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i Think Twice-i Chinese Puzzles and Opportunities

January 29, 2003
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Ames Gross, president of a recruiting company called Pacific Bridge, recallswaiting for a plane at the Shanghai airport five years ago. Flights were severalhours late. Gate numbers were a mystery.

    As he waited, Gross sipped bottled water in the cafeteria. The restaurant wasdirty and dusty. Drinking fresh tap water wasn't an option. At 11 p.m., awaitress told him the cafe was closing and that he should pay his bill. He did.A half-hour later he stuck his head in the kitchen to see if he could getanother bottle of water. The waitress was filling up bottles with tap water andsealing the lids so that customers would think they were drinking clean water.

    As Gross discovered, it was hard to find out what was really going on inChina. It still is. No one can even agree on whether the Chinese economy isgrowing, stagnant, or slipping. On the one hand, Zhu Zhixin, director of theNational Bureau of Statistics, says the Chinese economy grew 8 percent lastyear, which would mean it expanded faster than that of most any other country.

    On the other hand, publications such as The New Republic report thatstatistics about Chinese economic growth are way overblown. The magazine saysthe economic data about GDP growth in China is extremely unreliable, and thatit's more likely the country is in recession. The New Republic points out thatthe country has a poor legal system, poor accounting, and high unemployment.


No matter who's right about the state of affairs in China,workforce-management opportunities abound.

    No matter who's right about the state of affairs in China,workforce-management opportunities abound. There are very few people in thatcountry who have more than a decade of human resources experience. Most citizensworked for the government until the last decade, when China prepared to join theWorld Trade Organization.

    As more private businesses emerge, China will need workforce-managementexpertise. China will need products. China will need services. The Chinesebusiness community will want to learn about concepts such as pay forperformance, succession planning, and leadership development. The ironic butproven theory of retention through training--that the way to retain people isto provide them with the skills that will make your competitors want to stealthem away from you--isn't widely known.

    The Chinese used to be bound by laws regulating where they could work. Now,the most skilled employees are hopping from job to job, creating challenges thatWestern countries know all too well. Much of China doesn't know how to downsize.You, unfortunately, do.

    Just in case you don't believe me, follow the dollars (or, in this case, theyuans). Recruiting, staffing, and expat service vendors are headed straight toAsia. Right Management, a career-transition company, plans to expand inShanghai, through either opening new offices or buying a Chinese company.Cendant Mobility, which handles relocation, expatriation, and related staffingissues for two-thirds of the Fortune 50, is seeing significant growth in itsinternational assignment practice in China.

    Michael McCallum, vice president at Cendant, is awed by what he calls the"enormous, breathtaking changes taking place in China."

    Recruiting guru John Sullivan flew to China a month ago to find thatvirtually no one was using human resources metrics, but demand for suchexpertise is so high that some HR programs have 10 job offers per student.

    Oracle VP Joel Summers is paying close attention to the market in China,which he calls "an emerging giant." Deloitte & Touche is opening new officesin China. MRI, a recruiting company, is expanding in China and sees the countryas the next frontier for workforce management. Executive search firms Korn/Ferryand Heidrick & Struggles announced recently that they're expanding in China.Heidrick says that the Chinese headhunting market will be worth $200 million ina few years.

    Synco Jonkeren, based in Amsterdam, is in charge of PeopleSoft's productstrategy. He's giddy about China. His company opened a Beijing office last yearand is shifting resources from other areas to the Chinese capital. Jonkeren saysthat wherever you're located, chances are good that sometime in the next fewyears, you will consider moving some production facilities to China.

    Jonkeren says that the Chinese executives who will run those facilities arerealizing that their old workforce-management style--with family favors, rigidhierarchy, and little tolerance for criticism by subordinates--isn't going toallow them to compete globally. They'll want to learn Western practices.Meanwhile, the rest of the world, as Ames Gross realized when he got his bottledwater, will have to keep digging for information before it really understandswhat's going on in China.

Workforce, February 2003, p. 72 -- Subscribe Now!


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