Attracting Talent in China

This article is co-authored by Alison Eyring, CEO of Organisation Solutions and Matthew Chapman, CEO of The Chapman Consulting Group.

Attracting talent in China has been always been a challenge, but that challenge is becoming more difficult for Western multinationals. In Organisation Solutions’ first study on Executing Growth Strategies in China (2007/2008), most participating companies felt they an advantage as a Western multinational in China. Western multinationals, with their well known brands and ‘international’ thinking, were seen at attractive employers – more so than the big local or global Chinese companies.

This situation has changed significantly. Amongst university students, only one Western company, P&G is still listed in the top 10 employers to work for in China. US and European employers now face greater competition for talent. At the same time, business growth in China has translated into a great deal of hiring – for entry, mid-level and executive-level staff. The demand for high quality talent is outstripping supply and this situation is not expected to change.

Here are a few issues and actions to consider for attracting the talent you need to grow your business in China:

Redefine Your Competition for Talent. Face it. Not all Chinese think a Western multinational is the best place to work, and Chinese companies are increasingly viewed as attractive places to be for a job or career. Previously, Western multinationals offered a workforce with an international perspective, career mobility beyond China, the ability to cover territories beyond China (from China) and the opportunity to work for a great brand. But today, a growing number of Chinese companies offer the same. Due to this and the growth of Western multinationals in China, your competition for talent is better, bigger and more diverse. Take stock of where employees who leave your company go. This will help you better define your competition for talent.

Get Better at Offering what is Important to Employees. Researchers have long examined what attracts prospective employees to a job or company. Nowadays, companies have become quite sophisticated. We have a new vocabulary with terms of “employee value proposition” and “employer branding.” But the basics still hold true: people want opportunities to grow and develop in their career, they want to work for a boss with whom they are comfortable, and they want good pay. In China this also is true. Don’t rely on your global employer branding strategies to attract top talent in China – study what is most important to those you wish to attract in China and find ways to offer this. For example, housing assistance is usually expected in top tier cities if moving an employee from a lower cost city and education allowances are very attractive. Listen to the market and don’t just think of what works in your home market

View China as a Region. Outsiders to China often view it as one homogenous market. Those inside China view it as a region that is highly complex and very diverse. Moving from one province to another can be as challenging as moving between countries. Whether it the availability of school spots or the differential cost of living, moving from one part of China to another can be like an expatriate assignment. Local employers are often more aware of and sensitive to the needs of relocating families between provinces. Western multinationals who strictly adhere to global relocation policies and don’t take account of this uniqueness within China could find themselves at a disadvantage. Ask yourself if you have struck the right balance between global standards and local flexibility.

Control Matrix Management. While matrix reporting structures are common and can work fine in China, many multinationals put themselves at a disadvantage by creating reporting structures that are too complex. Sometimes they have too many people reporting out of country and this makes it difficult to see the business in its entirety – or create a shared vision for growth. We see a growing number of high potential talent who have become frustrated with matrix reporting lines and the lack of understanding from global headquarter environments of China’s uniqueness. Ask yourself if the way you’ve designed your China business is helping or hindering your ability to attract and retain talent. Consider how your competitors are structuring their teams, particularly your local competitors.

Balance Foreign and Local Talent. Due to greater demands and expectations being placed on multinational businesses in China, many continue to rely on foreign talent in key leadership and technical positions in China. There are pluses and minuses to this. From an attraction point-of-view, multinationals must have a clear workforce strategy. A common, shared work culture must be defined in which locals see that success does not reply on being from the country in where headquarters sit. At the same time, there must be an inclusive language environment. It is tiring to function all day in a second language. Western multinationals must find the right balance or run the risk of alienating top local talent who can do just as well or better career wise AND be more comfortable in a Chinese multinational company.

Hire the Right Leader to Ensure the Right Team. The strength of your China leader will determine the strength of the China leadership team. Multinational companies sending in expatriates from outside of China, whether Asians from other countries in Asia or from outside Asia, must develop local successors to expatriate top level executives. This holds true for other locations in Asia too, but nowhere more than in China. Top calibre China leaders are being tempted away from multinational companies to lead the local or group operations of local China companies. These leaders are proving to very good at attracting people from other multinationals and this causes a snow-ball effect. Take care to retain your top China leader and actively ensure a leadership pipeline is in place for local succession.

About the Authors:

Alison Eyring is the founder and Chief Executive Officer of Organisation Solutions, a global consultancy specialising in organisational design, development and change solutions worldwide. Alison has 25 years of experience in the field of Organisational Development and her areas of expertise lie in large-scale organisation design and change, leadership development, and the design and management of distributed organisations.

Matthew Chapman is the founder and Chief Executive Officer of The Chapman Consulting Group, an executive search boutique dedicated to the HR profession across the Asia Pacific Japan region. The Chapman Group works across geographical borders to source world-class local and international HR talent to build Human Resources leadership teams in Singapore and across 14 other countries, covering all industry sectors.