Alan Pang of Aon Hewitt recently told the Wall Street Journal’s Kathy Chu about why China’s job seekers are increasingly preferring domestic Chinese employers over Western MNCs:
According to Alan, macro economic trends such as inflation, manufacturers and western MNCs looking elsewhere for cheap labor and the need for Chinese companies to hire more sophisticated talents as they focus on serving the local market are helping to fuel a shift. But many local and western companies alike are backed into a corner when it comes to finding qualified local talent in important areas like R&D, marketing and sales.
Alan also noted a pay discrepancy between those at the top and bottom for Chinese and western MNCs. For example: He cited a study of the high tech sector where it was found that the difference between the highest paid and lowest paid position within a job family (e.g. the Chief Engineer’s salary verses a junior engineer’s salary) was 6 to 1 at a Chinese firm, but 9 to 1 at a western MNC.
In addition, Alan talked about western expatriate executives going to work for domestic Chinese companies and how that will impact the way western MNCs compete with Chinese companies for customers/clients and talent – both at home and abroad. Huawei Technologies, for example, already as a big army of foreign advisors and has apparently found that native Americans working at the mid to senior executive levels tend to work harder than locals (probably due to the lousy American economy or lack of job opportunities at home). Moreover, Chinese companies like Huawei Technologies, Lenovo, the Alibaba Group etc. aren’t just Chinese companies any more as they are global firms who are operating just about everywhere.
However, Westerner expatriates working for Chinese employers are still going to be in for a culture shock when it comes to how a position is being made, the way employees collaborate, how performance is evaluated and how business strategy is done.
So who will win China’s war for talent? Alan believes its ultimately a win win situation helping to create a new cultural combination where Chinese firms, who know the local market and have already learned that you need to put the client or customer first, to get to the next level that foreign MNCs are at e.g. the level where you need to balance the competing needs of clients/customers and other key stakeholders like shareholders, executives and line employees. This would be the type of knowledge and experience that western executives can bring to the table if they go to work at Chinese companies.