China

Country starter pack
Business practicalities in China
101
For this reason, organisations need to invest in career
development structures and training with effective
succession planning. A healthy work-life balance is also
increasingly sought after by young managers in China, a
reality that is best considered when hiring.
Australian businesses may be surprised to learn that
Chinese companies, and increasingly foreign ones who
are localising their staff, often promote employees faster
than most companies operating outside the country. A
contributing factor for this is the lack of middle-aged
managers in China’s labour market as a result of the
Cultural Revolution, which led to an entire generation
having little education and skills only suitable for labourintensive
jobs. This means that Chinese managers are
generally short on experience and knowledge compared
with their international peers. The average age of a
Chinese chief executive is just over 47 years, almost 10
years younger than bosses in Europe and the US. This
also means that newly-promoted managers will often miss
out on the guidance of experienced senior management,
which can place additional pressure on them. Many
of these managers end up leaving, as higher salaried
jobs with less responsibility are easy to find elsewhere.
This is another reason why the development of skills in
managerial positions is crucial for businesses wanting to
retain staff.
Another issue facing Australian businesses wishing to expand
or establish operations in China is the limited supply of
experienced employees in rural and developing cities, and in
the interior regions of the country. Relocating managers to
these locations, which are likely far from family and where
standards of living are comparatively low, requires a robust
raft of incentives and benefits that could be in the form of
hefty salaries and promotion. It is suggested to target and
send managers originally from such locations as they may be
more willing to relocate to be closer to their families. Finally,
reverse transfers, or moving top performers from China
to developed markets for a short period to improve their
credentials or to undertake ‘cross training’, have become a
very popular retention and development measure.
Ultimately, the importance of ‘family’ should not be
underestimated when hiring staff in China. Australian
businesses will not be used to the sort of parental
involvement in the careers of children, particularly with
under-25s who may be working away from their home
town. For example, some Australian expatriate general
managers have reported receiving phones calls from
angry parents when their child may have been given a
performance management talk or is stressed by a work
deadline. Chinese managers and employees will also
resign if their family does not like the role they are in
or their job title or placement, or if their family believes
they could make more money elsewhere. It is, therefore,
important to consider how a business can ensure any
family concerns are addressed swiftly, including those
around work-life balance.
Tips to hiring,
developing and
retaining Chinese staff:
1. Family-focused benefits and perks
can help retain workers with ageing
parents or children.
2. Begin succession planning early.
Identify promising staff and
devote sufficient resources to their
development, while integrating them
into a global mobility program.
3. When selecting managers to send
to developing cities within China,
consider staff with local roots in those
regions or ones requesting to develop
their skills and go on secondment.
4. Training programmes must be
culturally sensitive for locals and
expatriates, as well as Chinese staff
returning from overseas.
5. Make sure there’s a clear path for
career development and advancement,
as well as sufficient opportunities.
Human resources and employment law
China introduced workplace laws more than 20 years
ago. The Labour Law of the People’s Republic of China of
1995, along with the subsequent Employment Contract
Law (2008) and other employment-related amendments
and rules that have been introduced over the past several
years, underpins employment laws applying to both
private and public sectors. Foreign-owned enterprises
and joint ventures are similarly covered.
The 2008 legislation essentially encourages employers to
enter into contracts with their employees either for nonfixed
or long terms, that set outline clearly regulations
for terminating employment. Amendments introduced in
2013 incorporated, among other things:
• Specific penalties for companies not having signed
employment contracts with employees