“Rosanna Terminio studied Economics in Milan and Barcelona, and is presently studying the Degree and Master in Oriental Studies from the Universitat Oberta de Catalunya. She started her professional career in Spain for a French multinational company focused in International Trade. After 3 years she moved to Barcelona to work for Asecorp as assistant of the Director in the Internationalization and Innovation department. Her main role was coordinating the establishment of companies and finance projects with the China division. Since October 2008 she manages Asecorp’s division in Shanghai focused on establishment, finance and accounting and HR consulting services for Western companies with interest in the Chinese market”.

CHALLENGES OF THE CHINESE LABOR MARKET

The Chinese labor market is becoming more and more competitive and it is difficult for the companies to find professional and stable staff requiring the HR departments and Managers to spend a lot of time in research and training of the staff facing high turnover rates, overpaid inexperienced personnel and salary increase as main solution for qualified staff retention. 

The Chinese labor market has to be considered as a market where it is the labor force to have the last word on the job offer. If most of the time salaries are the main motivation to change jobs, since the effects of the financial crisis that slowed the labor market until 2010 Chinese New Year, more and more persons are looking for stable working environment which can provide an organized structure, status position, training and increasing perspectives for career development. Based on our experience in recruitment, it is quite common that valuable candidates even for medium level position need detailed information on the new employer turnover and projection plan for future development in China.

The main problems a foreign company faces when willing to hire a talented local staff, mostly if the profile is quite technical, are mainly due to the lack of talents with a relevant long term experience which at the same time are open minded and have a good English level, enough to be able to communicate with the correspondent staff in Headquarters.  When defining the content of the job position, the main responsibilities and the expectations from the desired employee need to be realistic and not expect to find in China the same kind of profile that will be possible to find in the country of origin, not only because China has a different culture but also because the experienced workers come from a different enterprise culture and there are few talents in the market that can have the same experience as in the West and, for a similar position, can fit in a Western organization. When hiring new staff, it is essential to consider someone with more than one year experience in a foreign company, this will help the new employer to benefit from the previous company effort to make this employee get used to the western enterprise style, by making a faster adaptation to the workplace and shorter time spent in training, and focusing on those aspects most relevant for the company core business.

Furthermore, the development rate in China causes more and more new opportunities to arise, causing the labor market to be very dynamic and creating a high mobility. It is common, mostly in Shanghai, that the average rate of each job experience is slightly over 2-3 years and that more and more people with good English level but very short time experience demand high salary rates as compared to similar profiles in the West, causing a bad perception of the candidates on the job opportunity, filtered by the salary package proposed, rather than by the career development opportunity compared to the cumulative experience.

As an example of the challenges that the foreign companies have to face when hiring Chinese staff, we can see the staff in the accounting and finance department. According with the article of S.S. Gao “Accounting education and practice in China. Perceived problems and solutions,” published in the book Accounting and Finance in China by Longman, China’s first accounting standard was formally promulgated in 1992 by the Ministry of Finance and adopted the American-British model of accounting regulations. The lack of highly qualified accounting staff is a constant serious problem in accounting education in China:

• Most senior accounting staff has been trained under the Soviet model
  
• A generation of accounting staff has been lost because of the radical view toward management education during the Cultural Revolution (1966 – 76)
  
• Western accounting books have been translated into Chinese; however, the translation has been too literal and hard to understand.

This leads to the fact that, as compared to their counterparts in Western countries, the accountants are quite young and vulnerable in China.

In this scenario, it is happening that, in order to attract new talents, the companies are increasingly entrusting the HR research to experienced companies in order to reduce costs and improve the result not only for the research but also to be able to understand the candidates profile which best meets the company’s objectives and the market real situation in accordance with the budget provided by the Headquarters.

For further information please contact : rosanna@asecorp.cn