Accelerate business growth in the local
Jack Niu is a busy man. As a North Asian service operations director for US multinational industrial manufacturer Honeywell, he spends his day hard working in his office building in downtown Tianjin, which neighours the Chinese capital. When he’s not in his 15-sq-m office teleconferencing with colleagues on his global marketing team, setting up meetings with key customers and exploring new service opportunities to further grow his company’s business.
Niu, a native of Beijing, is traveling across northern Asia to further consolidate corporate plans and partnerships. Today, Niu owns one of the highest senior management positions at his company on the Chinese mainland. But when he first started out in the business 17 years ago, earning a mere 300 yuan ($43) a month. These days, local and foreign directors at multinationals in China can earn up to 100,000 yuan ($14,633) a month — and sometimes more depending on the industry, size of company, and the executive’s skill set, experience and bargaining power.
Last year, Niu landed his current job — it was a position previously filled by an expatriate in China. As the country’s red-hot economy continues to develop, so do career opportunities for local professionals like Niu, who are bilingual, university-educated at home and abroad, and have accumulated years of valuable work experience at multinational companies in China.
Ten years ago, Niu thought to be a China leader in the service business for some multinational company in the 20 year range. But he didn’t imagine he could manage Hong Kong, South Korea, Japan, the Chinese mainland and Taiwan. Nowadays, there are more and more professionals in the mainland replacing expatriate hires that previously dominated middle to senior management positions at foreign-owned entities in China. Because new companies are constantly entering the Chinese market, numbers on the trend, which has become most evident within the past decade, are hard to track.
However, research conducted by Mercer China, a global provider of consulting, outsourcing and investment services, shows a steady decrease in the distribution of expatriates within foreign-owned entities in China between 2005 and 2007. The study from last year focused on 1,200 expatriates working in first-tier Chinese cities. More management positions are filled by locals, and there is increased evidence of a career path and opportunity for locals to advance their career within foreign-owned entities. So a career ladder in multinationals for local management talent is needed urgently. Well over a decade ago when world-class international companies first began entering China, companies had little choice but to bring in expatriates because there was no homegrown talent available on the mainland, says Larry Wang, founder and CEO of Wang & Li Asia Resources, a professional recruitment agency in China that offers services to leading international companies and top professionals in the Chinese market.
“The whole approach was to be here until the market took off,” says Wang. “Particularly in the last 10 years, the market has arrived and the potential for earning money has really turned to opportunity.” At first, most companies were initially willing to five out generous expatriate compensation packages. But, because China today has become the major market for many of these companies, they are constantly looking for ways to better manage operating costs.
Now, they seldom hand out large expatriate packages. The best way to expand business in the local market is to get people understand the culture and language. While management salaries at foreign-owned entities in China are wide-ranging, industry estimates put current salaries for middle managers between 10,000 yuan ($1,463) and 25,000 yuan ($3,660) a month. Senior managers are placed between 25,000 yuan ($3,660) and 40,000 yuan ($5,856) a month, while directors earn between 40,000 yuan and 100,000 yuan ($14,633) a month — and sometimes more.
Guy Rotberg sees more local professionals being hired into such managerial positions everyday. “The Chinese management has another advantage over the expat, which is the ability to be able to work within the Chinese market,” says Rotberg. Owing to the focusing on the domestic market rather than the export market, more foreign-owned entities demand for local talent. The best way to expand business in the local market is to get people understand the culture and language. Because of the rapid speed of China’s economic development, foreign-owned entities will continue to hire more local talent in the future.
Of course, foreigners or non-regional locals are still hired when they are better suited to the position than locals, but they are being offered localized salaries — fringe benefits for expatriates are a thing of the past. Yet, despite the fact that rising Chinese professionals are replacing more expatriates than ever before n middle to senior management positions at foreign-owned entities in China, the trend seems to stop short of he top jobs, at least for now. Rotberg says this is because the relationship between the locals and overseas foreigners at the top level still needs time to further develop in most cases.
“The only thing that is left problematic is the compatibility and the connection between the headquarters abroad and the Chinese subsidiary,” says Rotberg. “The top level management, which is basically the C-level, is still left to the expats because this is the highest level of connection between the two companies.”
Are you interested in the business opportunities in China?
China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.
BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.
Please visit http://www.BPOVIA.com/ for details about our service.
Popularity: 12%