Recruitment in China

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At the February Roundtable, David Parker of Geddes Parker & Partners shared his experience and insights on recruitment and HR management in China.

The key takeaway? Although everything on the surface seems different in China, some of the HR issues are actually remarkably similar to those in Australia!

The main points David made..

  1. In the past, it was possible for some foreigners to secure jobs in China without the language skills. However, in just the last 5 years, it became mandatory for all candidates to speak fluent Mandarin. No exceptions.

  2. The employment rules, regulations and practices in China are very similar to Australia. You can only employ locals directly if you operate a ‘Wholly Foreign-Owned Enterprise’ (WFOE) where you have sole legal responsibility. If you participate in a Joint Venture, your local partners are likely to take care of recruitment and HR.

  3. The process of identifying candidates in China is straightforward with online job seeking sites, advertising in local media and referrals, etc. However, it can be challenging to reference check due to cultural differences and it is usual to seek references from people other than former employers.

  4. Turnover of white-collar staff in China is around 19% per annum, which is only slightly worse than the average turnover in Australia (16%).

  5. Employment Contracts should be prepared in both English and Chinese with both parties signing the two versions to ensure no misunderstandings.

  6. Annual leave is based on total years in the workforce, not years of work under one employer. For the first 10 years of working, Chinese employees are entitled to annual leave of just one week. This extends to two weeks after 10 years, three weeks after 20 years, and so on.

  7. It is customary for Chinese employees to receive a one month bonus on Chinese New Year.

  8. The most desirable employee benefits identified by Chinese employees in 2017 (in order of priority) were:

    • Health benefits

    • Flexible work arrangements

    • Training benefits

    • Increased annual leave

    • Travel allowance

    • Child care benefits

    • Car allowance

    • Gym membership

  9. The Top 5 HR Challenges identified by foreign companies in China are:

  • Finding and attracting top executive talent (two-thirds of companies have difficulties finding the necessary skills and talent)
  • Increasing labour costs (real wages have increased 12% per annum in the past decade)
  • High employee turnover (19% per annum)
  • Lack of suitable qualifications (only 10% of Chinese candidates are qualified to work for a foreign company)
  • False Resume data (20% of candidates have discrepancies in their resumes and applications)

10.The primary motivation for most employees to change jobs is to climb the next step in their career ladder. It’s not always about the money.

To attend the next ACSME Roundtable on Tuesday 27th March discussing "How Austrade Works with SMEs in China Roundtable", please click here.

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