1 March 2016
HR in 2016: What You Need to Know
The Salary Reality
China is no longer a source of cheap labour, as it was in previous decades: double digit salary growth rates over the last ten years were commonplace, especially in urban centres. But the economy is slowing down, making this kind of growth no longer sustainable. Nonetheless, Chinese employees are addicted to these high increases they received in the last few years. The impact of this will be twofold: on the one hand, companies will have to figure out innovative ways to retain their employees while also managing expectations. This can include measures such as mentioned in the previous article. On the other hand, labour is becoming more expensive, placing more emphasis on efficiency and productivity. This could lead to a more widespread introduction of robots in manufacturing, especially as China is moving up the value chain, leading to a change in overall skill requirements.
The Importance of Going Digital
With 670 million internet users, digital recruiting strategies are essential in China. Here are a few helpful tips to follow: 1) Know your channels! You can’t maximise your reach using Facebook. Instead, use local platforms, such as WeChat and Weibo to post your jobs. 2) Be present! Keep your profiles up-to-date and be reachable to make your company more attractive and approachable. 3) Analyse! These days, there are a number of tools available to track your campaigns so you can measure their successes and failures. 4) Set expectations! With the amount of people you will reach by posting online, the right one will be a diamond in the rough. 5) Understand trends! Hashtags? WeChat stickers? Mobile? The online world changes fast and so should you.
The Why of Generation Y
Born in the 80s and 90s, China’s Generation Y consists of between 250 - 300 million people, or 3 - 4 times the entire population of Germany! Compared to their predecessors, this internet-savvy group of consumerism-driven “20 to 30 somethings” has a different outlook on life and work. With hard-working parents who experienced the opening-up of China and its rapid economic expansion in the context of the one child policy, Generation Y is privileged enough to have received higher education, relative stability, and global exposure. As a result, they place more emphasis on their work-life balance and generally have a more entrepreneurial spirit. They want to travel, experience, and impress. Employers should keep this in mind when hiring GenYers, by, for example, offering work travel, cutting edge technology, and flexible working arrangements.
The ‘Local Plus’
The classic ‘Expat’ in China is slowly becoming extinct for various reasons: 1) China is now an alluring market, promising success and adventure for young Western professionals wanting to escape high unemployment rates and lack of opportunity back home. Comprehensive packages that offer housing, drivers, and more are no longer necessary for attracting foreign talent. 2) In addition, competition from local talent is on the rise: with more disposable income, a rapidly increasing number of Chinese choose to study abroad where they pick up foreign languages and ways of thinking. This, coupled with their existing knowledge of the home market, make Chinese employees desirable for foreign and local companies alike. 3) Lastly, it has become commonplace for companies to engage in knowledge transfer to build up the competencies of their local team and integrate their global operations. This includes sending their Chinese staff abroad and engaging in specific training programs. As a result, there is not much room for foreign employees without a very specific skill set.
The Termination Trap
Employees in China are highly protected by the country’s Labour Laws. There are only a limited number of situations in which a company can legally dismiss an employee, including non-work related medical problems, incompetence after having received training, and a change in job description after their contract has expired. And very few that allow immediate termination, including corruption, being employed by another company, or engaging in criminal activity. As this is the case, we advise to specify goals and responsibilities in as much details as possible in the employment contract. In addition, having a solid Employee Handbook is essential to avoid any messy disputes.