Halfpats: de nieuwe Emigrant
Door Richard Brubaker
In termen van personeel, wordt het huidige debat geconcentreerd op de voortdurende behoefte aan multinationale bedrijven in China om het inhuren van lokaal personeel, in het bijzonder voor verrichtingenbeheer te verhogen, terwijl het verminderen van of volledig het verwijderen van emigrantpersoneel. De redenen voor deze verschuiving weg van emigrantpersoneel omvatten de hoge kosten van salaris en voordeelpakketten, twijfelachtige waarde (in termen van productiviteit en capaciteit om de zaken te drijven), hoge aantallen mislukkingen en onlangs, de grote dadelijk beschikbare reeds gebaseerde talentenpool van emigranten in China („halfpats“).
Velen binnen China zijn het ermee eens dat er een tekort aan lokaal talent in de middenbeheerssector is. In het verleden, was dit een significante kwestie aangezien de bedrijven slechts twee opties - hadden om duur emigrantpersoneel van lokaal personeel overzee in te huren en opnieuw te vestigen, of goedkoop, onervaren. Eerder, dit H.R. het besluit werd genomen moeilijker door het feit dat vele bedrijven nog aanwinst een stevig steunpunt in China hadden. Zonder een stevig spoorverslag achter hen, moesten deze bedrijven het essentiële het huren besluit nemen van het plaatsen van hun toekomst in China in de handen van één manager, die voor het leiden van de strategie van de marktingang verantwoordelijk zou zijn.
In de laatste 5-10 jaar nochtans, is een nieuw ras van manager - de „lokale huuremigrant“, of halfpat te voorschijn gekomen. Na de vertraging van de V.S. economy in 2000, western and Chinese professionals begun relocating overseas, to seek better employment and career opportunities. In China this resulted in a new wave of halfpats, typically fresh graduates or professionals with less than 5 years work experience. Many had already studied China’s language, culture and business environment for 1-3 years while in the U.S., and sought opportunities that leveraged these assets in China.
Expatriates
An expatriate (expat) is typically a Western-trained senior level manager who has accumulated 15-20+ years experience within a single industry. Usually recruited for their ability to oversee a particular division of a multinational company, outside China, their scope of work expands to include higher-level managerial duties, in China. Typically relocated with their family in tow, these managers don’t have any local language skills, aren’t particularly culturally aware or have any significant understanding of the local market. Their strength lies in their knowledge of the industry and they ability to manage business units back home. Recently though, we have seen the emergence of the “perpetual expat”, who moves from one foreign market to another.
Typically a China post (or any international posting for that matter), is granted towards the end of a career or as part of the final progression towards a Vice President or CEO level position back in the home office. With their years of management experience and long-term understanding of the corporate culture, expats are expected to: instill key qualities/values in local staff; increase market share in existing markets; identify new markets for business growth; and manage a reduction in manufacturing costs. Expats tend to see their China stint as a 2-3 year temporary assignment that will conclude with them and their family being repatriated to the home office.
The first 3-6 months of an expatriates stint in China are commonly perceived as a honeymoon period. Both business and private life offer new, exciting glimpses into another culture and another way of getting things done. A simple visit to a supplier can result in a dinner at a local restaurant and a relaxed, interesting conversation conveying a sense of adventure for all involved. However, the following 2 ½ years can rapidly descend into a series of difficult, frustrating experiences which are exacerbated by a lack language skills or clear understanding of social and cultural nuances, which affect all aspects of business and private life and often result in severe culture shock.
Halfpats
Whether lured by a sense of curiosity or a strong belief in China’s potential, in the last 5 years a significant wave of foreign halfpats (including overseas-born ethnic Chinese) began studying Chinese language and culture in Beijing and other key cities. The majority, recently graduated or young professionals, moved to China without a predetermined career path.
After the first 6-12 months of language training, most of these halfpats began their China careers in the fields of market research or business development. For the majority, who were rarely technically-trained, their value lay in their Western training/education and their ability to communicate in Chinese. They were capable of developing effective networks, communicating efficiently with foreign clients and managing lower-level execution by small local teams. Generally, these positions offered little more than a chance to learn how to conduct business in China, as salaries were often low, heavily commission-based and without benefits (e.g. accommodation, transportation or health insurance). The value of these jobs was the badge of honor afforded by on-the-job training after 1-2 years, when better salary packages were offered.
The Pros
There are more than simply financial benefits to hiring halfpat staff. Perhaps the greatest advantage is their cultural understanding and language skills – which simply cannot be underestimated in a market like China. These two characteristics allow halfpats to hit the ground running and give them a sustainable advantage over traditional expat managers.
The overall stability and long-term commitment of halfpat staff is also superior to that of the average expat. In fact, many remain in China for a 5-10 year period which makes them less of a risk in terms of failing to complete their assignment. Its estimated that 60% of expats are unable to complete the duration of their assignments. Considering the cost of relocating an expat and their family to an entirely new country, it is in a company’s best interests to reduce these high levels of staff turnover and failure rates.
Halfpats are also far more capable of moving throughout the country quickly, due to their considerable network of contacts after 3-5 years – which again, simply cannot be underestimated in China. This characteristic means halfpat staff can produce results at a faster rate than an expat, which saves the company considerable investment funds.
Finally, as students of the language and culture, halfpats are far more capable of identifying cultural trends that can be crucial to the company’s development, overall business strategy and ability to outperform competitors.
The Cons
The key concern in hiring halfpat staff is determining their ability to understand the industry, the company’s position in that industry and their potential to use this information to drive the company forward. The biggest tradeoff between halfpat and expat staff is the halfpat’s lack of familiarity with the company, its operations (locally and globally) and its overall strategy. The time required for them to learn this, and their in China, must be carefully assessed.
From a long term perspective, another concern is that halfpats may find it difficult to see their long-term career goals played out within the company itself. Unlike expats, who are sent to China, halfpats don’t necessarily have a job at the home office to return to. In fact, many halfpats may perceive a stint in the home office as their “expatriate assignment”. Therefore its important for multinational companies that hire halfpats to understand their potential career path within China – regardless of whether that path leads to senior positions in China or the home office.
Conclusions
The changing needs of multinational companies in China have led to a change in staff hiring practices and H.R. requirements - particularly the reliance on expat staff.
Where expats were once the only option companies had in terms of foreign staff hire, a new breed of professionally qualified, Western-trained, bilingual non-local staff has changed the H.R. landscape. These halfpats have provided companies with a financially viable alternative to expat staff, often accepting salaries that are less than half that of the average expat.
Halfpats, with prior work experience of 3-4 years, and prior in-country experience of 3+ years, have already proven their ability, desire and commitment to operate in China. By taking advantage of this experienced, readily available talent pool, multinational companies have the ability to locally recruit and train well-qualified managers and increase staff retention rates.
Richard Brubaker, All Roads Lead to China
May 7th, 2008 at 8:45 am
Excellent Article Richard! I like the term halfpat for local foreign hires. There is yet another category thought that doesn’t fit your description, one that I am seeing much more frequently, and that is the former experienced China expat who wants to stay in China and not accept relocation to home country or elsewhere either from a love of working in China or as opportunities elsewhere are just not as exciting growth wise as they are in China. Some become entrepreneurs, while some are looking for employment opportunities. There is a particularly strong cadre of former Asian expats in this category as well as many “retired” western executives whose children are grown and who have 20+ years working experience. Compensation expenses for individuals such as these are often much lower than full expats, they usually have a lot of hands on China experience, and they want to be here!.
While you touched on this, one major perceived value of a seconded expatriate in the eyes of the local employees is the long history and relationships that expatriate has with the head office. He/She is seen as the one who is key to educating head office, and key for marshaling support for the China operation. One difficulty halfpats encounter is the lack of a HQ network and the need to build trust with a lot of people who are frankly quite ignorant about what is going on here.
May 9th, 2008 at 2:21 pm
Good article. My business partner and I were just discussing the idea of hiring westerners that were in China for lower paying jobs such as teaching English. It seemed to us that they were a inexpensive way to inject soem western common sence into our overwhelming Chinese company.
May 9th, 2008 at 7:08 pm
An expat who is currently working in a Chinese University was changed from expat to halfpat last year when his contract ended. He could not survive and will be returning to Canada soon.
Someone offers me peanuts to work in Shanghai. I live in the UK, a British citizen and of South East Asian chinese origin. A nearly cheated halfpat!
Richard, very interesting article.
May 12th, 2008 at 1:04 am
Interesting ideas here. I myself am actually currently aspiring to become a “halfpat”. I’m still studying at university, but have studied and worked in China for one year so far. This experience alone has helped me to find an enriching job in which I’m learning the ins and outs of trade in China.
I’m planning to return to China latter this year, purely to learn more of China’s culture, improve my language skills, and acquire more first hand business experience. To me this is just as important as my university studies here in Australia as I’ve always felt that this kind of knowledge that can only be acquired through cultural immersion, is what will differentiate me from every other graduate in my year.
That said, I also feel that expats still play an important role in foreign companies in China. For maximum results companies should be willing to create an environment where “halfpats” can share their cultural knowledge and passion for China with “expats”, while at the same time, “expats” can use their home nation knowledge to guide “halfpats” through the international business world. A symbiotic relationship by definition would prove to be mutually beneficial in that “expats” might be encouraged to stick it out in China and “halfpats” could become more interested and loyal to the company they’re working for.
An investment in this kind of HR structure would have undeniable benefits.
Lastly, I personally am excited to work in China as I’ll have the opportunity to work with local staff. Chinese staff may soon prove to be the most valuable employees to foreign companies, as they are obviously the most culturally aware and have the greatest local knowledge with which to share with other employees. Instead of stumbling through business in China and learning through trial and error, a lot can be said for watching and learning from one’s colleges.
May 16th, 2008 at 5:36 am
What about a half-time expat? Our company recognized the costs of expats, although are pleased with their performance. I face becoming an expat not for three years, but 6 months–possibly a couple months at a time over a year. The idea is to leverage and train Chinese to take over as soon as possible.
May 20th, 2008 at 2:30 pm
I think it is still an open question if there really is such a huge difference between expat and locals in pay at least for the top jobs? And what is really a half-pat? It used to mean a foreigner with decent pay but without the house and perks. If I make 1.1, live in my own place and send the kids to a local school I am an expat or a halfpat? Most locals taking my job would expect 1 mill, lowest possible is 800k, which I had for years. If you are qualified, chinese speaking, maybe former expat then why should you sell yourself cheap?
May 23rd, 2008 at 4:16 am
I would like some advice on how to obtain a job in China.
I work in Denmark as Quality Coordinator in a medical device research company.
It seems to me my work experience and education will create the following types of career possibilities for me in china.
(based upon the headhunt offers i receive for jobs in Northern Europe)
1) Regulatory affairs manager external partners
2) Auditor
3) Supply chain manager (Quality)
4) Quality coordinator / Quality manager
My problem is that i do not speak chinese. What can i do to ensure i will receive headhunt offers for jobs in china.
I have considered it would be an advantage to
1) work for a danish company because my knowledge of danish will partly offset my lack of chinese speaking skills
2) personally apply for the work and residence permit in advance instead of having the company have to do that amount of paper work. Are there anyone with experience in the requirements for work permits in china?
3) change work to a big danish company with activities in china in order to increase the chance of an internal transfer to china
(it does not have to be a danish company but it seems practical due to reason 1)
May 26th, 2008 at 11:15 am
Hi Richard,
I enjoyed your article…I don’t feel quite so lonely anymore!
I’m currently working in Taiwan in sales and marketing for a local company. They also operate a facility in China.
Came to Taiwan on hiatus from a few years of work for a US MNC. Took some time to pursue travel and music and eventually found myself here.
I can literally count on both hands how many halfpats I’ve met in Taiwan. It’s true that there’s a pool of semi-experienced, educated, bilingual non-locals just itching to get into the professional circuit in Taiwan or China.
It would be exceedingly easy for foreign MNCs to hire these individuals (economically and logistically). There’s always the ’service’ visa problem though, but with a MNC sponsor, it shouldn’t be a problem.
A lot of bright people here, let me know!
Cheers
May 28th, 2008 at 4:03 am
Great article and interesting discussions.
I now have a clearer definition of an “expat”. i used to think that anyone sent overseas from an office abroad is considered an “expat” but knowing years of experience it takes and the importance of the role i feel comforted that i am not making as much as these “expats”
I guess it makes more sense for companies in china to recruit mid-senior positions from countries such as Taiwan, Singapore and from HK. These overseas Chinese understand the language, culture and are also able to fully integrate the two together.
May 28th, 2008 at 10:44 am
Charlie,
There are also a lot of problems with hiring overseas Chinese into mid-senior positions in China. Having recruited mostly local Chinese for foreign companies in China now for 13 years, I can’t tell you how many times locals have expressed dissatisfaction with their treatment by overseas Chinese managers. There is a lot of regionalism and pride in China and many overseas Chinese have little understanding or often even disdain for local culture. Beware of generalized prescriptions on hiring and carefully vet those you hire for their interpersonal skills and cultural sensitivity.
May 28th, 2008 at 11:58 am
Terry,
i agree with you. i think HK/Taiwanese managers are infamous for their demands. This is because back in our home country (region) the employment sector is hyper competitive due to high population density, more or less equal backgrounds and skill sets. One would have to work extremely hard to stand out in the crowd. Demanding exceptional results with normal pay is the norm.
With overseas chinese managers being used to this environment or having worked for these types of managers they expect the same from local Chinese staff.
However, i do feel that overseas Chinese managers with “western” background or education are better at bridging the gap between the “hardcore” and the “lasse fair”
May 29th, 2008 at 5:11 am
Hello all,
I am looking for a manadrin speaker in Principal Investment area to do distress debt and special situation, do you know anyone in the market? It is based in HK and Singapore.
Thanks for your help.
Claire (claire.lin@tardis-group.com)
May 31st, 2008 at 2:46 am
Great article and discussion. I love the term half pats, I think it is a much better term than “local hire” which I have been using for years. I am halfpat myself who has been working for Expats in China for years. It seems that the number of halfpats has grown dramatically in Shanghai over the past two years. Does anyone have any stats on how many “halfpats” are working in China now?
June 6th, 2008 at 1:44 pm
This is an interesting discussion and I’d like to weigh in with a few observations.
I was a “halfpat” in Eastern Europe for 7 years and then an “expat”in China for 5. It is incredibly amazing how alike the two areas have in terms of how the employment scene developed.
Companies started out by bringing their own people with the understanding that they should train up the locals to take over the roles in a short time. This worked for awhile but then led to the “revolving door years” as locals got experience and then jumped from job to job for higher and higher salaries.
In both regions this led to situations where people moved so quickly that while their salary rose, their skill set did not keep pace. Suddenly costs were up but performance wasn’t matching it. In many cases locals were getting as much if not more in compensation than the expats - thereby reducing one of the biggest perceived benefits of the markets.
This opens the gates for the halfpats but often they are less experienced than the senior level expats were or new to the industry. While culture and market knowledge is great it isn’t the whole picture either. Enter the second wave of expats….
This cycle has kept management recruiters, consultancy groups and HR gurus around the world in business over the years. I spend at least 1-2 days a week on this very issue with my clients. The number one question? “How is it possible that a (fill in the blank……..sales director, VP, GM etc.) costs that much when the market is SUPPOSED to be low cost?”
If anyone ever comes up with a real solution to this they will really and truly be able to retire wealthy.
*and please let me know as soon as you do - I have about a dozen clients who will want to talk to you!)