Durch Christine Liu McLaughlin und Margaret Kurlinski

Wenn sie den China Markt eintragen, nehmen viele multinationale Firmen an, daß ein Land mit einer Bevölkerung, die so groß ist wie China, nicht einen Mangel an Arbeitskräften haben würde. Jedoch ist die Tatsache, daß qualifizierte Arbeit an einer Prämie in China ist. Unter der dröhnenden Wirtschaft hat die steigende Nachfrage nach Chinesearbeit sein Versorgungsmaterial überstiegen. Begabte Angestellt-junge, aufwärts bewegliche chinesische Fachleute mit vorgerückten Fähigkeiten anzustellen und ein Verständnis von internationalem Geschäft-ist sogar schwierig. Wegen der begrenzten Verwendbarkeit solcher Angestellter, ist die Konkurrenz für dieses Talent intensiv.

Mit harter Konkurrenz kommt eine hohe Umsatzrate. Entsprechend einem Report durch Hewitt und Teilnehmer, hat China ein der höchsten (wenn nicht das höchste) Angestelltumsatzrate in Asien, herum 14% 2006. Es ist kein Wunder, dem eine neue Abstimmung durch den amerikanischen Raum von Handel-Shanghai die aufdeckte und das Behaltenangestellte einzuziehen ist die größte Herausforderung US Firmen stellen in China gegenüber. So wie zieht ein an und behält den „rechten“ chinesischen Angestellten-ein, der qualifiziert wird und loyal-während restliches gefälliges mit allen anwendbaren Gesetzen?

Der gegenwärtige chinesische Arbeitsmarkt
Multinationale Firmen ziehen viele ihrer Angestellten von den Universitäten und von den Hochschulen ein. Die chinesischen Universitäten und die Hochschulen haben traditionsgemäß auf akademische Fähigkeiten des Kernes wie Messwert, Schreiben und Arithmetik konzentriert. Jedoch können solche Formen der Ausbildung Fähigkeiten wie das Gefahr-Nehmen, Führung, Teamwork und andere Qualitäten kultivieren, die nicht zum Erfolg in der Geschäft Welt lebenswichtig sind. As a result, although the numbers of graduates rise every year, companies have not seen a corresponding increase in the pool of qualified talent. Additionally, domestic Chinese companies attract many top graduate students because historically these domestic organizations provide more job security than new foreign companies that are more likely to conduct mass reductions in force.

These, and many other factors create a labor market from which it is difficult to recruit the “right” employees. And unfortunately, even if the “right” employee is recruited, employers might be unable to retain that individual for long. Today, many Chinese employees are taking advantage of the opportunities a tight labor market has to offer, showing little loyalty to employers who do not provide them the opportunities they want or need. Of all the factors that lead to dissatisfaction among Chinese employees, employee compensation and benefit packages always play an overarching role. According to Mercer Human Resource Consulting’s Human Capital Forecast, October 2006, better pay was the number one reason why employees wanted to leave their company, followed by better career opportunities, training and development. This heavy emphasis on compensation makes it essential for multinational companies to have a clear compensation philosophy and keep up to date on the compensation trends in China.

The Solution
A competitive labor market and a high turnover rate among employees are issues with no ready-made solutions. Each multinational company faces a unique set of circumstances that requires different measures be taken, although there are some basic practices employers in China should consider when recruiting and retaining employees:

1. Recognize labor climate and labor law enforcement activities. With the revised Labor Contract Law pending approval in China, there is no question that China is changing the manner in which it addresses workforce needs. The draft version of the revised Labor Contract Law has already resonated through the employer community. For example, in January, the Shanghai Times reported that unionization was forced upon a foreign-invested Shenzhen iPod maker, with the local union unilaterally setting up the employee union with no cooperation of the company after years of failed negotiations. Similarly, allegations of wage and hour violations against McDonald’s, KFC and Pizza Hut have also recently attracted attention in China and elsewhere, with the All-China Federation of Trade Unions now engaging in union organizing efforts. Employers should know these trends and be attentive to enforcement activities, while embracing the concept that a flat “no” may not be the answer.

2. Develop brand recognition. Chinese employees will be more likely to accept a job with a multinational company that they are familiar with and that maintains a positive reputation. This brand recognition can be achieved through several means such as advertising in trade journals or visiting university and college campuses and interacting with students. Creating training or internship programs at local universities and colleges will not only allow students to learn about the company before committing to employment, it will also create a “buzz” around the campus. From a legal perspective, be careful not to over-promise opportunity as the expectations will be high and employees will demand that the company fulfill its promises.

3. Focus on recruiting needs for each position. When recruiting, it is important for employers to evaluate their job positions and their company’s future needs. This should be compared to each job candidate’s long-term goals, verifying that such goals are consistent with what the company has to offer. Perhaps the candidate you thought was the perfect fit for the job really wants to pursue an MBA in the United States in the next two to three years. Will his or her plans fit with the company’s?

4. Recruit outside the big cities. Though not all employees are willing to relocate, companies can attract qualified personnel from less-developed interior locations.

5. Verify employment history. For high-level positions, background checks should be conducted to ensure that intellectual property is protected and to uncover any fraud prior to employment. Unlike some states in the U.S., there currently is no particular law or regulation in China that imposes guidelines on background checks or prohibits discrimination based on criminal conviction or arrests.

6. Assess training and development programs. A Hewitt and Associates study attributes China’s high turnover rate to the Chinese employees’ lofty expectations as they relate to most companies’ training and development programs. Companies seeking to retain employees should establish training programs that are directly linked to compensation. Companies must clearly communicate to all levels of employees how the training and development programs operate. This will avoid legal problems and manage employee expectations. Companies might also want to consider job rotations to keep employees interested in their work and expose them to new areas of the company.

7. Identify competitive market compensation. It is not surprising that compensation is likely the key to recruiting and retaining qualified Chinese labor. Companies must ensure that they are offering a competitive wage to Chinese employees. During the last five years, salaries in China have risen well above the rate of inflation. Generally speaking, inflation has been about 7.5% to 8% during the last five or six years and in 2006 the average employee’s compensation increased 8.3%. Compensation plans should be outlined in employment policies or, in the case of employee-specific benefits, be provided for in employment agreements. For example, any employee performance bonus, annual wage or salary escalation term should be clearly articulated in the employee’s employment agreement.

8. Offer fringe employee benefits. With the rising costs of medical care and housing in China, fringe benefits offered by the employer can play an important role in attracting and retaining Chinese labor. However, foreign companies often make the mistake of assuming that Chinese employees understand the compensation packages available to them. In fact, many young Chinese employees are so focused on cash and equivalent pay that they tend to overlook other benefits. Therefore, it is important for companies to educate their Chinese employees about various aspects of their fringe benefits and how they work within the overall compensation system. Benefit plans should be outlined in employment policies or, in the case of employee-specific benefits, provided for in employment agreements.

9. Evaluate current infrastructure. An employer doing business in China will also want to ensure that it has the infrastructure necessary to support various training programs and compensation plans in order to avoid over-committing the company’s resources or incurring breach of contract claims when the employer cannot deliver on promises made to employees.

10. Apply recruiting and retention strategies with fairness. While Chinese discrimination laws are not as developed as U.S. discrimination laws, multinational employers must endeavor to recruit, hire, promote and generally administer all employee benefits fairly without regard to sex or other protected characteristics. Setting aside the legal implications for a moment, such practices support all of the practices listed above and will assist in the hiring and retention of good, qualified candidates in China.

Conclusion
While attracting and retaining qualified Chinese labor is challenging from both a legal and human resources standpoint, it is not impossible. Employers that are willing to take the time to understand the Chinese labor market, the impact of labor laws on the market, and develop strategies and tools to work within such a market, will likely be successful.

Christine Liu McLaughlin and Margaret Kurlinski, Godfrey & Kahn

For more details about the practices described within this update, please visit the U.S.-China Business Council’s web site.

The authors would like to thank Angela Rogers, former Godfrey & Kahn attorney in Shanghai, for her contributions to this article.