This is a "Best of Freightdawg.com" article that was published in June, 2007. Since Freightdawg.com has grown considerably since then, I republish the article to a larger audience.
Last year, the American Chamber of Commerce in Shanghai surveyed almost 300 U.S.-based companies with operations in China and found that the No. 1 business challenge in China was attracting and retaining talented white collar managers.
As China's economy matures, it is shifting from a manufacturing economy to a more service based economy. This is a natural evolution as money moves into the pockets of consumers as a result of China's economic success. Service based businesses increase the demand for skilled, white collar employees with professional management and business talent. The problem is there are just not enough local Chinese with the skills to suit the burgeoning market.
Shaun Rein is the Founder and Managing Director of China Market Research Group, based in Shanghai. Recently he published an excellent article on "How Multi-Nationals Err in China". The article highlights three main reasons why multi-national firms have such difficulty in finding, attracting and keeping local talent.
Two Tiered Pay Systems with Little Opportunity for Advancement.
There is a perception that a glass ceiling exists for local Chinese staff - Western companies often import senior managers from the head office or from Hong Kong or Taiwan to run their operations in China. Many times these people have only limited experience in local customs or market knowledge. This is very frustrating to talented Chinese employees who think that opportunities should be afforded to them to run the business. This is seen as a major cause of job hopping, as Chinese employees see little opportunity for advancement in these businesses.
Imported foreign managers often make considerably more money than local Chinese managers. As a result an imbalanced system of payment exists that many local managers feel is unfair. The best Chinese managers therefore often prefer to work for Chinese firms where they feel this kind of two-tier system doesn't exist. Why work for Google when you can work for Baidu.com?
Chinese Baby Boomers Want a Balanced Life
Younger Chinese workers have experienced three decades of Chinese economic explosion. As a result they want many of the same trappings of a comfortable life that those in the West enjoy. These include more free time, more disposable income and the ability to enjoy both. Quality of life is more important to younger Chinese employees than just a quest for money itself. These Chinese Urban Professionals, or "Chuppies" want the same things young western people do. They know brands, they know fashion, but want it on their terms. That will be a difficult transition for business and Government in China going forward. It is not about "all work and no play".
Education / Training Opportunities
China's educational system is largely based on rote memorization. Chinese employees want and need more advanced education that prepares them for the dynamic pace of business. Younger Chinese employees value education and training. They see it as a link to better pay and quality of life. Firms that can offer educational opportunities are likely to be able to attract better candidates and keep the talent they invest in. Especially prized are overseas assignments for Chinese managers or trainees. American hotel chains such as Ritz-Carlton, Marriott and Starwoods excel at this.
Chinese HR Professionals: Pure Gold.
In a previous article, I highlighted that in addition to savvy business managers, it is critical that multi-national firms hire and retain skilled Chinese HR managers. These are among the most highly prized of all available Chinese business professionals because they understand the local market and can advise multi-national management teams on what it takes to satisfy and retain local talent. Chinese HR professionals often command as much as a 20 percent premium in salary above other Chinese management professionals according to Korn/Ferry due to their rarity.
Eric
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Splatty,
In my experience in Shanghai, many of the logistics firms are not looking for more expat hires. they are bringing people in from Singapore and HK, and flying U.S. staff out for the 2 week trips.
Opportunities do exist, mainly in sales, and those who are looking for operations positions will find it difficult given China is operationally so different.
Posted by: All Roads | June 03, 2007 at 02:40 PM
Splatty, I think China is a green field for a lot of people with expertise. I happen to know several folks who migrated from the SFO bay area to shanghai on a consultant basis. What they had working for them were advanced degrees (MBA mostly) and ability to speak at least some Chinese.
Chinas a rich green field for those with ability and experience. Remember China has lots of ability, but still needs infrastructure in some areas. Logistics is one. Ability in that area will be prized.
Eric
Posted by: Eric | June 02, 2007 at 01:17 AM
Eric,
Do you think that there are still opportunities for American expats to find jobs in China; especially in the logistics sector?
Posted by: Splatty | June 01, 2007 at 11:23 PM
China Law Blog has a nice follow up piece on Shauns original article linking various blogs, including this one, that discuss the topic of underserved young management talent, not only in China but globally.
Posted by: Eric | June 01, 2007 at 08:32 AM