Navigating the Labor Market in China: Enhancing Expatriate Effectiveness

Abstract

[Excerpt] As business continues to grow in China, employers there struggle to find locals who possess the needed knowledge, skills, and abilities to meet the talent demands of the market. Many multinational corporations fill requisitions with candidates from outside of their local region or even from outside China. Since expatriate assignments are extremely costly, employers actively seek cost-effective expatriate compensation options. The local-plus-pay approach in China is popular but remains a work-in-progress. In addition to lower-cost compensation and benefit plans, employers are searching for increased return on expatriate investment. In fact, 10 to 20 percent of all U.S. managers sent abroad returned early because of job dissatisfaction or difficulties in adjusting to a foreign country. Of those who stayed for the duration, nearly one-third performed below satisfaction. Most alarming, one-fourth of repatriated employees joined a competitor within one year of returning to their home country. This paper discusses the complexities HR professionals face in China including attracting top talent into an organization—with a focus on expatriates—and in managing an organization uniquely situated in a high-growth environment. It further highlights successful best practices to thrive in such circumstances.