Fresh out of business school in the U.S., Belinda Chen had her pick of jobs — including a plum offer from Amazon. But she headed east instead to join online retailer JD.com in China, drawn by the country’s huge e-commerce boom.
China suffers from a shortage of top talent, despite its enormous pool of university graduates, with 7.3 million more expected in 2014
Western companies aren’t always the employer of choice in China anymore. State-owned enterprises and private companies are bidding for home-grown talent.
The brightest workers in China get promoted quickly. On average, it takes 15 years for someone to move
from intern to CEO in China, compared with 25 years outside China, according to Aon Hewitt.
SHL and Robert Walters group sponsored a networking session this weeking in Beijing. Below is a summary of hot topics and daily challenges faced by HR. I sat with the “technology sector” table and a good number of us are from the telecommunications industry. I will refrain from using mentioning specific company names but, instead draw upon general concepts for key learning.
Branding – Although a foreign MNC (multi-national company) has a strong brand name in its home country this does not necessarily translate being a strong employer brand in China. Candidates do not have a deep understanding of the product line, market reach or business scope of the firm. The public may just have an awareness of one or two key products. Candidates will generally have a perception of the company based on the product brand or how “famous” it is in China. The challenge is to overcoming these perceptions and getting the candidate market to better understand that there is more beneath the surface.
Retention – The stories on the war for talent in China is unabated. Every company, big or small, is facing the same situation. Seemingly, some companies have taken on the approach of whatever the competitor company’s pay, we’ll just pay a little more. Firstly, companies are in dire of finding qualfied talent. Secondly, putting an attractive offer package is difficulty, while the candidate’s current company, will counter offer once learning that a employee is about to resign. Companies cannot hold on to a counter-offer strategy for long. It is too expensive. The challenge is to develop a more proactive method of managing existing talent and keeping them engaged.
Immature Talent – One company at our table is from an internet start-up (although not a small one). The company is propelled into prominence by the charisma of its CEO, so very true of may start-ups. As the organiation grows, they are recruiting professional managers to manage the firm. Unlike other technology sectors, there is a talent base for matured IT talent to draw from. This is not so for the internet sector. They talent they have are much younger. After 1 or 2 years, a young engineer is entrusted to be a team leader or manager, which they do not have the depth and maturity to lead. However, this one company do not have other choice as the talent does not exist in the market. The challenge is to grow a start-up into a mature and sustainable organization.
Generation Challenges – New gradudate hires are a major source of talent for companies in China. The current batch of new grads are of the 80’s generation. The next batch, the 90’s generation, are starting to enter the workforce in mass. Our leaders are from the 50-60’s generation and managers are from the 70’s generation. The life experiences and work expectations requires a unique approach to managing a diverse workforce.
International MNC vs. China MNC – The Chinese government is leading efforts to grow its economy towards a consumption oriented society. To accomplish this, the government is developing its local companies in to national brands and subsequently into internatinal brands. This impacts a wide range of industries from manufacturing, FMCG, retail, real estate, etc. Given the already limited talent pool, the growing competition from local companies are adding to the pressure of finding qualified talent.
While the participants raised these concerns and challenges they face finding a solution is elusive. We are working in the trenches and slugging through get through the day. One consolation to know is that we are all facing similar issues with confronting the war on talent in China.
Earlier this June, over 9 million Chinese students took the gaokao, China’s university entrance exam. This is somewhat similar to the SAT in the United States. However, unlike the SAT and US university system, there is much fewer university selection to choose. By some estimates, this year’s high school graduates are competing for 6.85 million places at Chinese universities, according to Ministry of Education figures reported by China Daily.
For the lucky students, this means an opportunity to rise up in the social-econonic stratus, getting out of the country-side villages and into corporate jobs in China’s biggest cities.
However, getting top scores and graduating from university are not the only criteria for employers in China any longer. With increasing global competitive pressure, companies in China are looking for other criterion to be better position in the global market place.
Survey – Education Background Not the Only Criteria
Regus conducted a survey recently on employer selection criteria of Chinese students. According to the survey:
- Only 9% of mainland companies polled consider educational background their top hiring criterion.
- Companies value most is practical, on-the-ground experience—such as internships—something that nearly 30% of respondents listed as their top priority when evaluating potential employees.
- Personality and foreign-language skills were each cited by 21% of mainland employers as their key hiring criterion
Internship and Work Experience Important
The Regus study surveyed over 330 business executives concentrated in major Chinese cities in information technology, consulting and manufacturing industries. The emphasis on internship experience, not educational background, was even more pronounced among IT industry employers.
While 70% of the companies surveyed indicated they plan on hiring new grads, given the nearly 7 million jobseekers who will graduate this year, competition for jobs is fierce. Salaries can be meager and won’t earn enough to make a living in the big cities they once imagined. These groups of university have been coined the term “Ant Tribe.”
While China-based university students are facing stuff competition for limited employment opportunities. Their compatriots from overseas are returning competing for the same opportunities. Their international exposure, dual language skills and creativity competencies puts them ahead of their counterparts.
For example, in the an article by China Daily, the writer highlights Chelsea Hu, who will graduate with a master’s degree in communication management from the University of Southern California. Hu is anticipating she can secure roles other than entry-level, higher title and more pay.
China maybe at a cross-roads. If the Chinese university system are not producing the sort of students needed for the workplace of the future, companies may need to rethink how it prepares its workforce. Providing internship is a start. Securing top students early in their education life may be a start but, may not be sufficient to change the system – which is necessary for China to stay competitive in the global talent marketplace.
I was glad this week wasn’t a travel week and made it to The Chapman Consulting Group’s Regional Staffing Heads Q3 meet-up. As usual Matt Chapman did a great job of pulling together a group of staffing leads together at Cisco’s Singapore head offices yesterday afternoon.
Here are some of the general themes from the discussion:
APAC Focused Growth
This isn’t anything new. APAC is becoming the center of hiring activity – for some companies Asia hiring is more than one-third of global recruitment activities. As firms are looking are reducing overall headcount costs, they are looking to meeting their business demands by hiring in Asia. In addition to operational roles, leadership positions are also transferring from HQ offices to the region. However, rather than transferring expats with expensive relo packages, companies are intent on finding local leadership talent.
The challenge is how companies execute their new business model and deployment strategies to grow their business in the region. Do companies have the right HR development framework in place. You can’t drag & drop a HQ model into APAC countries.
The recruiting teams are certainly feeling the impact of hiring in large volumes in a region that tends to have fewer leadership supply. The regional staffing heads are brainstorming with their teams on innovative solutions and alternative candidate profiles (example, considering stay-at-home moms for research analyst type roles).
Companies have varying approaches to managing internal mobility. A couple of firms mentioned that they have a waiting period of between 1-2 weeks before allowing the position for external posting. Philosophically, do companies view employees as a corporate or department resource? This is one determinant of how companies can successfully mobilize personnel resources from low to high return projects.
One banking firm is implementing an internal employee database where their resourcing team can access all employees in the company for vacancies. A sort of internal headhunting. But everyone agrees that grow from within is a strategy worth pursuing. Having executive sponsorship can mean success to internal development programs.
Line managers are always nervous about loosing employees and down-time to finding a replacement. Another bank had an innovative approach to managing internal mobility guidelines: 2+2 and 3+3. Work two years in a job, give two months notice or 3 years and 3 months before petitioning for internal positions. This is something every company should consider deploying. The rules are simple and easy to understand. There is no bureaucracy.
Matt continued the discussion asking how companies have utilized social media for recruitment. Companies are having difficulty realizing a direct return on investments. They either cannot track where their applicants first learned of the vacancy or recruiters are driving by volume and do not have time to use social media. This seemed like a slow start for this group in the room.
While I read HR bloggers and related surveys, mostly from the US, seems that recruiter live and die by social media. They are on social networks using LinkedIn to find candidates, on Tweeter tweeting their latest jobs, or researching candidates on Facebook. This doesn’t seem to be the case in Asia.
This is an area where Asia recruiting teams invest more.
Referrals continue to be preferred channels of recruitment. One software company mentioned that their China program has an over 45% referral rate. That’s very good. And others are evaluating ways to reinvigorate their referral programs, think of new methods to generate interest and beyond the confines of just employees. Not many companies leverage alumni networks for contacts though.
Drilling down into details, one investment banking firm executive ask for data and correlation of referrals by high-performers and who they refer, if those referrals are also high-performers. Seems that A-players will refer other A-players. (Hmmm….I’m going to run some data of my own tomorrow. Let’s see what the data tells us.)
An Observation of Staffing Leads
As we were going around the table with the customary self-introductions I had found an interesting observation. Of the group, only 3 were native Singaporeans. The rest of us were “foreigners” who have taken on international roles, moved around and ended up in Singapore. But this does leave me thinking of where are the local Singaporean staffing leaders?
This attendance is definitely skewed:
- It is an invitation list by the Chapman Group
- This group found it valuable to take time off from work to meet
- Maybe some of them were at the Singapore Human Capital Summit Conference. Twitter Feeds: #shcs11
Until the next The Chapman Consulting Group’s Q4 Meet-up.