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Considerations for Foreign Multinationals in Attracting and Retaining Top Chinese Talent

Corporations in China continue to highlight employee retention as one of their greatest challenges. At the same time on the candidate side, Chinese nationals for the most part prefer to work for U.S. or European Multinational Companies (MNCs). However, this trend may change as a greater number of Chinese HR professionals are seeking and taking positions in Chinese companies. Western companies’ hiring advantage is shrinking, requiring them to come up with more creative ways to attract and retain local Chinese talent.

In addition to local companies offering more attractive salaries and titles, national pride continues to draw Chinese candidates to Chinese corporations. Chinese HR professionals are also becoming less attracted to U.S. and European MNCs as they are aware their own economy is one of the fastest growing in the world. Hence, they have the opportunity to grow and advance within China-owned companies. As Chinese cities become more cosmopolitan and international, Chinese HR professionals no longer feel as much of a need to relocate or take positions with Western MNC’s to build their resumes.

We often hear concerns from our Chinese network that most senior executive positions within U.S. and European MNCs are held by foreigners. Subsequently, many of our contacts feel there is a “glass ceiling” making it more favourable to join local organisations. We have asked a selection of our MNC clients to answer the following: “What factors are critical in attracting highly skilled HR professionals to your corporation?” Our clients’ answers vary yet they consistently relate salary, life balance, career progression, family and health as major driving factors to their organisations.

Key Points to Consider :

  • In addition to salary; life balance, career progression, family and health are all of great significance in the retention and attraction of HR professionals in China.
  • We are increasingly seeing a higher percentage of HR executives joining Chinese National and Multinational corporations compared to what we have seen in the past two years.
  • There is a view that Western MNCs hold their key executive HR positions for expatriates and foreigners.
  • The economy and quality of life in China has improved dramatically and there are currently great opportunities for HR professionals to grow their career by remaining local. It is not necessary to seek opportunities abroad.
  • Local national companies have experienced strong growth and are able to offer competitive and often exceptionally attractive compensation packages to local HR employees. These will often include items that are typically offered to expats e.g. housing and education allowances.

European and U.S. Multinational companies will increasingly be faced with the challenge of attracting local China talent, with many high potential HR professionals joining Chinese corporations. For foreign companies to remain competitive in China, it is imperative that they give thought to retention strategies that address the above points.

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