HR Consultant (lynnsoconnor@hotmail.com) and Business Researcher Jo Wilson in Hong Kong discuss some of the implications for foreign banks in finding key staff in China.
Across the world, bank customers are becoming more discerning about who looks after their financial interests. This is particularly true in China, where globalisation and increased freedom of movement have given rise to growing expectations of international standards of service. Matching such expectations, whilst keeping pace with rapidly accelerating demand in a competitive market - a market that often operates a changing or uncertain regulatory regime - has given rise to significant challenges for banks. In this environment, staffing is a critical element of business success.
In terms of recruitment, foreign banks in China face two major priorities - how to find high potential local staff to act as the customer interface, and how to recruit senior management talent in order to localise key roles.
Having good front-line staff is crucial to successful customer service operations. It is only recently, however, that China has started to develop a service culture. Less than 10 years ago, customers in provincial capitals might have found themselves being turned away during banking hours as staff held an impromptu 'meeting' (or even washed each other's hair in plastic basins behind the counter!) Though China's banking sector has come a long way since then, experienced service-orientated personnel are still hard to find.
It is at the management level that the repercussions of China's recent history are perhaps most strongly felt. China's relative closure to the outside world and years of turmoil surrounding the Cultural Revolution denied many would-be managers the education or experience required for today's senior positions. Management education is a relatively new concept in mainland China, with indigenous universities only producing their first batch of MBA graduates in the early 90s. Though a steady stream of such graduates is now being produced, many qualifying from top-flight Western universities, there is still a shortfall of talent at the executive level.
High demand for suitably qualified individuals has inevitably led to increased competition for staff. As a result, companies in cities such as Shanghai and Shenzhen are already experiencing a steady increase in salary overheads, whilst for many organisations, retention has become a major issue. Given the buoyancy of the job market and the operational realities of doing business in China, what can banks do to attract key players?
Recruitment in China
The concept of "guanxi" permeates all aspects of life in China. This loosely translates as 'relationships,' but also has the sense of bonding through shared experience. It is important as it affects the ability to be accepted by others and, therefore, to get things done. An understanding of "guanxi" is necessary to recruitment decisions, both in terms of being able to build and motivate your team, and to interface with government departments, customers or business partners. Failure to give sufficient weight to this element can significantly limit the effectiveness of doing business in China.
Traditional Western recruitment methods can prove ineffective: placing advertisements in the newspaper, or recruiting via the Internet, is likely to generate an unmanageable volume of responses. There is no national equivalent of 'The Guardian' or 'The Times' in which an advertisement can be targeted nationally at a particular audience.
Using agencies or headhunters can also be less effective in China. Such service providers are relatively new to the country, tend to be found only in major cities and can often only source from the local area. Recently, the recruitment industry has come under the scrutiny of the authorities and has been subject to changing legislation. For example, some jurisdictions have outlawed headhunting from state-operated businesses. Because of this, some of the world's leading recruitment companies do not yet operate in mainland China, whilst others offer a limited range of services.
Recruiters in China must, therefore, look to alternative methods for reaching their target audience. Some tips include:
- Identify local universities as sources of future staff. Competition for graduates is fierce, so a strong graduate employee proposition is necessary
- Creatively seek out ways to recruit overseas-educated Chinese by approaching world-wide campuses to secure graduates prior to graduation
- For more senior recruitment, tap into informal networks, such as foreign chambers of commerce in China, which are gradually becoming infiltrated by highly educated locals.
In specialist areas, there will still be a need for expatriate workers in the short-term. These should be recruited with the knowledge that part of their role is to transfer their skills to resident managers and, therefore, localise the position.
A major issue for companies recruiting in China is the verification of qualifications. It is regularly reported that you can buy almost any qualification on the street in Shenzhen. The recruitment process should, therefore, include skills testing and thorough reference checks.
In the wake of WTO, competition for talent will continue to be fierce in China, particularly between foreign companies and the more progressive, successful domestic corporations. As companies fill key positions, retention strategies start to take precedence over recruitment as organisations try to keep hold of the high potential executives that they have taken so much time to recruit and develop.