MNCs vie with domestic companies to acquire more Chinese professionals

Even as foreign experts head to China to gain valuable international exposure, multinational companies in China are looking for ways to incorporate more local talent.

With attention turning from buying to selling, multinational companies in China are scrambling to fill positions both at home and overseas with local talent who understand the complexities of marketing to Chinese consumers.

However, competition from domestic companies and restrictions in the form of labor laws are making this a difficult task. Rapid expansion of domestic and foreign companies has left skilled employees in high demand.

"In general, there is a trend to localize, so for foreign companies nowadays the discussion is more about how they can find a Chinese person to do the job," says Chun Liew, senior associate at the Beijing office of the professional staffing firm Direct HR.

"Since Chinese managers know the local market better, and it is assumed that they can do a better job," he says.

Such perceptions have helped buoy the local talent market and with it salaries. According to a study conducted by the London-based research company ECA International, workers on the Chinese mainland will receive an annual wage increase of 8.5 percent this year.

"There is an ongoing skills shortage in China as foreign and local companies are chasing rapid expansion, growth targets," says Lee Quane, regional director for Asia at ECA.

Being in high demand has its advantages and many companies are willing to pay more to retain talent, knowing that failure to do so may lead to poaching.

"The skills shortage has forced companies to increase wages to retain qualified staff, thereby narrowing the gap between Hong Kong and mainland-based employees," Quane says.

But raising salaries alone has not stemmed the flow of Chinese job-hopping and increasingly they are settling with Chinese companies.

Working for multinationals is not as attractive as it was for new graduates and unemployed professionals.

According to a recent survey by China HR, part of the Monster Worldwide network, only 25 percent of the fresh graduates showed interest or enthusiasm in working for a multinational company, compared with 50 percent in 2007 and 66 percent in 2004.

The reasons cited for the lack of interest in positions that most in the job-scarce Western world would consider good are multifaceted.

One suggestion given is that Chinese jobseekers prefer the "family culture" of working for a domestic state-owned enterprise or company.

Though large corporations often flourish in a competitive environment, local employees prefer to work in the familiar Chinese environment, another study suggested.

The high growth rate of Chinese SOEs and their rapid push to globalize operations are other factors some experts cite for Chinese talent flocking to domestic companies.

According to data provided by the Ministry of Finance, profit growth for SOEs reached 39.7 percent in 2010, slowing slightly thereafter.

While multinationals tasted success in China earlier, it is hard for them to match the breakneck speed with which their domestic counterparts have been growing.

For many of the younger generation, taking part in the historic modernization of the country is enough to make them work for a domestic company rather than a multinational.

"I would want the international experience of working for a foreign company, but I still prefer the feeling of working for a Chinese company," says Xiang Ye, a business student at Renmin University.

"I don't know Western ways that well, but with my way, I know that I am helping build China."

toddbalazovic@chinadaily.com.cn

(China Daily 05/17/2013 page5)