrepreneur German Torrado from Orienta 7. German has always believed human resources management is key to business success. Arrakis, the internet service provider he founded in Spain in 1995 (later sold to British Telecom) won twice Human Resources Awards.
German has lived in China for the last four years and he feels human resources management is something entrepreneurs here should consider seriously. One of the topics we talked about was “recruitment”, and I’ve tried to translate his thoughts into some tips that will help other entrepreneurs in China.

1.Do not base your recruitment decisions on intuition
“If you are an exceptionally gifted person and you know how to read non verbal communication intuition may work for you… but that is not the case most of the times” German asserts.
And just to build on German’s statement I will quote from About.com: Human Resources: “One study at UCLA indicated that up to 93 percent of communication effectiveness is determined by nonverbal cues. And if you take into consideration that multicultural differences in body language, facial expression, use of space, and especially, gestures, are enormous and enormously open to misinterpretation”
… So you may be heading for disaster if you just follow your intuition.

2. Working experience is only a small part of the recruitment decision. You want to find people who know how to handle new situations, not just react with learnt recipes.

“I have a limited interest in people past experience. Although experience and technical knowledge is important, I want people who will know how to react to the unknown. Besides, answering where they worked and why they left their previous jobs is the speech they all have practiced at home”

3. Invest on the tools that will allow you to identify the right candidates

“I’m always surprised that after investing a lot of money in their businesses entrepreneurs do not invest in the tools that will allow them to identify the right people”

“I want people to whom I can tell “this is the objective, these are the resources”. In order to identify who is out there that can have this type of initiative I take candidates through three types of test: a personality test (based on the Enneagram), a creativity test and a technical test related to the position to be filled. That allows me to do group interviews (which speeds greatly the search process) and identify the people with the right profile”

4. Define what personality profile is required for each position.
“For each position in my organization, we have defined what personality type is required. For example, I would like the assistant director to be very loyal, somebody who pays attention to detail and not too emotional. On the other hand, I would expect the sales person to be more extrovert …Thanks to the personality test we are able to identify whom those people are.”

5. Explain upfront what the company vision is and what it can offer them…you want them to know where they are getting into and ensure it also fits their expectation.

“At the beginning of our interviews I tell the candidates all about the company. I explain what the job description is, how far they can take it (freedoms), how we work as a team and what my management style is. If the person does not have too much working experience I also explain the differences between MNC and SME carrier paths”

Rotations are high in this market, so you may want to try to minimize it by clearly presenting your proposition.

So, is your experience out there different? What would your tips be?