How RPO Impacts Talent Practices in China

Lessons from an Australian RPO Executive Operating in China

While working in China, I have been asked many times what I see as being the main differences between recruiting in Australia where I am from, versus in China. Basically, there are many, and I’m still finding differences each day! While the main process steps remain the same, the key variations are not surprisingly the culture, but also where China is at as a country, an economy and its evolution of producing and managing talent. First and foremost, China is still developing; so recruitment and HR practices are still evolving too. RPO solutions therefore can partner with businesses and HR teams to help shape and progress these talent practices, to ensure businesses engage and retain the talent they need to keep up with China’s growth. Below are some of my key learnings and observations in how RPO is positioned to do this.

I think we are all guilty, myself included, of picking up processes that are tried and tested in another developed country and then attempting to implement them in China. It doesn’t work. One of the key lessons I learnt early on is to localise, localise, localise. Recruitment teams within China are very eager to learn the best practices of RPO Management including sourcing and selecting talent; however they also know what will and won’t work in China. Everything has to be localised.

Selection process objectivity. Internal referrals are high in China; there is a strong culture of recruiters seeking referrals and employees referring people. You don’t actually have to even know them, just meet a person somewhere, exchange name cards and boom – referral made. The average referral rate is between 40-60% in China. While having a high number of referrals can be a great thing and is a really important sourcing channel, our challenge as RPO specialists is making sure they go through a consistent process and to influence managers to show objectivity when choosing their preferred candidate.

Brand is currency! As we know, China loves their brands. So employment branding and image is everything here. However the concept of an EVP is still relatively new. Many big MNCs have their headquarters in Shanghai now, and there is also more competition from local companies for talent. The perception of a company’s brand, their positioning in the global market and reputation as an employer of choice is therefore critical. While China is a massive country, word of mouth still spreads fast! RPO has a great opportunity here to work with clients to develop strong, localised value propositions for their current and potential employees. People in China love to work for a company they makes them proud.

‘A whole new world’. The speed of growth in China means high vacancy and turnover rates. Even though China has a massive population, quality is still hard to come by and speed can’t come at the sacrifice of quality. While hiring turnaround times need to be fast to keep up with the market here, as RPO specialists we also need to push back and manage expectations in regards to timeframes, ensuring we get the right person. Due to the respect of hierarchy in China this can at times be culturally sensitive, so the role of an RPO Leader is to build the team’s confidence to do this and show it’s a way for them to demonstrate their worth and value, by ensuring we hire quality people. Stakeholder management and assertiveness are therefore vital skills for RPO specialists in China.

HR now has a seat at the table. Until the last few years, Human Resources within China focused heavily on recruitment and associated administrative functions. A greater need existed then to ‘buy’ talent. Fast forward to now, and the focus has shifted to developing and managing internal talent. The demands on talent are increasing and China businesses are expecting their new employees to work in complex, global organisations. Therefore HR Directors need to be both strategic and commercial, and HR Managers are now moving into true Business Partner roles. This means that Recruitment too is now seen as a specialist area requiring specialist skills.

Build or Buy talent? Due to increasing people demands, as well as increasing wages costs in China, there is a shift to promote more internally and ‘build’ rather than ‘buy’ talent. HR now must strategically help their businesses to plan for future talent needs. Some capability however doesn’t yet exist in China, so the requirement for RPO solutions to develop specialist sourcing strategies to ‘buy’ key talent is still required.

Local autonomy required for talent management. For MNCs operating in China, local HR and Talent teams must retain some local autonomy for talent management. The workforce in China is much younger than most Western countries and also the years of experience are lower. With many frameworks and development programs designed and rolled out from global headquarters, local flexibility is needed. For example, employees within China may not yet have developed the same level of competency in some areas that their global colleagues possess; therefore talent programs need to be localised. RPO Specialists can assist HR teams here by providing local market data.

Global mobility programs remain a challenge. Identifying and developing China talent for global roles can be challenge. Family is fundamental in China; therefore family ties can make it difficult for Chinese workers to be mobile. RPO teams can work with the business to identify stretch assignments and secondments, which can be effective ways of giving China talent the global exposure they need, while allowing them to still honour their long-term family commitments.

Competition for talent. A large portion of China’s economic growth has come from the successful rise of locally owned companies, which now are beginning to attract top talent. Working for a MNC has always been viewed as prestigious, however now senior employees at local companies can get direct exposure to CEOs and Executive teams. To do the same in an MNC, they would need to move internationally. More than ever, RPO Specialists need to work with businesses to ensure their EVP and employment brand is current and competitive in the market.

Support from the C-suite. In China, people respect authority and will follow the ‘Boss’. This means when the CEO and senior management team get behind recruitment and talent strategies, it works. Buy-in from the C-level is therefore critical to ensure a successful RPO solution and recruitment outcome for the client.

Read our case study on RPO Management for entering the Chinese market.

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