Tag Archives: China Headhunter

China Dream Sours for Foreign Companies- Financial Times

Tuesday, 13 August 2013 03:37

Government investigations and state media exposés targeting foreign investors have become a regular feature of the country’s business landscape By Tom Mitchell in Beijing The “Chinese dream” articulated by China’s new president, Xi Jinping, is fast becoming a nightmare for some of the world’s most powerful corporations. Mr Xi’s speech, on his accession to the presidency in March, hinted at a more assertive approach to match China’s economic power – and since then, government investigations and state media exposés targeting foreign investors have become a regular feature of the country’s business landscape. Public officials say this simply reflects broader efforts to tackle bad practice, but some executives complain that foreign groups appear to be encountering particularly heavy scrutiny under the new leadership. Those suspicions were reinforced this week, when the powerful National Development and Reform Commission fined six baby formula manufacturers $110m for anti-competitive pricing policies. Five of the six companies were well-known multinationals including Mead Johnson of the US, Danone’s Dumex unit and New Zealand’s Fonterra group. This first high-profile enforcement of Article 14 of China’s 2008 anti-monopoly law, which bans companies from imposing retail price floors for their products, came just weeks after an explosive police investigation into bribery by staff at GlaxoSmithKline, the UK pharmaceuticals group. None of the milk powder companies is challenging the NDRC’s penalties, and GSK has said some of its employees may have violated Chinese law. Other investors in China have had to fend off state-media campaigns accusing them of lesser sins such as quality control failings and poor customer service. Apple’s chief executive, Tim Cook, made a high-profile apology on April 1 for “misunderstandings” and stressed his company’s “immense respect” for China. State media had accused the company of “greedy” and “incomparably arrogant” behaviour, citing complaints about substandard after-sales service for Chinese customers. Volkswagen recalled 380,000 vehicles because of gearbox problems highlighted by an investigative report in March by CCTV, the state broadcaster. For some executives, the critical drumbeat in the five months since Mr Xi and his premier, Li Keqiang, formally took power has been too intense to be dismissed as a coincidence. “They may have found something against these [foreign] companies,” said one lawyer who defended a multinational targeted in the NDRC’s baby formula investigation. “But what about the Chinese companies?” “As a government official, going after state-owned companies is difficult,” adds Steven Bing, an analyst who previously worked in China for several western pharmaceutical groups. “So if you want to make an example of someone to fix the system, you target the foreign companies.” Chinese government officials reject suggestions that there has been a co-ordinated effort to gang up on foreign investors. On Thursday, the NDRC denied that its investigation into pricing practices in the baby formula market was coloured by anti-foreigner bias. In a statement on its website, the commission dismissed such speculation as “groundless” and welcomed the “important” role played by foreign investors in China’s economy. The government’s defenders point out that a Chinese company, Biostime International Holdings, paid the highest fine in terms of percentage of annual revenues, equivalent to 6 per cent of turnover. Illinois-based Mead Johnson paid the largest fine assessed: Rmb204m ($33m), or 4 per cent of its China unit’s turnover. The anti-monopoly law allows the NDRC to impose fines ranging up to 10 per cent of a company’s annual revenues. Two foreign companies, Nestlé’s Wyeth Nutrition unit and Meiji Dairies of Japan, were also included in the NDRC’s probe but were not penalised. Some observers believe that the action against foreign companies is merely part of a much bigger government campaign. “I wouldn’t say the anti-foreigner bias is as strong as some people might think,” argues Veronica Lockyer, a competition lawyer with Orrick in Shanghai. “There are often other motivations in the background for anti-monopoly enforcement.” Chief among these is the government’s determination to assuage public discontent over the high price of essential goods and services, especially as an aggressive propaganda campaign attempts to foster the idea that every citizen has a stake in Mr Xi’s “dream”. As Robert Parkinson, at recruitment company RMG Selection, says: “The cost of living in Beijing is just crazy for younger workers.” Spiralling healthcare costs are of particular concern to the government, and many suspect this is a factor in the criminal probe into alleged bribery and corruption by some GSK employees. The NDRC is separately conducting a review of pricing practices in the pharmaceutical sector. The high cost of foreign milk powder brands also makes them an easy target. Demand and prices have soared in the five years since tainted domestic formula products killed several babies and made thousands more sick. Some lawyers also point to a long but quiet build-up in pricing and other anti-monopoly investigations that targeted both foreign and local companies and predate the Chinese leadership transition. Before these investigations, enforcement of the 2008 anti-monopoly law had focused on asserting Chinese regulators’ right to weigh in on the world’s biggest merger and acquisition agreements. Glencore is selling a Peruvian copper mine, which could fetch about $5bn, as a condition for Chinese clearance of its merger with Xstrata. “Previously the anti-monopoly law was all about merger law and merger filings,” says Ms Lockyer. “But there were signals last year that something else was going to happen. The NDRC in particular had an increase in its personnel. It was a sign that it was beginning to flex its muscles.”

Read the origional version at:　http://www.ft.com/intl/cms/s/0/4c9d9f06-00bd-11e3-8918-00144feab7de.html

Logistics & Shipping Industry: Build your Sales Team beyond the Client List

Thursday, 08 August 2013 05:40

China’s Shipping & Logistics industry is hungry. Whether they are Global Top 10 or medium-sized, every carrier and freight forwarder is looking for the same talent: Excellent sales people to get ahead of competitors.

A regular used measurement for a good sales person is the ownership of direct business, summarized as a client list. This list of yearly/monthly shipments is often regarded as the “hard skill” of a sales person. The quality of this list often decides whether an offer is extended or not. But how relevant is a client list for the hiring decision?

For a sales people, an employer is a platform to develop new business. A sales person depends on the operational strength of the company. A job change would be a rational option only when the new employer provides a better platform for the candidate’s current and future business partners.

Thus, the client list is only relevant when the hiring company can provide a stronger platform (operations, customer service, shipping rates etc.) than the candidate’s current company. If not, the candidate’s clients would have little incentive to transfer. This may leave the candidate empty handed.

Rather than merely looking at the candidate’s current shipments, companies should recruit sales people fitting their own strengths and weaknesses. Companies should realize that only a small proportion of sales persons would actually be qualified for their business niches. Consequently, it becomes incrementally important to have your selling points ready to attract those truly value adding sales people.

Ruben Van Den Boer Consultant and Logistic specialist at RMG Selection

Logistics & Shipping Industry: Build your Sales Team beyond the Client List

Thursday, 08 August 2013 05:40

Ruben Van Den Boer Consultant and Logistic specialist at RMG Selection

HR: What to Do for Employee Retention in 2013

Monday, 05 August 2013 09:00

According to the China Talent-Flow Survey Report conducted from January to March in 2013 by RMG Selection, it is shown that amongst over 2000 respondents, the proportion of job hopping reached 32% in 2012. The proportion of people who increased their demand to change their jobs in 2013 reaches up to 43%. I have to say that the number makes me think of employee retention again, which is quite a bothersome topic to many other companies too. So what can we do to keep them?

Firstly, I have to clarify that keeping staff members does not equate to keeping everybody. A low turnover rate does not mean that the company is performing well in keeping staff members. In this regard, it can be explained by the Pareto Law that only 20% of people create 80% the value of a company. Therefore, we should only keep those valuable employees. By improving the professional durability of the valuable and enhancing the mobility of the invaluable, a company can stay healthy and dynamic. According to research conducted by RMG Selection among over 200 long-term clients, the recommended turnover rate of the 20% core staff members is only 4%.

In general, the strategy of keeping staff members should be considered both psychologically and materially. Recently, people have been paying more attention to psychological measures. However, the material measure which plays an important role is somehow neglected. Although the incentive of salary increases merely last for less than half a year, the material strategy is still the base due to its existence and rationality instead of its quantity. In this regard, even if you pay more attention to the psychological needs of your staff members, without proper pay raises it is still difficult to ask them to stay.

Most companies have a salary raise system, but it might not be easy to decide the range. Actually, the range of pay raise reflects, to a large extent, the recognition towards the staff members in the year or in the recent period. Specific assessment and step construction can provide great satisfaction for excellent staff members. Therefore, high pay raises should be issued for the excellent employees, while the unqualified ones should not be rewarded in this case. The amount of salary increase needs to refer to the expectations of employees in job hopping.

According to the China Talent-Flow Survey Report, the pay raise expectations are listed below.

34% employees expect around 20% to 30% salary increase
28% employees expect around 30% to 50% salary increase
Only 17% employees expect 10% salary increase

Excluding the cost consumed in changing jobs, companies may offer a 30% salary increase for those who rank among the top 5% in the performance appraisal based on their own financial conditions. Following a step-decreasing trend, the 5% at the bottom should be considered to be knocked out.

Additionally, diversified material incentives- including annual bonus, training, traveling, and transportation, communication and house subsidies have become the primary choice of many companies. It is worth mentioning that by taking some humanized steps one can get twice the result with half the effort. Take RMG Selection as an instance; more than 50% of the workforce is female. Last year, one of the female employees was hurt accidentally in a fight on the subway. The human resource department immediately suggested that any female staff members who wanted to practice self-defense should be able to learn it in a sparring club nearby. What is more, half of the cost should be borne by the company. In this case, whether the employee attended the club or not, the influence was quite positive.

As for the psychological measures, an environment where employees can grow up very fast should be created so that they would like to stay in the company willingly. In order to create such an environment, a company should make it clear to every employee about its expectations in the first place. To be specific, the employee should be clear about the expectation of the company, how to achieve the expectation, as well as what kind of results should be gained. Moreover, once employees meet the expectation, they know that they will be rewarded. In this regard, every employee will reduce the time of doing unnecessary work in such an environment and system. Employees will look forward to a bright future. Additionally, a manager should respect his or her employees by using proper language and behaviour. It is not really difficult to make it if you viewpoints are from two aspects. Firstly, encouragement towards small progress should be enhanced. Secondly, before you want to start a conversation or take actions with your employees you should think about whether your words or behaviour would discourage them. Over time, employees can feel the positive recognition from the company and the leader. Last but not the least, besides the number of conversations specified between the line manager and the employee, cross-level communication channels, especially private meetings should be added so that the communication process becomes so much easier. The human resource department should bear part of the responsibility to communicate with employees. Regular conversations with employees should be arranged, which develops the single-line communication channel to a multi-line tridimensional system.

As this is a vast country, more attention is paid to the cross-regional employees’ retention issue in China. Not only do more and more companies develop branch offices in different cities, but the job hopping choices of people are not limited. According to the China Talent-Flow Survey Report, over 70% of people would like to work in other cities if there are good opportunities. Among them, the proportion of males is 10% higher than that of the females. The data is actually good news for nonlocal recruitment, which is also the basis of keeping employees in different cities. Even for those aged around 31 and 40, who are often regarded as the most family-oriented people, 5% of them could work in other cities. According to our research, the reason why some talents would resign is that they hope to return to their hometown or they would like to work in cities like Beijing, Shanghai and Guangzhou. If the human resource department is able to effectively develop the potential of current staff members, not only could the talent-loss be saved, shortage of manpower in new offices can be solved as well.

Here’s good example could learn something from:

United Technologies Corp (UTC) is one of the largest manufacturing companies all over the globe. In July 2012, the acquisition of Goodrich by UTC was finalized; Goodrich and Hamilton Sundstrand got combined to form UTC Aerospace Systems, a world leader offering integrated technologies and systems for the aerospace and defense industries with more than 40,000 employees around the world. According to Cindy, human resource manager of UTC Aerospace Systems in Tianjin, an internal recruitment net is designed and developed by the human resource department. Internal employees can apply for jobs in different cities or subsidiaries or even abroad positions inside UTC. This system meets the needs of those employees who hope to develop in other regions. The application also will not be noticed by the people who are not from the human resource department. Only when the recruitment is accepted, will the notice be sent to the line manager. In this way, the enthusiasm of the employee can be guaranteed.

Employee retention is a long-lasting and extensive issue. On the premise of the guaranteed fairness, different measures should be developed towards different classes, regions and functions by the human resource department. For instance, it is indicated in the report from RMG Selection that last year the flow rate gap amongst different functional departments reached 30%. The highest one was government affairs (55%), while the lowest belonged to the IT industry (18%). Therefore, by improving and practicing constantly we can keep those valuable employees.

By Robert Parkinson

HR: Attract Employees from Tier-one Cities to Tier-two or Tier-three Cities

Monday, 05 August 2013 09:00

In recent years, China has been reshaping its industrial landscape and tier-two and tier-three cities are now considered as the new developing markets in China. Both State-owned enterprises and multinational companies are taking the opportunity to shift their businesses to these new markets that promise lower start-up and development costs (labor, capital, materials costs). Corporations can also take advantage of the working process of tier-two and three city officials that they seem to be easier and more supportive than tier-one cities in granting land approvals. However, tier-one cities remain the preference for many skilled workers and experts due to the better standard of living and working opportunities. Therefore, how to attract more talent from tier-one cities to work in Tier-two/three cities is a big challenge for most companies’ HR departments.

According to the China Talent-flow Survey Report published by RMG Selection, almost 70% of those surveyed have considered relocating to other cities if the job opportunity is good enough and 20% of them are willing to go to any cities including tier-two and three cities. This is obviously good news for companies in tier-two/three cities, but at the same time, it means that employers should look at employees’ concerns and expectations in relocating to different cities. Moving to a different city to work is never an easy process for anybody, especially for people from tier-one cities where the living standards are a lot higher. Considering the challenges from the perspective of employees (candidates) will help HR departments have a better understanding in order to solve problems and be able to attract talented candidates to the company. Below are some key issues and suggested solutions:

1. Future development: The very first concern that most candidates think about is future development in their career path. Most of them are working in their companies’ headquarters in Tier-one cities where they have already built up strong career networks which can be a great advantage for promotions or their future employment opportunities. While moving to a different city may mean they have to start everything over again, having a chance to foster a strong sense of the new community is not as easy.

Solution: HR departments should consider giving candidates a career plan that promises them potential opportunities to support their future development. The HR department should be able to provide candidates with an action plan with detailed steps to help employees acquire knowledge about their own ability, their career paths and opportunities. By giving them a broader view of their career goals, the company could possibly help candidates realise that relocating to a different city might be a boost for their career in the long-term. The company can also offer candidates the chance to join in social business events in their headquarter city, as well as the new city, so that employees can keep in touch with their current connections and also build up new networks in the new location. Another point that HR should mention to candidates in the first place is working in Tier-two and three cities could benefit employees in terms of career development, as an office in Dalian, Tianjin or Chengdu might be the heart of the corporation in the near future.

2. Family Concerns: This is one of the biggest issues for most employees when it comes to relocating. It is believed that the living standard and educational standards in Tier-one cities are better than those in Tier-two and three cities. The majority of employees want to let their children (family) remain in Tier-one cities in order to receive a better education. Moving to a different place to work also means being away from their wider family. It is especially hard for younger families when they already have kids (it might be easier for people who are still single). Moving away from home can be so tough for most people that they commonly feel lonely, isolated and overwhelmed. This would strongly influence their working spirit as well as their performance and productivity at work.

Solution: It is very important for HR departments to understand that employees in any organisation need motivation to keep them performing quality work. In this case, the company should not only consider general motivational strategies, but also the specific motivational appeals that focus on employees’ feelings toward the potential family concerns. It is recommended that HR department should offer employees a certain amount of transportation and cell phone allowance so that they can feel comfortable to visit and contact their family frequently. I would also recommend that the company gives employees who work in different cities an extra vacation or a trip for their family to visit them once a year. Family is a crucial factor as it is one of the basic desires that guides human behaviour and motivates our actions in general and the working efficiency in particular. Therefore, the only way to attract employees to a job that requires moving away is to facilitate and make it easier for them to communicate and feel closer to their family. This is also an easy way to be more competitive than other companies.

3. Salary: Working in tier-one cities often guarantees a higher salary than that in tier-two and three cities. Normally, for the same level in similar companies, the salary of employees in the tier-two cities takes up 70% of those who work in Tier one cites. However, that also means an employee from tier-one cities when relocate to tier-two, three cities might get a higher position. This is because different cities have different salary ranges, thus employees might hesitate in making the decision to relocate.

Solution: Most of the time, salary negotiation is a crucial process between HR department and candidates. Although it is lower in tier-two cities for the same level, HR could find excellent candidates and give them opportunities to be hired at higher levels. On one hand, the higher title is attractive; on the other, the salary budget is wider. The challenge for HR here is to find talented people with great potential. Secondly, everybody knows that the living costs in tier-two cities are lower than Beijing, Shanghai and Guangzhou. However, no one knows the exact details of how different. It will be very helpful if the HR department prepares a detailed description of how much money people can save from the lower cost of housing, telephone, traffic, meals and even commuting time. Sometimes, even if the salary is lower than before, the employee can still save more money in tier-two cities. Thirdly, it is more than just the salary it is the whole compensation package that a company can offer for employees moving from tier-one cities to work in tier-two and three cities. As mentioned above in the family concerns, other perks vary widely upon the significance of the position. The HR department can always prepare a comparison chart of pros and cons between the two regions in order to show employees how beneficial it is to work in tier-two and three cities.

By Robert Parkinson, CEO of RMG Selection.

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