Companies are becoming more and more tempted by the Chinese labor market. Although cheap labor and consequently low production costs are always nice to have, it can be extremely laborious to understand and adapt to the Chinese culture and professional world. This constitutes a real challenge for any company planning a delocalization in China and should be carefully planned.
Full employment, nothing more, nothing less
Unlike France, China can boast about having full employment. Therefore, Chinese employees have more choice than any other employees and can afford to be picky. Also, they will never hesitate to leave their job if they feel that they can get a better one somewhere else. Therefore, companies in China have a high employee turnover rate. According to a survey conducted by BlessingWhite Research in 2011, a manager in Shanghai changes his job every 18 months or so on average. Loyalty to a company is a foreign concept in China.
Human resource management versus turnover
Human resource departments in China face the same challenges as the ones in France when it comes to fighting turnover. This is why there are talent management strategies such as fast promotion of high-potential employees, even if they usually suffer from a lack of experience. Therefore, it is not surprising to see fresh graduates at a senior position in Chinese companies.
Also, human resources rely a lot on corporate culture, by working on the relationship employees shared with their manager. The relationship between an employee and his manager is almost sacred, and tightened by an emotional bond.
Human resources also count a lot on corporate branding. Even if China has a population of almost 1.357 billion people, companies need to look good to attract high potential individuals and young talents.
Proactive recruiting and building a talent pipeline seem to be a viable alternative to ensure that a company always gets the most qualified people. Some French companies located in China have created productive partnerships with universities to attract potential Chinese candidates who have studied in France.
The salary disequilibrium
So far this article has depicted an extremely idealistic picture of the Chinese labor market. However, in a context where price-based competition is the key to a company’s success, wages were never meant to increase company’s attractiveness, or to ensure someone’s loyalty to their company. Cutting costs, and therefore salaries are almost as essential as increasing the turnover.
A good human ressource employee in China is therefore someone who can be relatively polyvalent and able to juggle between psychology, human resource management and employment law while bearing in mind the different costs.
Sources : archibat.com, ambafrance-cn.org and slideshare.net/BruceGAO