November 11, 2010 by MSI
As more multinational companies
open offices in China, the need to identify, attract and hire, is becoming an
elevated challenge. Multinational corporations are aware of what lies ahead, but
they face additional obstacles such as lack of resources, financial budgets and
sophistication. The shortage of talent
is particularly heightened at the management level and competition
is intense for this elite group of employees.
The majority of candidates identified for management level
positions are Chinese Nationals. Chinese National candidates
that return after studying or working overseas are highly coveted compared to
locally developed talent and they are considered both more flexible and
culturally adaptive. Not surprisingly, multinational companies employ one third
of the workers from this talent pool.
As localization of talent evolves,
multinational corporations are likely to hire expatriate talent to fill in the
gaps. It is easier for recruiters to persuade foreign executives to accept an
assignment in China, as China continues significant growth in various
industries. It is an undeniable place for an expat to advance their career and is
the reason why China is one of the most popular destinations currently for
expatriates. Typically, they are looking for a growth opportunity and a career
path that a multinational corporation can offer. It is one of the biggest
considerations of expatriates when they are looking for and accepting an
opportunity – over money and benefits.
A multinational company that fills gaps with
expatriates will be more successful if expatriates are from an Asian country,
as “westerners” may have a more difficult time adapting to the culture. It is estimated
that 50 percent of the time, expatriates are gone within one year of an
assignment in China. Smooth transitions and
integration, as well as cultural training is beneficial in retaining the expatriate
for the entire length of their assignment.
High turnover compounds the “war on
talent” challenge in China. Management-level attrition rates in China are more
than 25 percent greater than the global average. And, replacing a
high-performing manager can cost 300 to 2,000 percent of that individual’s
salary. Multinational
corporations that are willing to develop long-term financial incentives for
executive employees make it more difficult for an executive to leave.
Ensuring that the best
talent is identified, hired and retained is dependent on an organization’s
investment in and planning and execution of their talent acquisition strategy. And,
for companies specifically looking at China, it will definitely require
building a qualified group of candidates while working within a very limited
talent pool.
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