Back

The 7 New China Realities for HR Leaders

Hosted by: adidas CIGNA Mondelez International Volvo

The Chapman Consulting Group has just concluded its HR Leader networking sessions in the cities of Beijing and Shanghai. Hosted at the China headquarters of Adidas, CIGNA, Mondelez and Volvo, more than 100 HR leaders took part in the four sessions also attended by Matthew Chapman, CEO and Tim Spriggs, Director at The Chapman Consulting Group. If you’ve got an HR team with responsibility for China, you should be thinking about the following seven priorities.

1. Salary inflation

Salaries for business and HR positions in China continue to rise at 10-20% on average per annum. Employees who move externally on a frequent basis, are driving up these figures, as new employers typically give increases of 30-40% on average. China salaries, in a global context, have caught up to and even exceeded some major world markets. Foreign talent on expatriate packages being seconded into China, are now amongst the most costly employees in the world.

2. Rising health costs

Having a selection of robust health care plans is now a prime area of focus for many HR leaders in China. Foreign employees on ‘local plus’ packages or full expatriate packages expect world-class health coverage. This is driving up the expectations of locals as well, who are increasingly demanding high quality care. According to Coco Chen, HR Head at CIGNA, China, “Having a transparent, tiered health plan, for different levels or classes of employees, is proving to be an important attraction and retention tool.”

3. Retaining talent

Employee turnover in China is now one of the biggest costs to businesses. Ensuring that your talent retention strategies, particularly for high achieving employees, are as strong as possible is more important than ever. More companies are investing in talent specialists, who work alongside the business and HR leaders. According to Daniel Bass, Talent Head for Siemens in China, “In the last decade there has been an explosion in ‘company universities’ where individuals and teams can be upskilled in-house.”

4. Attracting talent

State owned companies are winning the talent war against multinational organisations, particularly for those employees who are ‘benefits’ focused. “Local companies are setting the standard and multinational companies are having to eat their dust,” says Frank Du, Managing Director at China Fortune Land Development. This is particularly evident now at junior levels, straight from university, and at the age when staff are getting married and/or having children. From a benefits perspective, employees of state owned enterprises are more likely to receive higher quality education, housing assistance and health benefits, as well as leave entitlements. Multinationals must pay particular attention to their benefits plans and the need to benchmark with local companies, as opposed to benchmarking against other countries where the multinational operates.

5. Irrelevance to China of global business or HR trends

Much as we’ve seen in Japan over the past few decades, China talent is increasingly insular, focusing on trends “on home soil” as opposed to what is happening around the world. Multinationals that attempt to sell a career proposition based on international career paths or exposure outside China need to be very careful that this is pitched to those who actually see it as an advantage. “You need to be giving the right pitch to the right target market — no longer can you adopt a ‘one size fits all’ approach and expect people to simply join your company,” said Tim Spriggs, Director at The Chapman Consulting Group.

6. Great HR leaders being poached by the business

In terms of quality, the HR profession in China has progressed by leaps and bounds over the last five years. This is partly due to the Chinese HR Leaders’ hunger to learn and benefit from world best practices, both from foreign HR leaders who have been stationed in China, as well as from assignments outside of the country. According to Jing Wang, HR Head of Shell, “HR Leaders need to think like business leaders — there should be no difference between the two”.

Chinese HR University and post-graduate courses are now booming, thanks to the growing profile of the HR profession, but business leaders are “preying” on gifted HR leaders by moving them out of HR and into business roles. From a talent retention standpoint, this is positive in that it often holds on to an accomplished employee. However, this loss of talent from the profession is hurting the already limited supply of elite HR practitioners.

7. Visas for foreign interns becoming difficult

Mulitnationals and Chinese companies remain very open to foreign HR and business talent. Indeed younger employees who are willing to relocate to China on local terms or on ‘local plus’ packages can often prove to be very cost competitive to locals. However, the Chinese government is now clamping down on visas for foreign interns in favor of hiring locals. Previously, these foreign interns represented an affordable way to bring in bright graduates from around the world to fill in labour market gaps.

The Chinese market represents immense potential for many multinational companies, but the reality of engaging, motivating and retaining a large workforce there remains much more complex than many Global HR leaders expect. The trick seems to be to keep an open mind and learn from those who have gone before. It is also clear that committing maximum resources, in terms of training budgets, as well as broader political support, ensures multinationals the greatest chance of ongoing success in China.

Newsletter

Keep up with the latest HR insights and updates.
Sign up

Recent Posts

Key Contributors:

Matthew Chapman

Founder

Global Management
View more
Global Management

Matthew Chapman

Founder

Matthew (Matt) Chapman is the Founder of ChapmanCG. Matt oversees ChapmanCG’s future strategy, innovation and image across the globe. He also personally provides HR search and career counsel to HR leaders whose careers have grown alongside ChapmanCG — some of whom are now the biggest HR names in the world.

Matt has a Bachelor of Commerce in Accounting and Business Law from the University of New South Wales, Australia. He is a Singapore Citizen and divides his time between Asia Pacific, the Americas and EMEA.

Matt is a wellness, self-improvement and fitness addict. He has completed six desert, 250km ultra-marathons in Chile, China, Egypt, Antarctica, Namibia and Madagascar.

EA Registration Number: R1111550 Licence Number: 08S3543

Latest Articles by Matthew

ChapmanCG News 30 December 2020

What 2020 has meant to ChapmanCG

Matthew Chapman, Founder We always believed HR was “at the centre” but this year has…

ChapmanCGChapmanCG
Read
ChapmanCG News 1 December 2020

Global HR Update Q4 2020

As 2020 draws to a close, the HR community is reflecting on the challenges of…

ChapmanCGChapmanCG
Read
Global HR Updates 29 April 2020

Global HR Update Q2 2020

We are seeing the HR profession going through substantial change as a result of the…

ChapmanCGChapmanCG
Read
ChapmanCG News 4 March 2019

ChapmanCG appoints Stephanie Nash to the new role of Global Chief People Officer

Global HR executive search firm ChapmanCG today announced the appointment of Stephanie Nash to the…

Ben Davies
Read
ChapmanCG News 23 May 2018

What CHROs Look for in Their Asia HR Head

The Asia HR Head possesses a unique set of skills that allows them to meet…

Matthew Chapman
Watch
Talent Development 25 March 2018

The Asia HR Head Competitive Advantage

Asian HR leaders have learned to adapt to environments where there is no ready-made human…

Matthew Chapman
Watch
Culture & Business Transformation 17 April 2017

Managing Change and the Data Frontier

With a backdrop of Tokyo Tower and sprinkled cherry blossoms in a nearby park, Neal…

Matthew Chapman
Read
Culture & Business Transformation 10 March 2017

ChapmanCG HR Leaders Breakfast Series: The Future of HR

DSM’s impressive regional HQ in Singapore was the location of ChapmanCG’s latest HR leaders breakfast…

Mathew BoardmanMathew Boardman
Read
Digital Transformation 9 November 2016

Technology, With a Purpose

Charles Bendotti, Global CHRO at Philip Morris International, David Thomas, APAC HR Head at Manulife…

Tracy Goh
Read
Culture & Business Transformation 28 April 2016

The Evolution of Culture and Engagement in the Workplace

ChapmanCG hosted a lively roundtable in Singapore at Bank of America Merrill Lynch (BAML), which…

Matthew Chapman
Read
Tim Spriggs

Managing Director

Consulting Team
View more
Consulting Team

Tim Spriggs

Managing Director

Tim Spriggs is a Managing Director with ChapmanCG based in the UK. He works with the team to identify high-calibre HR talent across EMEA and internationally.

Tim has worked on behalf of some of the top global multinationals and has a background in global HR search. He works with our teams across Europe, APAC and North America to foster our strong links between our global headquarters and the regions.

Tim spent five years in Singapore where he was instrumental in building the China business and covered international work out of Asia. Prior to ChapmanCG, Tim worked for JD Haspel, a boutique London-based executive search firm, where he specialised in EMEA HR search assignments across multiple sectors including technology, pharmaceuticals, financial services and natural resources.

Before moving into executive search, Tim’s passion for sport led him to his first career in sports marketing and media sponsorship with Octagon. He has a BA (Hons) in American Studies from the University of Nottingham, and a CIM Diploma from the London School of Marketing.

In his spare time, Tim enjoys running and cycling in the Chilterns and is known to have the occasional swim in the Thames near his home in Henley.

Latest Articles by Tim

ChapmanCG News 28 December 2020

A look back at top articles from 2020

The Top 5 Trends in German HR in the 2020s The HR trends shaping work…

ChapmanCGChapmanCG
Read
ChapmanCG News 1 December 2020

Global HR Update Q4 2020

As 2020 draws to a close, the HR community is reflecting on the challenges of…

ChapmanCGChapmanCG
Read
Talent Acquisition 4 September 2020

A Perspective on Global Talent Acquisition Priorities

From the outset of the global pandemic, Talent Acquisition functions in many organisations have been…

Abby WaltersVB_VanessaBlackburnVanessa Blackburn
Read
Future of Work 17 March 2020

Developing Fit for Purpose Leaders for the Future

Hosted at the Zurich headquarters of ABB, The Chapman Consulting Group bought together HR global…

Kirsty Jucker
Read
Culture & Business Transformation 31 December 2019

Our Top Human Resource Articles for 2019

As we close out the year, we'd like to bring you the top ten most…

ChapmanCGChapmanCG
Read
Talent Acquisition 3 December 2019

How is Talent Acquisition Evolving for the Future Workforce?

ChapmanCG’s UK team was joined by a group of Global and Regional Talent Acquisition Leaders…

Abby Walters
Read
HR Trends 25 November 2019

ChapmanCG Top HR Podcasts for 2019

The ChapmanCG Global HR Interview is the online destination for the most engaging conversations with…

ChapmanCGChapmanCG
Listen
Future of Work 29 May 2019

Destination Agile: HR’s Role in the Journey

A group of HR leaders took part in this session with a topic of ‘Destination Agile:…

Kirsty Jucker
Read
Future of Work 19 January 2019

Re-imagining Performance Management

As companies continue to grapple with finding an effective performance management solution, HR leaders are…

Kirsty Jucker
Read
ChapmanCG News 10 January 2019

Top HR Podcasts of 2018

Since our launch of the ChapmanCG Global HR Interview podcast series in 2015, we have…

ChapmanCGChapmanCG
Listen