9 Rules of Recruitment in China

As the economic crisis ebbs away many companies in China are preparing to build up their workforces for a return to growth. With this expansion, however, companies can also expect a recurrence of acute competition for talent, particularly in hiring managers. To stay ahead of their competition and ensure that they can secure the talent they need for their development, companies both foreign and domestic are advised to follow these nine rules of recruitment in China.

1. Turnover as a Way of Life

With the return to rapid economic growth employers can expect a return of competition for talent and high staff turnover. Younger Chinese are very competitive and are always looking for career progression opportunities to better position themselves in the global market. This makes it increasingly common for Chinese employees to switch jobs every few years. While this can make it challenging to retain your own team, for companies with attractive proposals it also makes it easier to attract the talent you need without having to develop it organically.

2. Adjust Your Payroll Expectations

In 1st tier cities such as Shanghai, Beijing, and Guangzhou, salaries are approaching levels found in more developed countries. The phenomenal economic growth of China has led to a rapid rise in salaries, particularly for managerial and higher positions. This contrasts with the very stable and generally stagnant salaries found in developed countries. Cheap labor is thus disappearing in China for managerial and higher positions, especially in 1st-tier cities.

3. Hiring the Young

Due to the Chinese economic reform begun in 1978, education standards have improved drastically over the past years. This has resulted in a great disparity in knowledge and capabilities between the young and the old, especially in terms of English competency levels. This situation has thrown off the conventional thinking that senior candidates are always more capable than their younger counterparts. In fact, many directors of corporations in China are only in their early thirties. As a result, companies should be prepared to consider highly educated young Chinese as potential candidates for managerial and higher positions in China, and such positions are no longer necessarily held by senior employees.

4. Finding Candidates in the Wild

Look for passively available candidates for important positions. These tend to be highly capable individuals who are not threatened by the possibility of retrenchment, and differ from active job seekers who may have been retrenched due to performance-related issues. This is particularly important for sales positions and other areas that are responsible for a company’s profits and losses. High performing candidates usually already have a job. As a recruiter, it is your job to identify such candidates on the way up and offer them a path for climbing even faster.

5. Get Past the Phone

When hiring employees in China, companies should avoid relying on phone interviews alone whenever possible. Phone interviews not only provide insufficient information for screening candidates, but there have been cases of deceit in phone interviews where candidates engaged friends as stand-ins or other external help to disguise their own qualifications. Hence, companies should always conduct face-to-face interviews for better evaluation of candidates and prevent the occurrence of frauds.

6. The English Premium

For international companies or even local firms conducting business with foreign firms, proficient users of English are clearly desirable, but employers need to be aware of the salary premiums involved. Due to the great disparity in English competency levels existing in China, candidates strong in English can easily command premium salaries that are 30% higher than the average employee. This is partly due to the high demand for such candidates from multi-national corporations (MNCs). Therefore, be sure to carefully evaluate the level of language skill needed for each role and expect to pay a premium for proficient users of English.

7. Hire Where You Are

If your office is located in a 2nd or 3rd tier city, companies are advised to hire candidates from the vicinity. Foreign SMEs have been found to prefer candidates from 1st tier cities even when their offices are located in 2nd or 3rd tier cities, because these candidates are more likely to be able to relate easily to their employers in terms of both language as well as their expectations for corporate cultures. However, such candidates may find it difficult to adapt to the challenges of living in the lower tiered cities. This can eventually lead to high employee turnover rates and become detrimental to the company.

8. Be Prepared to Train

Likewise, as English proficiency levels tend to be lower in 2nd and 3rd tier cities, it may be difficult to locate candidates who are both good in English and have the required competencies. One way to work around this is to hire candidates with English majors and train them in the relevant skill sets. Alternatively, companies can hire candidates based on the required competencies and leave the linguistic requirements to a specialized role within the company. Therefore, greater emphasis on core competencies in 2nd and 3rd tier cities may solve potential challenges.

9. Keep in Touch

Finally, once a company has chosen an employee to hire, they should keep in touch with this selected candidate in the time before work begins. As already mentioned, job seekers in China have high expectations for their employment, and it is not uncommon to find them continuing to search for better opportunities even after having accepted an offer. Thus, hiring managers are advised to keep in touch with their selected candidates and take note if they are still keen and available to join the company. This will help to avoid unnecessary surprises when the candidate fails to show up on the first day of work.

What to Look for in a Recruiter

Given the many challenges of hiring in China, recruiters can be particularly useful in the timely procuring of suitable candidates who are committed to pursuing the opportunities your company offers. A professional recruiter is trained to internalise the specific needs of their clients and are able to accurately identify a best-fit candidate in the shortest possible time. To find a recruiter that meets their needs companies should pay attention to the “three P's” of recruitment.

Process

Many professional recruiters use a precise search process called the Social Networking System (SNS). It helps recruiters to narrow down and identify potential candidates efficiently via recommendations from one’s contacts in the relevant industry. The process is then repeated for several degrees of separation until a best-fit individual emerges from the recommendations.

Persuasion

Persuasion skills are also highly desirable in a recruiter. Best-fit candidates may be passively available instead of being actively engaged in job-hunting. In other words, they are still employed and may require substantial persuasion to leave their established portfolio. Hence, a recruiter’s ability to motivate a candidate to explore new opportunities is a crucial step in headhunting.

Positioning

The way an offer is positioned in terms of career development will also affect a candidate’s commitment to the company after the end of the probation period. Professional recruiters can provide valuable advice on structuring and positioning an offer so that it meets the candidates needs while providing the company with the talent they need within their budget.

This article was contributed by The JLJ Group, a one stop services provider assisting foreign companies to enter and grow in the China market. For more information please email to Katja.Friedrich@jljgroup.com.