China HR Continues its Onward Trajectory

The Chapman Consulting Group co-hosted three separate gatherings for China HR Leaders last week in Shanghai. The sessions at RSA, Bank of America Merrill Lynch and Nielsen, were in total attended by more than 60 HR and OD Heads. The Chapman Consulting Group also participated in Organisation Solutions’ China HR Roundtable on 25 March 2011 at the offices of SAP and joined more than 15 of China’s most high profile HR Leaders for a morning of discussion on ‘the Generation Gap’, which contrasted the implications for HR of the different generations of X, Y and Z.

Below are some of the observations on the latest in the China HR market:

1. China is increasingly being ‘broken off’ from Asia Pacific, as either a separate country or a separate sub-region, and reporting directly into global. This is having implications for the calibre of Chinese HR Leader needed to run the HR function.
2. HR talent in China, while being drawn to the buzzing centres of Shanghai and Beijing, is also being attracted into second and third tier locations in China, on the basis of better quality of life and more ‘emerging’ opportunities. Many companies are providing relocation support to their employees to move or attract them into these developing locations within China.
3. Despite the growing number of expatriate packages appearing in the China market, companies are pushing foreign employees and international local employees to be on local packages with all their benefits rolled into base salaries.
4. HR Leaders commented that China is continuing to be surprisingly pro-foreign talent, particularly Asian talent who speak Mandarin. These individuals are filling in the missing skill gaps that don’t always exist in the local market. Plus they also allow high-potential locals to learn up-close from the foreigners.
5. Work/life balance and flexible working is becoming an increasingly important topic in China, especially as Generation X and Y high achievers climb the career curve quickly and then re-evaluate their career strategy mid-career to avoid “more of the same”.
6. Chinese HR talent is being attracted by the big opportunities at home. This is enticing back international Chinese HR talent outside of China, but also means that more high potential individuals are seeing long-term career potential in China rather than having to move outside of the country. This reminds us of what we have seen in Japan in the past and also what we are seeing in India now!

There is no doubt that the centre of gravity of China and ‘Greater China/North Asia decision-making will shift to China, as opposed to sitting still in the regional headquarters of Hong Kong and Singapore. We expect to see more regional HR functions out of Shanghai and Beijing. We also expect to see more companies with China or Greater China or North Asia broken off as a separate region from Asia Pacific.