Foreign companies face multiple challenges developing their business in China and Human Resources management is one of the top concerns.
The major HR challenges that your business might encounter in China are:
- Tough and changing regulations. For example, foreign representative offices are not allowed to hire foreign employees directly - they have to use the services of special HR management agencies.
- Language barrier. The official labor contract must be in Chinese and it should comply with all the local standards. Even though the employer may choose to have two versions of the contract, e.g. in Chinese and English, the valid contract will be the one written in Chinese.
- Culture barrier. Even though China is a fast developing country, it still needs time to get used to the international corporate etiquette. Some employees will follow the traditional way of doing things in China putting a great emphasis on keeping their “face”, vertical relationships, loyalty to their manager as a senior and standardized way of implementing the tasks. It is very important to have a manager who is aware of the local culture specifics.
- Recruitment of qualified professionals. The common practice in China requires background checks only for director, supervisor, and senior manager candidates. The HR needs to make sure the employees are qualified to work in an international company which is even more challenging in the 2nd and 3rd tier cities.
- Labor cost. The limited number of professionals is constantly driving salaries up. To be precise, in the past decade, real wages in China have grown around 12% per year.
- Employing expats. There is a long list of the requirements the foreign employees have to meet in order to prove they are qualified for obtaining a work visa in China. The process of getting a work permit is also different for different cities which requires a professional guidance
- Termination of employment. Termination of employees is even more challenging than hiring them. Foreign owned companies must be especially cautious when terminating employees, because the employment laws in China protect laborers in general and it is very difficult to terminate an employee that is still under contract.
- Organizational development. Very often there is a lack of communication between the Chinese partners and the foreign board of directors or general manager; different managing styles and misunderstandings present another challenge for foreign companies in China.
An efficient human resources management is a critical component of any business and even more so in China. China presents HR managers with unique challenges and one of the best solutions for the business owners to deal with them might be to outsource HR management.
Outsourcing employee recruitment not only helps you concentrate on your core business activities.