A Guide to Attracting Local Talent in China

Your company has just migrated to China. The emerging market presents a wealth of opportunities not to be missed, and you want to embrace this opportunity with open arms. Your number one priority is to propel your company forward in the Chinese market, but without the right talent, your venture is over before it has even begun…

Before you begin your recruitment drive, there are some things you need to know. In this guide, I will first alert you to some of the challenges your enterprise might face, and will then provide you with advice on how to successfully market your company to prospective employees. Finally, we suggest an alternative route to navigating talent acquisition in China, which may prove crucial in the not-so-distant future.

1. What’s the Situation?

Your first major challenge is the economic and demographic backdrop: within just two decades of rapid economic growth, China has transformed from a planned economy to a market economy. Simultaneously, the One Child Policy has resulted in a largely ageing Chinese population, and a comparatively small working age population. Combined with an emerging market economy, these demographics have resulted in significant talent shortages.

Your second major challenge is the competition: your prospective employees are China’s Gen Y – the 80s and 90s kids, freshly graduated and eager to enter the world of earning and further learning. However, the reputation of Western companies took a major hit during the economic crisis, whilst Asian companies continued to go from strength to strength. There is a now a booming scene of increasingly successful domestic firms in China, resulting in countless companies, both domestic and multinational, vying for the limited talent available.

2. Attracting Talent

You swiftly realize that your company is by no means alone in its quest to recruit Gen Y’s finest talent. The talent shortage is palpable, and you need to be a strong competitor. In order to successfully attract talent in China, it is imperative that you establish a strong branding strategy that will make your company stand out as a top employer…

In a recent survey conducted by Universum, Chinese university students identified the top five attributes they look for in ideal employers:

1) Good reference for future career

2) Competitive base salary

3) High future earnings

4) Clear path for advancement

5) Professional training and development

With these in mind, our team has put together the following comprehensive pointers so that you can make sure that, as an employer, you are as enticing as possible.

Keeping up the Competition

According to the survey, Gen Y are looking not only for financial benefits, but also good future prospects. The challenge here is that many domestic companies are able to offer new employees better prospects than a lot of Western companies, with fast-track promotion schemes and excellent training packages. This means that to remain competitive, you need to be lucrative:

Exciting Training Opportunities + Additional Qualifications = Better Chances For Career Advancement

This means you need to show prospective employees that a position with you is not a dead end, but rather a master key to a multitude of different doorways: demonstrate in your employer branding that opportunities for new employees are tangible and credible. So, when you are planning your recruitment strategy, consider the following question: What opportunities will this role provide for my employees to progress? Make sure to convey the answer clearly.

A Job with Meaning

Chinese people are increasingly looking for meaning in their employment: a position with purpose, with challenges, with scope for creativity, with recognition of achievements… not just ‘a job’, but an enriching step on a promising and respectful career path. Successful recruiting strategies should demonstrate that employees will follow a clear path of progression, both personally and professionally. In response to this, employers are now taking a more personalized approach to employee development, by offering career-building support and individual development plans. Make sure to include such details in your recruitment strategy, so prospective employees know that with you, they will be far more than just another digit in a database.

Innovate

This may seem obvious, but many companies rush in and recruit without prior research, only to find that good talent is being lost quickly to pioneering Chinese companies with smart recruitment strategies. Do not make the fatal error of underestimation: in China, you are up against some of the most innovative strategists in the world. Think outside the box with your recruitment strategy, and do not just keep up with current trends – stay three steps ahead. These ideas will help you do exactly that:

Catch them early by forming links with schools, colleges and universities so that your company becomes a recognizable name: initiate taster sessions to give students insights into your company culture, impart business knowledge through seminars and publications to show that you are a reputable and knowledgeable company and run competitions on campus. This way, once they enter the job market, they will remember you, and look upon you favorably.

Stay prominent by utilizing plenty of social media platforms. Make yourself known in the spaces that young people most frequent: cyberspaces. Realistically, large advertisements in the street are pointless when your prospective employees spend more time with their heads buried in their smartphones. Popular platforms include Weibo and WeChat, and blog sites are also used extensively by students to follow research threads, current affairs and personal interests. Make the most of these resources. For this in particular, it is really important to ensure your employer branding strategy complements your target audience.

Often, students in the West are sent to networking events to meet potential employers. Networking is also big in Chinese culture, but goes by a slightly different name: Guanxi is a more respectful, dignified and accepted form of nepotism, where trust between parties is built gradually through mutually beneficial relationships. Through Guanxi, new doors may be opened, new opportunities discovered, and important new contacts may be made. Take the time to nurture relationships through informal interactions and sustained mutual favors, because if you are struggling to find the right talent, you never know who might be able to lend a hand.

Remember, localized knowledge is key, and only with adequate innovation and creativity will you stand a chance at competing against Chinese State Owned Enterprises (SOEs) and Privately Owned Enterprises (POEs).

Cultural Sensitivity

It is all too easy to enter China and assume an imported Western work culture will be successful. Remember where you are. Unless you at least make an effort to cater to your employees’ customs, talent recruitment is going to feel more like fishing in the desert. Chinese companies often play the National Pride card when recruiting, and the idea of ‘keeping it Chinese’ has become a popular rhetoric among young jobseekers. Particularly in recent years, national loyalty has been playing an increasingly large role in determining which employers are most attractive, and research from Universum shows that currently seven of the top ten business employers are domestic Chinese companies.

One gesture that goes a long way is to make a point of celebrating when there is a Chinese holiday. Regular celebrations and festivities really help to build a strong sense of camaraderie between team members, so try to turn your employees into a small and supportive community. Whilst these things may not seem important when in the initial stages of recruitment, do not forget the power of ‘Chinese Whispers’. Word spreads fast, so if your Chinese employees feel valued, then your company will swiftly develop a better reputation amongst prospective employees.

Another thing to bear in mind is the balance between Chinese employees and any foreign employees. Far too often, foreign employees are portrayed as holding a more privileged position in company hierarchies, for no apparent reason other than that they are foreign. The last thing Gen Y want is to reach a glass ceiling as their career progresses. Chinese Whispers will again come into play, but damagingly so. If prospective employees hear of an imbalance between foreign and Chinese colleagues, where foreign employees are more likely to be promoted, or where Chinese colleagues feel discriminated against, any attempts at successful talent attraction will be severely hindered…

Don’t Forget the Basics

Last, but by no means least, do not forget the fundamental basics of attracting new employees. Here is a quick reminder:

Pay: whatever incredible opportunities you are providing, and however good your work culture, people work to earn money, and if the money is not good enough, they will look elsewhere. Be aware, China has reached what is known as the Lewis Turning Point, where due to the climate of labour shortages, you may need to be prepared to pay a higher wage than you expected.

Reputation: If you are a good employer, people will find out, and will approach you. Likewise, if not, people willfind out, and will avoid you.

Hours: The number one career goal identified by students is to have a good work/life balance. Reflect this desire in your working hours. If employees can have a better quality of life elsewhere, then they will even take a pay cut to achieve it.

Get the Timing Right: There are always certain times of year when there are more people on the hunt for jobs. In China, this tends to come right after the Chinese New Year, when large personnel reshuffles occur, often for financial reasons. Be ready for the rush.

Good management: People value the standard of company management, and are now looking for more intimate relationships between employee and employer. Personalization is becoming central to HR. For more information on successful management strategies, see next week’s post on retaining talent.

Location: An alluring location often plays a large part in influencing people’s career choices, and very often will be the final deciding factor in where someone chooses to work. Chinese people are becoming more sedentary in their career choices, less willing to migrate to large, first tier cities like Beijing and Shanghai when more opportunities are arising in thriving second tier cities. Consider your location wisely: second tier cities are likely to be somewhat less competitive, but are by no means lacking in talent.

Administrative Extras: You need to be at the top of your game when it comes to knowledge about social security, tax, education allowances and housing assistance. If you can show that you are organized and aware of any HR complications, prospective employees will feel far more comfortable considering you as an employer.

3. Producing Talent

Things take a turn for the worse. There simply is not enough talent to go around, and you are really struggling to recruit the right people. You start to wonder whether this was really a good idea after all… However, do not give up hope. An alternative is at hand…

True, this scenario may be a little melodramatic, but a little contingency never caused any harm. What follows is an alternative course of action for acquiring talent in China, so that you can feel prepared in the face of all eventualities (or in case you really do find yourself hitting the panic button).

The main idea behind this is that if you cannot find the talent (or if the talent has better places to be), make the talent. The concept is simple: DIY talent cultivation. Graduate schemes and training programmes have long since taken off in the West, and are now seen as a great first step for graduates entering ‘the real world’. It allows companies to fine-tune enthusiastic young graduates into talented employees. In China, however, the concept is still in its infancy. With some careful planning and consideration, you can use this vacuum to your advantage. Rather than fishing for talent, this alternative allows you to fish for potential, of which there is sure to be plenty.

Whilst it may seem like a last resort measure, the ageing population structure will not be shifting in a hurry and the Chinese market is rapidly growing, so there is a real possibility that the talent shortage may worsen. Graduate schemes hold the potential to become a viable long term solution to the talent shortage, and are worth considering, whether you choose to implement them or not.

4. Conclusion

There are plenty of things you need to consider when recruiting talent in China, but if you simply invest time into molding your employee value proposition, and formulating a strong employer branding strategy, you will be able to successfully target the right talent. This means being competitive, innovative, sensitive and aware of the importance of localization. And, of course, if the pool goes dry, remember that there are always other options.

I hope this guide will have helped you to alleviate some of the issues faced in talent recruitment, but if you would like further advice on HR solutions in China, please do not hesitate to contact me at r.kuppens@maxxelli-consulting.com