Recruitment is picking up again in China, but the days of fat expat packages and salaries may well be over as the country’s employment market becomes more localised writes Sophie Loras.

Twelve months on from the global financial crisis, the feeling on the ground in China is one of great optimism. A survey conducted by Michael Page International in September of approximately 550 contacts in China found 47 percent believed headcount in their businesses would increase over the next 12 months and when asked if they believed business conditions would improve over the next six months, a staggering 79 percent said “yes”.
The survey conducted across all industry sectors is just one of many indicators in the recruitment sector suggesting job placements in China are on the rise.
Brodie McDougall, Michael Page International’s Shanghai Manager says China remains a land of opportunity. "Although business around the rest of the world has slowed and they’ve lost head count, in China the majority of our clients have said they will be increasing head count,” Mr McDougall says.
Around 60 percent of Michael Page’s China recruitment has been in the financial sector, 20 percent in supply chain and a further 20 percent in sales which has doubled in the last 12 months. Michael Page has seen big demand for sales directors and sales managers, in finance – local CFOs and people skilled in financial planning and analysis – and placements in the cosmetic, FMCG, luxury auto and pharmaceutical research and development sectors.
McDougall says financial planning has been a strong growth area post GFC as companies seek financial planners to work with their sales teams and assess which areas of the business are most profitable. While the first quarter of 2009 was quiet on the job front, Michael Page International has seen year-on-year placement increases in China for the second and third quarters and placement levels over the last three months in Hong Kong are back to August 2008 levels.
"Shenzhen is still growing, Hong Kong has seen an upturn in the last three months and Beijing is still solid since the Olympics, especially in procurement supply chain and finance,” says McDougall.
"As far as the region goes – China has continued to actually grow.”
Julia Worrall, the owner and head consultant of Recruit Train Retain, recruits for recruitment companies and has seen business confidence in China returning since April. “People are now recruiting on a regular basis,” says Ms Worrall.
"If recruitment companies are recruiting it means their clients are recruiting – and that’s a good sign.”
Worrall says the financial crisis has brought significant changes to the industry.
"The recruitment sector at the end of 2008 and early 2009 was running on skeleton staff. There has been a very “healthy” change in that strong performers who stayed on are now the core of very strong teams.”
Other big changes in the past 12 months include the switch from a candidate’s market to an employer’s market and as a result packages have gone down, negotiating salaries has been more difficult and the interview process for jobs is taking much longer says Worrall who has seen some candidates go for up to seven interviews for a job when it might normally have been one or two.
She has also noticed a decrease in job hopping.
"I’ve been aggressively recruiting but have been surprised by the loyalty of Chinese staff in the recruitment sector – people are too scared to move into a new environment they don’t know.”
It is a sentiment backed by Brodie McDougall.
"In the past, junior employees were doing their jobs purely for the money whereas now it’s been based on the company, the job and then the money.”
The financial crisis has also accelerated the growing trend to employ returning Chinese over expatriates. “From our research companies are very focused on succession planning for local development,” says McDougall.
"Demand is coming from the market – there has been a move for good quality Chinese with western experience whereas demand for expats has decreased considerably and this is in line with a maturing economy and the quality of candidates in the local market improving.”
Swann Global’s Shanghai-based Peter Arkell says in the mining industry especially, the localisation trend has been dramatically accelerated by the financial crisis. The company’s annual salary survey of the China international mining industry, released in October, found that in the four-year period between 2006 and 2009, the most “significant” trend for local talent was in the representation at executive management level – jumping from 14 percent to 51 percent in that period.
"There has been recognition by international business in the value of the Chinese executive over a foreigner and the GFC has heightened that,” says Arkell.
Michael Catlow, Executive Director – Boyden Global Executive search in Melbourne agrees.
“Particularly with China we have seen a change in the last 12 months with the type of person businesses are searching for. There has been a character swing away from the expats and we’ve been asked to specifically find people who have lived and worked in China, usually Chinese nationals with a western understanding and overseas study but with Chinese language and Chinese understanding,” says Mr Catlow.
In one recent case, the company was asked to find a candidate specifically from the region in china where the job was being placed.
"I think it is more cost effective and part of a maturing of the market. There is now a level of trust as the sophistication of Chinese managers improve.” ■