Recruit and Retain Chinese Staff on Point

When tremendous amounts of articles focused on how to start a business in China, we should first consider how to recruit staffs that suit your company. Thus Talent Spot gives out 5 tips to help you successfully recruit the one you want, making sure you are building for a successful future.

1. Don't be Penny Wise, Pound Foolish

Many Western companies have a misguided notion regarding Chinese labor: it is cheap. Expecting to save costs on salaries while recruiting Chinese staff that is perfectly attuned with Western company standards is unrealistic. Hiring cheap Chinese staff is often ineffective and unreliable. To begin with, Chinese labor is not as cheap as Western companies might imagine. An employer's total expenses are usually double the net salary.

The net salary for well-educated and trained Chinese staff can be as high as for Western professionals. This is to be expected when that one ideal candidate for a job has received Western education, lived abroad for a few years, and gained experience with Western firms in or outside China. In China, it is important to note that everything is possible, but nothing is easy. Having a good local team that can help make challenges easier is not something a company should cut expenses on. On the contrary, it is also important to remember that 'expensive' does not equal 'quality' per se.

2. Don't Marry Your First Love

Would I make this decision in my home country? This is a very important question to ask yourself. Many Western firms start by partnering with the first Chinese business partner they meet. Often times, the partnership may be more beneficial for the Chinese business than their Western counterpart. Proper research and a background check are of utmost importance in recruiting the management team for your firm in China. Even better, multiple candidates should be compared and interviewed; because one option to choose from is no option at all.

3. Trust your Chinese counterparts

In contrast to the previous tip, many Western companies are reluctant to trust the Chinese management. Good Chinese staff is an invaluable asset to a local management team. A management team with only Western staff is unlikely to make connections with local Chinese people, whether it's the workers, clients, or suppliers.

Chinese culture is vastly different to Western culture. Many Westerners who come to China are often illiterate to the Chinese language. This is far too often the case and can lead to misunderstandings between Western management and local Chinese staff. Having Chinese staff in management positions helps resolve issues stemming from cultural and language differences, and can serve to prevent any future issues. This makes it crucial to have eyes on the ground when hiring Chinese managers. 1421 offers such service.

4. Hiring opportunities

It's important to know how to actually hire your staff. To test the waters, it might sound nice to pay your staff from a company outside of China. This is not without liability, however. According to Chinese labor law, the employer is liable to the employee, even when they are outside of China. Being paid this way also gives the impression that the employer is not really invested in the China-side of their business. Since social insurance and taxes are not paid out, employees are at a disadvantage if they want to prove they have been working in a city other than the one they were born in. This will impact their eventuality to buy a home or send their children to school in a new district. The employee might be happy with a non-taxed salary, but the employer is held liable for tax evasion.

To avoid these risks, a company can use payroll services when testing the waters in the Chinese market. If the business climate seems beneficial for the firm, a Wholly Oned Foreign Enterprise (WFOE) can be set up prior, during, or after making use of payroll services. With a WFOE, a Western firm has their own business entity in China, which can have great influence on employee loyalty.

5. Properly manage your staff

Lastly, it is imperative to work close together with the local Chinese staff. This can be done in different ways to make sure the objectives of the Chinese team are aligned with that of the company. A good onboarding program is very important. Clear KPI's are a great way to make sure the Chinese team is progressing at the right pace and in the right direction. Regular visits from headquarters are useful as well. This helps build a lasting and trusting relationship, which is an important aspect of Chinese culture.