Engager 1 - Culture: In order to engage Generation Y it is critical to nurture the bond between an individual employee and the co-workers, the supervisors and the organization at large. These bonds are personal in nature and only in their collective becoming a sticky organizational culture. Despite their desire for strong ties to the people in the work place, Generation Y is competitive and has a sense for achievement. However, this has a more complex manifestation than Generation X, expecting to consider more performance parameters than just individual quantitative targets.  Generation Y emphasizes work-life balance and appreciates employers who provide the necessary flexibility to correspond to personal needs, e.g. working times, working location or recreation.  

Engager 2 – Job Mix: Generation Y easily gets bored by singular activities. Asking Generation Y in China about what they expect from their work reveals universal concepts such as “communication” to be important rather than specific activities. They expect stretch assignments, even if they might not yet be technically equipped for them, if necessary with intensive guidance of the supervisor.

Engager 3 – Leadership: Despite the fact that Generation Y is more self-confident than previous generations, they often have no clear targets concerning what type of specific job content they are seeking or in which specific functional role they see themselves now or in the near future. They have a better understanding of how the work needs to feel. To find the right career path and job content they expect mentorship, guidance and leadership from their supervisors. Generation Y has an ambivalent relationship with authority. On the one hand Generation Y requires clear leadership, structures, and guidelines. On the other hand, they expect leaders to facilitate two-way communication and to be open to criticism.

In conclusion, managing Generation Y is often a challenge for Chinese as well as for foreign managers. However, given the importance of Generation Y as the single most important asset to the Chinese economy for at least the next 15 years to come, it is imperative that companies and its managers adapt their talent management approach to meet the demands of Generation Y. The Attractors and Engagers provide a proposal of how to take first steps into a suitable working environment, and how to effectively recruit and retain Generation Y.

Attractors are visible differentiators in the labor market helping to establish first points of attraction for employers in the perception of candidates. Engagers are retention drivers, which convince Generation Y to invest their time and effort into the organization. It should be noted, that, unless Attractors are effectively confirmed by the experience of a ‘sticky’ work environment, facilitated by Engagers, the effect is short-term and only valuable in capturing the attention during the hiring process as well as in the early employment stage. Therefore, Attractors are hygiene factors, which in isolation do not provide the long-term satisfaction needed for sustainable retention, but are swiftly taken for granted. Engagers are summarized in Table 5 as a blend of corporate culture, the job mix, and leadership.

Attractor - Differentiated and value oriented employer branding:

While an increasing scarcity of qualified professionals is providing candidates a broader set of career options to choose from, Employer Branding enables companies in China to differentiate themselves vis-à-vis the talent acquisition competition. Messages signaled through a company’s employer brand towards Generation Y in China should be in line with the statements in Table 4 in order to be effective.

Attractor – Holistic Compensation Models:

Generation Y is continuously benchmarking their status-quo of compensation against the market, not only within China but also in an international context. Compensation is considered a reflection of the employer’s commitment towards the employee. Clear and continuous compensation development throughout the employment lifetime is considered more important than starting salaries.  Therefore, compensation models should incorporate clear salary development guidelines, generous annual leave entitlement, pension, life and medical insurance, and housing fund, which do not only meet legal obligations but are benchmarked against the market.

Attractor – Recruitment process:

Generation Y is knowledgeable, well prepared and critical when entering the recruitment process. Therefore the involvement of hiring managers as ‘Sales Persons’ of the organization in the recruitment process is an effective tool to gain their attention. Furthermore it is important to show clear structures and to reduce any ambiguity related to the company or work environment. Finally, revealing future perspectives within the company linking professional development with learning opportunities and compensation is imperative to maintain high levels of interest.

1. Hard-to-fill positions:

Rapid economic growth, insufficient capacity of the Chinese education system and high demand for skilled labor have resulted in a shortfall in supply of professionals who possess the following skill set: multiple language ability, in-depth technical and industry know-how, international exposure, and familiarity with global best practices. In particular, the strong desire of professionals to move into commercial roles, such as sales and purchasing, has created a shortage of technical professionals.



2. High personnel turn-over and recruitment uncertainty:

Professionals move quickly between jobs, particularly in first-tier cities such as Shanghai, Beijing and Guangzhou. Due to this common job-hopping trend coupled with high drop-out rates during the on-boarding process, continuous recruitment planning is a challenge.

3. Low mobility of staff:

There is a general reluctance for professionals to relocate within China or to accept a longer commute to the work place. Therefore, location is a particularly important factor to take into consideration when choosing to establish a branch location and attracting potential employees.

4. Misinterpretation of candidate credentials, profiles and presentations:

Personality characteristics, such as being straight-forward, which might be favorable in the Western hemisphere, or language skills, such as the ability to communicate fluently in English, are often misinterpreted or over-emphasized in the search for suitable candidates. Furthermore, academic credentials are often over-valued. The Chinese education system still emphasizes learning facts by heart rather than developing independent thinking and problem solving skills. Additionally, the frequent job changes of candidates are often incorrectly interpreted by companies as a sign of immaturity. From the perspective of the candidate, changing jobs has been considered for many years to be a means to rapidly gain experience and to speed-up professional growth.

5. CV and credentials fraud:

Falsifying credentials is a prevalent problem which recruiters face in China. Particularly when CVs are provided by applicants in other languages than Chinese, these ‘translation mistakes’ are a convenient  means to ‘upgrade’ titles or certificates. Accordingly the employment risk is amplified and appropriate actions have to be taken to minimize these risks.

6. Lacking calibration of title and salary:

Job titles have a different prestige status than in other cultures. Particularly being a ‘Manager’ or to work in a commercial function are linked to social status. Furthermore, finding the right salary level linked to a job and its title is a challenge. This problem is amplified by the lack of detailed market data and unrealistic expectations colored by candidates’ perception of foreign salary levels. Companies tend to over-emphasize the starting salary, however a clear growth perspective with respect to salary development is often more important to candidates than the starting salary per se.

Continue:
> Candidate profiling
> Employee types
> Candidate identification
> Headhunting
> Candidate selection
> On-boarding process

The profiling stage is a critical planning phase in the recruitment process to develop a resource-efficient, fast and effective approach to ensure the suitability of a new hire within an organization. The cultural and experience gaps between Chinese and foreign managers in companies operating in China often results in conflicting assumptions with  regards to job content and candidate qualification criteria during the hiring process. A well-executed profiling exercise will serve to bridge these gaps to minimize misunderstandings and avoid hiring unqualified employees. Throughout the profiling stage the HR representative should maintain close contact with the hiring manager, as strong communication is necessary when specifying the company needs, job content, job title, candidate profile and compensation details. Especially when the HR manager and hiring manager have different cultural backgrounds, good communication ensures that assumptions for the position are aligned and complications throughout the recruitment process are minimized.

Analyze company needs

In order to assess a company’s recruitment demands, an inventor y has to be conducted of the functional areas which need to be covered. The defined functional areas are then broken down into specific job content. Clusters of job content are then categorized into distinct positions. Finally, the number of professionals needed is determined by the output required on the demand side as well as the market availability of professionals with the skill sets to cover areas of the pre-defined job content.

In China, companies have resorted to hiring more staff to counter high fluctuation of employees. Additionally, a prevailing scarcity exists for Chinese professionals with the necessary skill sets to fill senior technical and management roles. Accordingly, companies have been observed to hire a larger number of employees to fill such positions as compared to other more mature markets such as the United States and Europe. For example, a German engineering manager tends to have more years of experience, is more versatile and is able to handle a larger variety of tasks compared to a Chinese equivalent. This often results in a company separating what would be done by one manager in other markets  into two or more distinct positions in China.

Specify job content

Job content should include the job’s objectives, responsibilities and duties. Due to the scarcity of versatile Chinese professionals, it is common in China for the originally defined job content to be adjusted after having reviewed the availability of skill sets in the labor market.



Define job title

Defining the right job title will have a significant impact on how well a company will be able to attract qualified candidates. For instance a multi-national company in China might be restrained by their internal policies to design a job title as a “team leader” or “senior engineer” which would otherwise be designated as a “manager” at a local Chinese company. A problem arises when candidates who would have considered the job opportunity for its content and compensation would decline it simply because they would have to downgrade themselves from a “manager” to a “non-manager” title. Many international companies have therefore implemented a unique system for job titles in China, in which the title “manager” is integrated in more positions and even new “job titles” are created, which do not exist in any other country.

Generally, candidates in China expect faster promotions. Therefore, to facilitate this demand a company might consider adding more intermediate hierarchical levels. For example, whereas a company’s home market may only have “account managers,” this role could be split into “junior account managers” and “account managers” in China. In China, a lower level of standardization exists when it comes to job titles and their related job content. This provides a certain flexibility for defining job titles within an organization.

Define candidate profile

It is increasingly common that companies in China are employing a mix of local and foreign staff for reasons such as communication, managerial experience and trust. The right mix of employees can positively enhance efficiency and create a better working environment. A general categorization will help employers in China to come up with the optimal mix for their workforce (see Employee Types).

At present, many foreign companies in China are forced to hire professionals with less practical working experience and lower technical qualification compared to employees in their home country who fulfill the same role. The solution implemented by numerous foreign companies in China lies in hiring comparatively younger high-potentials who are able to handle a steep learning curve and eventually under take the required responsibility on their own while initially receiving guidance from a more experienced foreign professional.

Scrutinize each qualification criteria

Besides listing candidate qualification criteria for a vacancy in an ideal candidate profile, it is advisable to scrutinize each qualification criteria by asking the following two questions:

Kick-out criteria = candidate should no longer be considered if any 1 is not fulfilled
Required criteria = candidate may still be considered if only 1 or 2 are not fulfilled
Preferred criteria = candidate will still be considered even if criteria is not fulfilled

2. What is the relative importance of the qualification compared to other criteria?

These additional qualifying questions will provide a clearer picture of the vacancy internally and through-out the selection process. A key benefit is that individuals responsible for the selection of suitable candidates will have a clearer frame work within which they can assess candidates.

Below you will see an example of a candidate profile in which the two above mentioned candidate qualifying questions have been integrated.

Continue:
> Employee types
> Candidate identification
> Headhunting
> Candidate selection
> On-boarding process

Continue:
> Candidate identification
> Headhunting
> Candidate selection
> On-boarding process

There are various channels to identify and reach different candidates. In general, there are three types of candidates that can be identified during the recruitment process:

Due to the high activity level of the recruitment market in China, many demanded candidates do not publish their information in generic databases as this might lead to them being overloaded with irrelevant job offers. Many of these candidates are therefore only approachable via direct contacting and often only promote themselves via niche (e.g. industry-specific) channels and their personal network. This also has the benefit that the candidates are able to realize a higher market value compared with finding jobs via the generic strategies (actively applying, publishing profile in databases).

Continue:
> Headhunting
> Candidate selection
> On-boarding process

Research target companies

Establish lists of “target companies” consisting of direct competitors and other firms who might have suitable candidates. This is followed by cold-calling target companies to obtain the name and contact details of the target candidates.



Legal note
No statutory law exists against cold-calling. However we recommend that companies engage a third party, usually a recruitment firm, to make the initial contact so that there is no clear connection to the company at this stage.



Contact target candidates

When contacting target candidates whose profiles are not known, the purpose of the call is to introduce the opportunity and obtain candidate interest for the job opportunity. When the candidate indicates interest, the next step is to have the candidate send his/her CV. Only at this stage will one be able to assess whether the candidate is suitable for the position or not. This means that a significant amount of resources are required to obtain profiles which are eventually not suitable for the position. In China, it may still occur that senior Chinese professionals do not have a digital resume; in such cases making a structured inventory via the phone may be a feasible alternative to obtain a short candidate profile.

When the profiles of target candidates are already on hand, one can beforehand do a proper CV screening before contacting the candidate to introduce the job opportunity and obtain candidate interest.



Involving recruitment firms

Companies have a number of internally controllable channels to find the right candidates to fill vacant positions. However, it is more challenging to find qualified candidates for specialist and managerial positions as the supply of candidates becomes scarcer. Recruitment firms are often used to reach this pool of talents in the market who are generally passive candidates who are not actively looking for a change in their career path. As being introduced via a third party comes natural to most Chinese in various social settings, they are receptive to being introduced to an employer by a recruitment firm. This is in contrast with other markets where candidates prefer direct contact with the employer and might consider intermediaries as an annoyance.

Companies considering engaging a search firm to find specialists or managers should decide whether to use a contingency or retained search agreement. There are two main differences between contingency and retained search: methodology of selecting candidates and payment.

Continue:
> On-boarding process
> Candidate selection

Selection in the recruitment process is choosing the most suitable profiles from a pool of potential candidates. This section illustrates some important insights in the selection process in China that should be taken into account.

Screen CVs

CV screening should be done in relation to the candidate profile which has been defined during the profiling stage. Several China-specific candidate skills to be checked in an applicant’s CV include:

• > Knowledge of Chinese business culture, laws and company structure
  
• > Intercultural exposure and competence (e.g. former working experience abroad) 

• > Knowledge of global best practices

• > Work experience at foreign companies 

• > English / Chinese language skills (e.g. certificates like TOEFL, CET )

Conduct interviews

Due to the average high number of candidates screened per position, initial structured telephone inter views are often conducted by a company’s HR representative prior to face-to-face assessments to assess language skills and to clarify CV details. It is often a challenge for foreign managers to conduct an interview with a Chinese candidate due to communication and cultural barriers. The following guidelines can be used for more effective interviews:

1. Abolish the general perception of foreign managers

Chinese candidates often have the impression that foreign managers are very direct and impatient, have little experience in dealing with business in China and do not take the private circumstances of candidates into account. Therefore, foreign managers will have to be mindful of how to approach and interact with Chinese candidates in an interview in order to facilitate a more effective assessment.

2. Understanding different behavior and expectations of candidates across regions in China

Due to regional and local cultural differences, distinct behavior and expectations of candidates can be stereotyped. Four different regions can be distinguished: South, East, North and West-Central. For instance the East China candidates often behave more directly and can therefore be more treated in a straight-forward matter compared  with candidates from West-Central China. Moreover, the English level of candidates from the South is on average better than candidates from the other regions.

3. Apply a China-specific interview structure

An advisable interview structure is presented below.

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Typical Interview Structure in China
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Warming-up (5-8 min) – of greater importance in China

> Longer with Chinese than with Western candidates due to Chinese culture specific behavior
> Offer tea
> Introductory questions create a more relaxed interview atmosphere for the candidate

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Introduction (2-4 min)

> All inter viewers should be introduced by name and function

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Company presentation (5-10 min)

> Presenting materials should include bilingual company flyer, company’s strategy in Chinese, economic performance, HR development strategy etc.

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Candidate questions and answers (30-40 min) – most important / longest part of the interview

> Includes career development, former employment, project work, achievements, responsibilities

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Ending (3-5 min)

> Candidate should leave with a positive impression
> Provide clear indications on how you will follow up in terms of time-line and activity

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Legal note
No statutory law exists regarding conducting interviews in China. Interviewers may pose questions on salary level as well as other personal questions with regards to age and marital status but interviewees have the right to not disclose such information.

Manage candidate expectations

Many Chinese candidates are observed to have high expectations, as many see their peers quickly move up the corporate ladder and expect that the same should happen to them. The biggest concerns of candidates are salary, benefits and career development. Companies which are not able to meet candidate expectations experience high employee turnover rate. Clarifying salary, benefits and career development during the recruitment process will improve employee retention and will have a positive impact on candidate attraction.

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Salary and benefits:

Chinese employees’ salary growth expectations rank among the highest in the world. More than half of Chinese employees expect a salary increase of more than 30 percent when changing jobs. As a comparison, the average salary increase expectation in Europe is between 10 percent to 20 percent.

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Career development:

Well planned career development structures will benefit companies in retaining employees and attracting candidates during the recruitment process.

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It is advisable that hiring managers are involved in the process of managing candidate expectations together with the HR representative as the latter might not be able to answer all relevant questions related to the job content.

Conduct reference checks

Reference checks are carried out to verify information gathered about candidates during CV screenings and interviews. It is usually conducted after the final assessment inter vie w and prior to making an offer to the candidate. For the following reasons, reference checks are particularly important in China:

1. It is not common that candidates possess written evidence of previous employment or letters of recommendations

2. CV and credentials fraud is more commonly practiced to enhance individual competitiveness in China compared with other markets

Manipulated information might include personal data, qualification certificates, educational background, work experience, salary and reasons for leaving previous employers. Therefore, it is highly recommended to conduct reference checks before making a formal offer.

Legal note
No statutory law exists against conducting reference checks. However we recommend that companies should a third party, usually a recruitment firm, to perform activities including cold-calling to contact candidates, collecting  background information and doing reference checks to improve efficiency and avoid any direct connection to the company.



In China, the most common practice to conduct reference check is via the telephone. Due to the frequent job changes of professionals in China, former management may no longer be with the same company, making the process of validating reference checks more complex.

Continue:
> On-boarding process

In China the on-boarding process is a comparatively critical role in recruitment. It serves as an important means to reduce uncertainty for companies and candidates in the process of integrating a suitable professional into the organization. After a suitable candidate has been identified, the following steps should be taken into account:

Send candidates a letter of intent

The letter of intent or offer letter prior to signing the employment agreement is a good means to summarize the key employment conditions and to bridge the time period between identifying the right candidate and the eventual star ting date in the position. The letter of intent should be kept within one to two pages and contains the most critical terms of employment. Additionally a check-list should be drafted, which describes the next steps to be taken and materials to be provided by the candidate. This will provide assurance to the candidate and might trigger a buy-in effect, so that the candidate mentally already ‘joins’ the company before he signs the contract.

Consider candidates’ notice period

The common contractual notice period for candidates in China is one month. For more senior positions companies often customize employment contracts and add longer notice periods. In order to terminate an employment contract, candidates need to provide a formal letter of resignation to their super visor or the HR department. To reduce the risk and to remain in a comfortable negotiation position, a candidate typically expects a formal letter of intent from the new employer before he resigns from his existing position.

Manage time and feedback

As the competition for skilled professionals in China is fierce, the assumption can be made that a candidate commonly has several employment options at hand. Therefore a rapid and transparent follow-up with candidates is critical as it reduces the employment uncertainty for the candidate and leaves a professional impression. In contrast to more developed markets a structured on-boarding process is still not the rule in China.

Therefore, a professional handling can be an important differentiation factor and increase the chance of hiring talents.

Verbal and even written commitment is often provided by candidates without them actually being committed to a position. A candidate who has agreed during the onboarding inter vie w to star t in the position might back-off at the last minute to accept an offer from another company. Therefore, the hiring managers should take this point into account in China and counter it by keeping positive contact with other (less) suitable candidates as long as possible. Rejections should be communicated clearly, to avoid massive follow-up correspondence by rejected candidates, but in a positive manner, to maintain positive word-of-mouth.

Consider impact of hukou and location

A “hukou” refers to the system of residency permits which dates back to ancient China (see Chapter Two, Section Five for more information). This system is still enforced and requires citizens to register their households with the local city or district authorities. A household registration record officially identifies a person as a resident of an area and includes personal information such the name of the person, date of birth, the names of parents, and name of spouse, if married.

Traditionally the birth place is identified as an individual’s hukou. For university students, the hukou temporarily shifts to the study location. In order to permanently change a hukou, a Chinese citizen has to formally apply with the aspired hukou region’s authorities. Approval of such an application depends on the applicant’s educational background, occupation and employment history, and the process might take up to several years to be completed. An employer can facilitate such approval for its employees by formally endorsing the employee’s application. This can become a critical point of attraction for high potential candidates.

Unlike in earlier days of the People’s Republic the hukou no longer formally restricts Chinese citizens from seeking employment outside their hukou region. However, the hukou determines a citizen’s entitlement to social welfare and benefits, such as the housing fund and education. Therefore, somebody who works outside his huou region will generally not be able to participate in the social benefits of the employment region.

However, there are means to bridge this discrepancy by formally employing staff in their hukou area either through a branch office or through an employment agency but having them work in a another location. Furthermore, the employer can financially compensate for the financial disadvantage of not being able to optimally participate in the social benefits. This can further trigger the decision of candidates with hukous from other regions to join a company despite the given disadvantages.

When thinking of initiating or expanding operations in China, managers quickly realize that the bottle neck to their expansion lies in identifying key staff. Having understood the importance of human capital in China, companies come to realize the limitations of internal recruitment resources in terms of capacity and reach.

Companies have a number of internally controllable channels to find the right candidates to fill vacant generic positions, which are characterized by abundance of available candidates. However, it is more challenging to find qualified candidates for specialist and line management positions as the supply of candidates becomes scarcer.

Recruitment firms are often used to reach this pool of talents in the market who are generally passive candidates who are not actively looking for a change in their career path. As being introduced via a third party comes natural to most Chinese in various social settings, they are receptive to being introduced to an employer by a recruitment firm. This is in contrast with other markets where candidates prefer direct contact with the employer and might consider intermediaries as an annoyance

Companies considering engaging a search firm to find specialists or managers should decide whether to use a contingency or retained search agreement. There are two main differences between contingency and retained search: methodology of selecting candidates and payment.