Internet let's headhunters run for a job

Marc van der Chijs of the Spill Group Asia is using his network to find a new Shanghai-based CFO in stead of using a headhunter. He post the qualifications on his weblog:

The ideal candidate would be a native Chinese with at least 5 years experience as an auditor for one of the big international accounting firms in China, plus preferably several years experience for a company in a financial management position. M&A experience would be a plus. The CFO should be an expert in Chinese accounting and taxation law (CPA title preferred), and needs to be fluent in English and Mandarin Chinese.

If I would be for a headhunter in Shanghai, this would worry me very much, since this is going to cost them clients. The situation is already very competitive and now also viral headhunting chips in. Of course, for obvious reasons this will happen first in the IT-industry, but could easily move to other sectors too, where a large percentage of the staff would be online.
Marc offers a RMB 10,000 finders fee, also for blogs that repost his announcement. But how will he know that the ideal candidate came though this weblog?

How to retain your Chinese staff

Shaun Rein

Smart remarks by Shaun Rein in Forbes on how to retain your managers. Retention is not about money alone:

1. Get rid of the glass ceiling for your Chinese staff and eradicate double-tier payment systems.
2. China's baby boomers find job satisfaction more important than money (although money still counts).
3. Chinese employees want continuous training and education.

More here.

China's labor: money matters - the WTO column

(written for Chinabiz)
A few years ago I wrote a book called "Fifteen misunderstandings about China and the Chinese" (available in German and Dutch) explaining an often ignorant outside world what kind of misconceptions they have about China. When I would have to rewrite it again I would certainly add a chapter about China's labor market. Let's tackle a few problems.
Every Thursday a group of veteran media people hold court in the Cotton Bar at Anting Lu in Shanghai and every week some of these young enthusiastic journalists, who have been evading their shrinking home markets, hope to find fertile grounds in this booming economy. They are wrong and will most likely end up as English teachers or will end up working for my colleagues Maria Trombly, who hires US journalists for Chinese or Indian salaries, depending on their preference. Being part of a declining industry does not help, also not when you are in China.

But not only foreigners coming to China complain about their possibilities, for the Chinese the situation is not that different at this stage. The other week I had an "exit-interview" with an old friend from Shanghai who had last year taken up a job with a major international company in Shanghai. There was a boy friend involved, so she wanted to come back anyway, even though her salary was the same as when she left years ago for a US MBA and a few years of international working experience. The boy friend moved back to the US and her Chinese salary was no reason to stay. "I can get much more in the US." Most Chinese MBA's do not make it even back to China. They know the market and vote with their feet. Again, on a personal level money is not the only thing that matters, but on a macro-level it certainly does.
When companies complain about the lack of experienced managers in China, they mostly have blame themselves. In our beginning practise of the speakers bureau we see a similar feature. A typical request for a speaker is "a Chinese professor, who is an authority on the Chinese economy, fluent in English and with an international outlook'. Then clients tend to be genuinely amazed that this international outlook includes an international speakers' fee.

I'm not sure whether companies coordinate the level of compensation for their staff among themselves, but I would be surprised if they would not. CEO's from leading companies would meet each other - for example in meetings of the American and European chambers of commerce - and all would have a common interest in not letting the wage increases getting out of their hand. What really is happening on the wage front is unclear, because of the lack of decent information, but hr-departments of the larger companies would at least have a clear hunch of the general developments.
In profitable industries that are expanding fast, like banking, money is suddenly no problem. To compensate for the outflow of Chinese staff, foreign banks have started to hire expats again in large numbers, a recent survey of PwC disclosed among 35 foreign banks. The banks in the survey were employing in 2006 2,800 expats, compared to 475 one year earlier. I'm sure we will see a similar pattern in upward wage costs in the years to come, not only for expats, but also for qualified Chinese managers.
I'm sure they could also keep qualified Chinese staff it they would give them a higher salary. They would be able to convince Chinese to return to China. Money matters and for money you can get competency. At this stage, international companies - with the exception of the banks - are reluctant to use the wage tool to keep staff.

The money issue might not only be limited to the English-speaking well-educated Chinese managers. A report by an institute of the Chinese Academy of Social Sciences indicates that the number of migrant-workers in China is not as huge as previously assumed. The report says that the total number of migrant workers is slightly over 50 million, while it has always been estimated to hoover between 100 million and 150 million. The media have largely ignored that rather stunning report that says that by 2009 we might see a labor shortage and upward pressure on the wages.
This is not your average "harmonious society" bullshit the Chinese media cover on a daily basis. I know the director of the institute who did the research and he is an acknowledged international expert on labor issues in China. Unfortunately, the Chinese media have not yet read the full report so interesting question have not been answered. Like: have those 100 million missing migrants never been there, or have they just disappeared from the labor market, for example because the situation at the country side has improved? The Western media are even worse: they have just ignored it.

Times are going to be interesting in China, also financially, that is, if you are working in a booming industry.

Fons Tuinstra

When your people keep on running away - part II

Welcome at school

Last week I shared with you the trouble of a foreign manager who saw his staff leave, regularly and in relative large numbers. That story triggered off quite some reactions, but none of those made it to this weblog. Some I want to share with you:

A Chinese manager now working for an international company in Europe thought it was funny, since she knows both sides of the coin. "Here in Europe people never leave their company. They hang on five, ten, fifteen years. I do not think that is healthy for both the company and their staff."
A colleague recalled a conversation she had with a manager of McDonald's. "Some people think we are a food company," he said. "Others think we are in real estate. Both are wrong. What we essentially are is a school. We get people who just come from school or have very little experience. We teach them to come on time, working in a team, dress neatly, get familiar with all the business processes. And when they know all this, after three, four months, they leave again for another company where they can use these skills. And we start training a new group of people."
A Shanghai-based lawyer thought the story lacked any sense of reality. "When people leave, it is always about money," he says. "You listen too much to those HR-people doing exit-interviews. Of course people lie then, they never say they leave because of the money, but that is always the reason."

HR-experts more positive about China's talent pool

In their verdicts about China's talent pool, I see a remarkable change towards a positive assessments, compared with the first decades of China's development. This is what Irv Beiman writes in his latest column for Chinabiz:

My prediction: During the next ten years China will experience a dramatic improvement in strategic management. This will build on tangible improvements in
national infrastructure and intangible improvements in organizational infrastructure that are being put into place. There will be an increasing emphasis on defining strategic objectives via strategy maps, measuring progress toward those objectives via balanced scorecards, and using a consistent high quality strategic management process to drive the activities and adjustments necessary for success.

He is reacting on an earlier piece by IMD-professor Bill Fischer, who wrote:

This is all about the Power of Soft-Power, and, ironically, although we've often spoken, in this column, of the unrelenting economic burden of China's vast population; when it comes to soft power, this same vast population becomes a reservoir of ideas, ambition, and talent. In this revolution, it's the individual that is the engine of the Sinocization of our future. What a reversal of fortune and perception: Chairman Mao used to speak of the singular power of China's masses, but what we're seeing here is the massive power of single Chinese.

Over the weekend I had a meeting with a seasoned HR-director with a long-term experience in China. His major challenge, it has been said here before, is dealing with the headquarters in trying to explain why he is doing the things his way in China.