Hiring in China? Pro Tips to Save You Time, Money and Legal Issues!
First off, I’d like to extend a warm welcome to everyone joining me for my ‘Hiring in China’ series.
This series of 8 blog posts is designed to offer both a general framework for how to structure your dealings with the employees in China (both Chinese and Foreign) as well as provide practical tools, tips and best practices for your day-to-day interactions with staff…
What the reader can expect to gain from the series
We will cover how to build a stable relationship, how to structuring effective labor contracts and even how to create mechanisms for monitoring the relationship and monitoring compliance with the labor contracts.
My goal in writing this material is to offer an affordable and effective way to protect the foreign employer while being fair to the employees. This is not a guide on how to outsmart your employees.
How the series is organized
Blog #1: Hiring in China? Pro Tips to Save You Time, Money and Legal Issues!
Blog #2: How to Legally Fire Staff in China and Prevent Costly Lawsuits
Blog #3: What Foreign Manufacturers Need to Know About China’s Mandatory Benefits
Blog #4: How to Handle Compensation Claims in China
Blog #5: Attn. Manufacturers! Work Visas for Foreign Staff in China Explained
Blog #6: China Labor Laws & Enforcement: What Really Happens During a Labor Dispute
Blog #7: Forget These HR Best Practices at Your Factory’s Peril
Blog #8: China Compensation Benchmark: A Survey of Salary, Taxes & Benefits (Shenzhen/GuangDong/Hunan)
The following blog is based on excerpts from the whitepaper entitled “Foreign Manufacturer’s Ultimate Guide to Hiring, Training, Managing & Firing Staff in China” which can be downloaded in its entirety right here!
Recruitment (Blue Collar)
Finding Staff in China
Most of the points in this section are applicable to the recruitment of both factory and office workers, but there are some special considerations when recruiting factory staff.
Gone are the days that I remember so fondly, when we just hung a hand-written “We’re interviewing” sign on the factory front gate and there would be a long line of highly qualified candidates willing to start work on the factory floor for minimum wage.
At the risk of oversimplifying the situation, the reasons it’s harder to find factory labor on short notice now than 10 years ago is two-fold:
- Thanks to the one child policy, there just aren’t as many 20 year olds looking for a job.
- The rural interior of China is developing rapidly. Workers finally have job opportunities back home. So there is less of a need to travel 1000 miles to a factory on the coast and only come home to see the kids at Chinese New Year.
Finding “good” (meaning affordable, stable & loyal) office staff has always been a constant challenge in China. But these days, finding “good” factory staff is a real challenge too.
If your labor force is blue collar, you may want to apply the same tips and strategies found in the whitepaper for hiring/retaining white collar labor to the blue collar workers in your shop. Additionally, you may also want to consider the following special tactics for recruiting blue collar labor:
- Give a bonus for existing staff who introduce new staff. But have clear rules about hiring family members and beware of cliques on the factory floor.
- Send a recruitment team to the interior and offer special support with the transportation to the new job site.
- Find ways to make it easy for staff to get back home for Chinese new year. For example, staggering production so staff can leave early/late and come back early/late.
- Keep an eye out for factories closing near your factory. This is a great place to find new staff!
- Build an internship/work-study program with local trade associations and colleges to train and recruit new staff.
- Pay above minimum wage and offer meaningful benefits.
Recruitment (White Collar)
Tips for finding & interviewing good candidates
I love the saying “if you don’t know what you are looking for, every road will take you there”. In this case it means that if you don’t have a well-defined description of the candidate you are looking for, you will most likely end up hiring somebody that isn’t the perfect fit for the job.
The challenge isn’t finding a candidate, the challenge is finding the right candidate from the tsunami of resumes you will receive. So the first step is to build a description of the ideal candidate covering the core details like:
Pick titles that are accurate based on local standards
In the West, because the typical office has a lot less people than in China, it is common for staff to have multiple titles and perform multiple roles. We don’t put a lot of stress on the job titles. For example, the CEO of a small company may be doing the same jobs as maintenance staff at a large company! We tend to throw around the terms “manager, director, supervisor” indiscriminately.
It’s very much the opposite in China. Staff take their job titles very seriously. Because even small companies in China can have 1000 employee, the term “manager” really means something. When recruiting in China, be sure you are using the right job title. When in doubt, use a title a rank or 2 lower than you would back home.
The job description is very important, especially when you consider that foreign employers and local staff may have different perceptions of what a given job title entails. Be specific. Is this a desk job or do you expect them on the factory floor managing things? Is there a lot of travel involved?
It’s in your best interest to let candidates know upfront how many people they will manage and to whom do they report? This is especially important if there are international teams on the project.
In the West we would assume that if somebody makes it to the top rungs of the corporate ladder, they would know how to lead a team. Not always the case in China. I have come across some great candidates (on paper) for top positions in my company who were actually terrible at managing teams. The reason is that they always had an assistant or a Vice GM to handle communications and they focused on strategy from behind a desk.
In some countries is may be considered age discrimination to state a target age for the candidates. But in China it is quite common. So go ahead and state it in your job advert and use it as a tool for narrowing down the pool.
When asking about experience, set targets for both the # of years and type of experience.
Be very specific. For example, “Engineer” is not good enough. A garbage man could be considered a “Sanitation Engineer”. So it would be better to say “Looking for a Mechanical Engineer who has at least 5 years’ experience in a toy factory working with CNC machines.”
I’m usually in a rush to hire new staff, so for me, time is of the essence and stating the target salary helps cut to the chase. But many recruiters are hesitant to state their salary targets on the job description, instead preferring that the candidates list their expected salary when they apply. Unless you are a professional recruiter in China and really understand the labor market it may be hard for you to judge if the expected salary as listed by the applicant is on par with their experience.
This can lead to a lot of headaches because some candidates will lowball their expected salaries in order to get the job and get through the trial period. Then they ask for big raise. If the raise is not given, then become deadweight around the office. But because they passed the trial period it’s hard to fire them due to the severance pay issues in China. I go so far as the put the salary caps for years 1, 2 & 3 in the job advert and state them during the interview, so the candidate can’t say later “oh, I didn’t know there wouldn’t be a 15% raise after 18 months.”
Stating the target salary in the job advert avoids those issues. And you can always adjust the target salary if you aren’t getting the type of candidates you desire.
Unless you are looking for a very unique skill set, most likely your search can remain location. And if you make it a nation-wide search you will be overwhelmed with too many resumes and waste a lot of money/time setting up face to face interviews. China has 300 cities with populations of over 1 million people. So pretty much anywhere you go in developed China, there is a large pool of local candidates in that same province, same city and perhaps even same neighborhood!
So be clear about the location of the job on your advert. Don’t state “City/Province”. State “Address, District, City, Province.” The added advantage for your recruitment process is that candidates will often be willing to work for a slightly lower wage target if they can stay close to their family. So try to fill the job locally when possible.
That concludes post no. 1 out of 8 in my ‘hiring in China’ series. Stay tuned for the next post in the series to find out how to legally fire staff in China and prevent costly lawsuits!
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