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Rapid evolution in China’s job market

Published on Wednesday, 23 May 2012
Rachel Ta

The talent market in China is evolving rapidly and, as a result, the hiring process is becoming more sophisticated and competitive. Historically, the main challenge for many organisations was simply finding good-quality recruits. Now, though, retention is also a growing concern.

In a generally buoyant employment market, “job hopping” has become common and individuals have adopted a more short-term approach to career planning. Professionals in the “post-90s” generation, especially, have become more demanding and savvy when spelling out their expectations. If looking to move, they want roles which offer better career development, broader scope, and increased remuneration. Status and prestige are significant factors too, which has led to salary escalation and title inflation.

If possible, employees in China prefer to work for multinationals rather than local companies. This could change, though, as domestic brands grow and start to gain greater international recognition. Also, across the mainland, there are huge differences between regions. That results in good candidates being highly selective and not very mobile, making it hard to sell the idea of relocation to less popular cities.

Those challenges aside, many  professionals in China now boast a wide spectrum of skills and expertise. The quality and quantity of experienced managers has improved significantly, meaning there is less reliance on expatriates to fill managerial roles.

For companies devising a medium-term recruitment strategy, these aspects all require careful consideration. The three core processes – robust sourcing process, rigorous selection, and good offer management and on-boarding strategies – should remain consistent. But within that framework, it will be clear that local talent in China is now climbing the corporate ladder faster than ever before.

Multinationals and mainland enterprises can now find generalist and specialist skills within China much more easily than a few years ago. The established pattern of bringing in overseas-trained recruits to fill management positions and provide technical expertise is rapidly changing. Of course, there are still many openings for suitably qualified candidates from Europe, the United States and other parts of Asia. But the positions tend increasingly to be in high-level or “unique” functions, requiring experience, an impressive track record, and quite often fluency in Putonghua and English.

This accounts for the major influx of second-generation Chinese repatriating from the around the world to take up new opportunities at “home”. In many cases, they come armed with a Western education, corporate training from a multinational or big financial institution, and the necessary language skills. Along with those trained by domestic companies and business schools, this forms a pool of high-calibre talent equipped to make its mark in the international market.

The localisation trend has been driven in part by cost savings. However, candidates and employers also know that if someone has all the qualifications to do a tough job, there is no reason to expect they will work for below market – or expatriate – rates. Anyone who is bilingual, well-educated, and capable of managing large-scale operations and multiple stakeholders is in demand and aware of his or her value.

Therefore, prospective employers in China must be realistic. They can no longer hope to hire or retain high-quality talent on the cheap. If an appointment is crucial for the success and progress of the organisation, it is important to put together an attractive package, including fringe benefits, which is properly competitive for the position.

These days, good candidates receive multiple offers and are often spoilt for choice. Recognising that is central to the hiring process because a company perceived to be underpaying or inflexible will always be fighting for attention and missing out on the top-tier recruits.

To improve retention, major companies are now strengthening their corporate training and talent management programmes. One element gives good performers the chance to rotate between roles and offices. The upside is experience and job satisfaction; the downside is staff become more “poachable”.

Rachel Ta is a partner at Derwent Executive, a regional executive search firm established in 1997

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