GlobalAutoTV
Click to watch Graeme Maxton -
Click to watch Graeme Maxton -
global resources
Need an office somewhere in the world? Office suites, meeting rooms, virtual offices, network access



free downloads
GLOBAL: "The Trend Towards Global Tax Transparency" report

GLOBAL: "The Trend Towards Global Tax Transparency" report. 16-page report by Ernst & Young.

proceed to download
eJournals




back to index backGLOBALtalk August,  2006


China: Returnees To Take 25% of MNC Management Positions

Human resources (HR) consultancies predict that within the next two years, about a quarter of the managers working for multinationals in China will be Chinese returnees with experience in developed foreign markets. 

This is making management job packages more attractive to local executives than ever before. This localization trend has been driven by an overall expansion of foreign operations and an ongoing shortage of local leadership and managerial talent, according to a report by global HR services firm Hewitt Association.

Heidrick & Struggles, another leading HR company, says that the greatest demand is for Chinese returnees who have worked internationally and can relate their experiences to the needs of the local market. Multinationals and Chinese companies are looking for the same people, which is why they are willing to pay more for proven talent than they would in more mature markets. In some cases titles are also inflated for added prestige. 

It’s true, many of my overseas Chinese colleagues who have come back over the past several years were encouraging me to work here for more challenging jobs and promotion opportunities,” says Eric Wang, who spent seven years working for companies such as P&G and GE in the United States before returning home to China in 2005. He is now a regional marketing manager with world automotive coatings giant PPG.

Wang says he makes much less than he did in the United States, but he is satisfied with his current position and standard of living.

Jean Lin, head of Hewitt’s Compensation and Benefits Consulting Practice, says multinationals investing in China will continue to encounter leadership and management gaps in the local labour pool for at least the next decade. This is increasingly encouraging companies to keep costs down by reaching out to Chinese returnees.

Foreign companies have traditionally preferred to hire Western, Hong Kong, and Taiwanese executives for their mainland operations. Yet throughout the 1990s, Chinese mainlanders were up to 60 per cent cheaper than Western executives in foreign-funded firms.

It also soon became clear that even experienced foreign executives couldn’t overcome the different cultural environment and their poor knowledge of the local market,” says Lin.

Chinese returnees know both the local and international markets, however. Steve Mullinjer, managing partner with Heidrick & Struggles China, says Chinese returnee executives need to translate a global corporate agenda into an effective China strategy” if they hope to succeed.

They are in a position to educate and reshape the frequently inaccurate assumptions that many Western executives may have of China, and create a frame of reference through which Chinese Government officials can better understand the concerns of multinationals.

The ability to effectively align different expectations in a commercially viable way is one of the most elusive leadership skills in the China market today,” says Mullinjer. 

Chinese natives simply possess greater local emotional intelligence (EQ), a behavioural quality that helps them to articulate, understand, and use informal networks to establish credibility with a diverse international peer group. This is useful for solving problems and gaining commitments on a range of business issues.

This is a critical skill set for companies that have evolved into complex multi-entity businesses in China and have shifted to matrix management structures,” says Mullinjer.

Salaries for Chinese executive continue to rise, with Hewitt’s research showing returnees in director positions earning the highest average increases at 5.7 per cent year-on-year. Premiums such as recreational allowances, however, have dropped, constituting only 9.9 per cent of the total cash payout in 2005, compared to 11.5 per cent in 2004. 

First-tier cities such as Shanghai and Beijing are no longer considered hardship postings,” comments Lin.

Base pay and bonus increases, however, are narrowing the income gap between Chinese returnees and other expatriates. But money is not the most important thing, because there will always be companies willing to pay more, says Thomas Wetherell, managing director for Henkel China Detergents & Cosmetics.

The trick to retaining top talent is to create a family feeling and provide creative challenges and ongoing education,” says Wetherell. Wang agrees, saying he wants to feel he is part of something important. I want to be taken seriously and given a voice in company, even if it is very small. I feel confident I am moving forward,” he says.

Mullinjer says compensation fluctuates in accordance with market supply and demand.

Experienced Chinese returnees are hot, so companies have to pay more. When these local executives start to age, the trend might reverse,” says the veteran consultant.

Local executive talent will eventually take the lead, however, providing that the Chinese market continues to integrate with the global economy.

Source: China DailyGAI


previous page

go top
search our site


Loading

GLOBALtalk

Other articles from the same issue (August,  2006).

Managing, Developing, and Retaining Key Talent in China
play read on

Toyota's success is stretching its staff
play read on

New Kids on the Block: Tax Implications for Expatriates in the East European EU
play read on

Americans and Germans: “Do What It Takes” vs. “Make No Mistakes”
play read on

Vacation Deprivation Among American Workers is at an All Time High
play read on

Relocating to the United States? Get Ready to Rebuild Your Credit
play read on

Latin America: Women on the Verge
play read on

Relocating to Latin America
play read on

Beijing: Most expensive mainland city to live in
play read on

Japan: LDP Eyes Extending Foreigners' Work Visas to Five Years
play read on

India: Pension regulatory law likely by August
play read on

Background Checking Goes Global
play read on

Shanghai: Expat Influence in a World-Class City
play read on

China: Returnees To Take 25% of MNC Management Positions
play read on

Hong Kong: Spouses of Expatriates in Hong Kong now Permitted to Work Again
play read on

Moscow replaces Tokyo as world’s most expensive city
play read on

Pension portability directive “problematic”
play read on

Europe: 4 Hours a Day, 3 Days a Week
play read on

Are you Linguistically Legal for European Business?
play read on

Globalization: foreign postings on the increase
play read on

USCIS Reaches H-1B Cap
play read on

Reward Practices Becoming More Critical to Attract Workers in Tight Job Market
play read on

U.S. tech companies cry out for foreign talent
play read on

East Meets West, With An Argentine Twist: More Argentines Are Embracing Chinese Language and Culture
play read on

Business Practices in Mexico
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120