China recruitment challenges chinese executive search headhunter head hunter manufacturing


Published on

Recruitment in China Chinese Shanghai head hunter headhunter executive search recruiter in china manufacturing start-up in china china talent leadership recruitment automotive industry recruitment recruiter

Published in: Business
1 Like
  • Be the first to comment

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

China recruitment challenges chinese executive search headhunter head hunter manufacturing

  1. 1. Presented By: Chris BaillargeonTier One Executive Search
  2. 2.  Senior Consultant at Tier One ExecutiveSearch Specialize in placing manufacturingprofessionals in APAC (80% China) Mid Management to C-Level Sales, Finance, Engineering, Operations, Quality, Purchasing
  3. 3.  Due to their competitive nature, young talent inChina are more open to career opportunities thatwill put them in a visible position. They are often very receptive to recruiters, andwill not hesitate to leave their employers for abetter opportunity. This makes finding the “right candidate” with abalance between strong experience and potentialgrowth with your company, even more of anecessity.
  4. 4.  Identifying Candidates Attracting Candidates Contract Negotiation/Structure Legal Issues Retaining Talent Expatriates
  5. 5. Sourcing Use established network of contacts to identify talent. On campus recruitment for entry level positions. Avoid using job boards or advertising, as this produces “bottomlevel” talent. Source candidates who are passively looking opposed to thosewho are actively looking for new employment. Consider outsourcing recruitment function if you do not havethe resources or experience to smoothly manage the process. Make sure HR and the hiring authority are coordinated.
  6. 6. Resume Scanning Candidate resumes are often not professionally formatted. Language barrier causes frequent spelling mistakes. Work experience may be listed in reverse chronological order. Focus more on the content of the resume rather than theaesthetic. Line items commonly found on Chinese resumes:• Picture• Age• Marital Status• Salary (Sometimes)
  7. 7. Frequency of Career Change High growth in China has led to more need for senior leveltalent, with global experience. Candidates are aware that the China job market is still acandidate driven market. Often will be interviewing for multiple positions at onetime, even if they have just accepted an offer. Employees are less loyal to their employers and are more willingto make a change for a higher salary or better title. Identify why it is that a candidate is considering a career change.
  8. 8. Qualify for Cultural Fit Does the candidate have experience working in a MNC? Has the candidate had previous experience reporting to aninternational? Face to face meetings give more accurate impressions ofcandidates, especially if they have poor English skills. If required, make sure English skills are properly evaluated byconducting some of the interviews in English. Who does the position report to? What is their; age? sex?nationality?
  9. 9. Location Cities in China are classified by tiers. Cities are evaluated on average income, education, population,sophistication, etc. Candidates will often not relocate from a higher tier to a lowertier city. Employers in lower tier cities often have longer searchprocesses, and a smaller candidate pool. Some employers in less attractive locations will pay foremployees living quarters and frequent trips home.
  10. 10. What is your Legal Entity? Are you a Wholly Owned Foreign Entity? Joint Venture? Do you have a majority share in the JV? Candidates like to work for the decision maker in thepartnership. If candidates are employed by a minority shareholder theybecome frustrated that they are not being heard. If there is candidate resistance reporting exclusively to the JV,matrix reporting structures can be beneficial.
  11. 11. Understanding Candidate Needs It is rare that a candidate will make a lateral move, unless thereare other variables involved, i.e. job security, family issues, etc. Job seekers will often look for a functional increase inresponsibility to expand their skill sets. Highlight the companies’ growth potential, and the candidatesrole in that. Be flexible with titles of positions. Candidates in China place ahigher value on title than in North America.
  12. 12. Conducting the Interview Process Be mindful of time zone differences when scheduling interviews. Timing is crucial. If the process takes too long candidates maybecome “turned off” the position, or accept another offer. On first contact, focus on attracting the candidate to yourcompany. Make sure the candidate is aware of the reporting structure, andthat they have built a rapport with upper management. Manage expectations throughout the recruitment process, andmake sure the candidate understands what their duties will befrom day one.
  13. 13. Things to Consider… Fluctuating exchange rates will change the real cost of employeesalaries, budget accordingly. Four Mandatory Benefits in China:• Pension• Unemployment Insurance• Medical Insurance• Occupational Injury Insurance Candidate salary expectations are typically 20-30% increasewhen changing positions. Contracts are structured differently.
  14. 14. How will the Contract Look Different? Due to high tax rates, contracts in China are often broken intomultiple line items:• Base Salary• Bonus• Car/Driver• Home Allowance• Other Salaries are calculated on a monthly basis, with 13 monthssalary being mandatory. Bonus can be calculated on a percentage of salary, but is oftencalculated by month (ex. Variable Bonus: 0-3 months’ salary)
  15. 15. DESCRIPTION REMARKSAnnual income Package(Before Tax)Basic Salary: RMB 70,000 /month.Bonus Based on the individualperformance and determined byEmployer MBO system3-Year Special Bonus(Before Tax)Base on the achievement to the3-year Business goals andobjectives which will beconfirmed between employee andSupervisorYearly Home Leave 15 Days/YearCommuting Car: Provide commuting carHome allowance TBDInsurance National RegulationPhone / Travel expenses Normal and reasonable expenseswill be reimbursed by companyProbationary Period 6 Months
  16. 16. Negotiation Candidates will not always be honest about salary expectationsto potential employers. They are afraid they will appear selfish to their colleagues andcarry a negative reputation. To counteract this, it is often beneficial to have a third partyassist with contract negotiations. Be flexible with job titles, as candidates will base a large portionof their decision on how prestigious they feel the position is. Standard resignation notice period is one month (often longer),schedule start date’s accordingly.
  17. 17. Representative Office (RO) Often, companies looking to invest in China will set up a RO toevaluate market conditions. Not an independent legal entity. RO’s cannot generate business, sign contracts, invoice, etc. Companies with just an RO cannot hire employees in China. It is illegal for a Chinese national to work as a consultant for aforeign entity. How can RO’s staff employees?
  18. 18. Foreign Enterprise Service Corporation (FESCO) Created for hiring Chinese employees on behalf of foreigncompanies. The employee is employed by FESCO. Foreign entity carries all liability on the employment contract. Minimum 2 year contract to qualify. A “premium” is added to candidate salaries for services renderedby FESCO. (Usually RMB 250-350/staff/month)
  19. 19. Wholly Owned Foreign Entity (WOFE) Independent legal entity. Can manufacture, consult, trade, invoice, etc. Can hire employees directly without having to use anemployment agency, ie FESCO. Set up period, normally 3-5 months. Minimum investment requirement for WOFE.
  20. 20. Things to Consider… In order to travel outside of China, citizens must obtain a visaevery time they wish to do so. Consider hiring someone who is based in a neighbouringcountry if the position requires a lot of travel outside China. Be aware that bribery for new business, and other corruption isnot at all uncommon. Discrimination based on age, gender, or race is verypresent, and can even be found on job postings.
  21. 21. Why is Turnover so High in China? Candidate driven marketplace. GDP has averaged 9% growth over the last 20 years. In the mid 2000’s it was not uncommon for a candidate tochange employers and double their salaries. Employees are loyal to their team members, not their employers,and this often causes turnover to be compounded within teams. Changing of leadership causes anxiety.
  22. 22. Proactively Manage Expectations During the interview process make sure the candidatesexpectation is aligned with the duties of the position. If there are any ownership/leadership changes happeningshortly after the candidate is expected to start, make sure thecandidate is aware of and understands this. Consult with employees before making major decisions, at thevery least you will have a clearer idea of the employeesintentions. Make sure senior management understands that they have tokeep employees engaged and involved.
  23. 23. Incentives How is the employee going to grow?• Function• Scope Is there an opportunity for international experience? How visible are they in the company? Make sure the employee understands the organization chart,his/her role and opportunity to gain a more prestigious title. Salary incentives:• Annual wage increases• Stock options• Advanced schooling subsidies
  24. 24. Common Traits Expatriates are compensated at a premium, compared to theirwestern counterparts. Often expatriates are on temporary contracts (3-5 years) , andmay not even sell their homes. Usually they are in the latter half of their career, taking on seniorleadership roles or start-ups. Children are usually out of the house, and do not relocate withtheir parents. Expatriating someone is distinctly more expensive than hiring alocal.
  25. 25. Why Expatriate? There may be a lack of talent in the host country. New or “Green Field” operations often require someone from theparent company to oversee the start up process. Western presence to communicate back to parent organization. Internal promotion, help employees gain a global perspective. Combat corruption, maintain company reputation.
  26. 26. Preparation Culture shock and language barriers can be difficult toovercome. Employers should consider having the employee visit the countryfor a period of time before a decision to move is made. Language and culture training should be provided to allemployees before their contract begins. Women should be aware that they may be treated differentlydepending on the culture. It is important to prepare the entire family, not just theemployee, for the transition.
  27. 27. Differences in Compensation Relocation Costs: The company will pay for the employeeshousing, and movement/storage of goods. Housing: Many companies assist the employee in selling theirhome. This is often backed by a Guaranteed Purchase Option. Vacation/Flights: Family members may be given free flights, inaddition to the employee receiving a set number of trips home. English School: Employees that do wish to relocate their childrenwill likely require that schooling is paid for. (USD $20,000/year) Tax Equalization: U.S. citizens are required to pay income tax inhost country and in home country.
  28. 28.  The China job market is very competitive, whichcauses high employee turnover. Identifying the right candidate becomes evenmore important; someone you can build businessaround. Attracting the right candidate requires HR andhiring authorities to operate together. Transparency is important for both recruiting andretention purposes.
  29. 29.  Be aware that employment contracts in Chinamay be structured differently than in westerncountries. Can I hire employees directly? Keep employees interested with incentives andgrowth opportunities. When is it a good idea to use an expatriate? It is difficult to capitalize on a growing market ifyou cannot retain talent.
  30. 30. Chris Baillargeon: 1-519-258-1844 ext. 101