Hiring Practices to Consider When Founding a Business in China
Now you are reading this, we can determine that you enjoy a challenge. China is still an emerging market even though it is the second biggest economy in the world. In its case a changing society mixes with exploding economic development. In many ways China is learning from the mistakes of the west, but in many ways it is falling behind. As an entrepreneurial culture, it has rich potential, but only if you can navigate its complex market. One area of difficulty, is hiring new staff.
Hiring Expats Based in China
The number of foreign workers in China is growing as the economy continues to expand and transform. Between 2007 and 2012, despite the global economic crash, the number of foreign workers in the country grew 17% to 240,000. However, this is still dwarfed by the overall population of 1.5 billion. HSBC has ranked China as the no.1 destination for expatriate workers.
This does mean there is a growing talent pool in the country, but it should be noted that most will be spread across Shanghai and Beijing. This creates the first challenge – accessing talent. Secondly, the availability of Non-Chinese staff will rely upon the type of work required. The majority work in either upper level management and especially financial management roles or in English education.
Ideally you are looking for staff who know China well, can speak good Mandarin in the north or Cantonese in parts of the south, and who have existing business contacts or experience. These expat staff can be complemented with local Chinese hires with international experience. However, if you are looking for expats with specialist skills you may have a small pool from which to hire someone.
It is recommended that you layout as clearly as possible what kind of person you are looking for, what your job opening entails, and determine how to test both analytical and learning skills. There are many good practices for hiring staff in China which give them a better sense of who you are and allow you to determine if they are the right person or not. Do not be afraid to network, to use social media, and to spread the net widely to find the right expats for you.
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Anchor Yourselves in China for Local Talent
Regardless of your desired staff makeup, business model, and clientele, it is more important in China than any other country to know the local laws, customs, and people. Chinese business culture is extraordinarily complex with tight rules and regulations mixed with intense networking between business leaders and civil servants. This means the first step for a business looking to launch on the ground in China should hire a Chinese consulting firm to lay the groundwork and ensure your company is compliant. This is especially important if you intend to hire local staff.
A wholly owned foreign company can create organizational capability on the ground, but those wishing to do as little work on the ground in China itself can hire a Professional Employment Organization or PEO to create a Sales Office via Labor Dispatch business model. This creates all of the legal and administrative functions needed to begin sales and business in China without forcing the company on the ground to custom build it. This latter model does include a relative lack of flexibility and places huge reliance on the PEO being up to scratch.