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There is an increasing competition between Chinese and multinational companies to find and attract the brightest executive talent on the market. What are the reasons for this trend and how can international companies stay competitive?
Chinese Companies are Upping the Competition for Executive Talent
There is an increasing competition between Chinese and multinational
companies to find and attract the brightest executive talent on the
market. What are the reasons for this trend and how can international
companies stay competitive?
01 Chinese Companies Are Upping the Competition for Executive Talent
China is shifting from a low-cost production outsourcing location to a more mature market followed
by increasing labor costs. Over the past years multinational companies have seen increased
competition for executive talent from Chinese based companies which has shrunk the wage gap
between local firms and their overseas counterparts.
Local executives in China have previously favored multinational organizations with higher pay,
better benefits, and the promise of higher management positions they could be promoted into.
There was also a thought that working for overseas companies was more prestigious and offered
better career development opportunities. While that has been the reality in the past, things are
changing for Chinese executives and multinational companies are seeing increased competition on
Chinese companies have started attracting executive candidates away from the global companies
that have dominated executive recruitment in the past. Companies based in China are upping the
competition and making it more difficult for multinational companies to hire. National pride,
attractive compensation packages, and better career opportunities are good factors in driving this
change, but how exactly are they enticing them?
02Chinese Companies Are Upping the Competition for Executive Talent
One way in which companies in China are working to bring local executive talent to their side is by
offering benefits that are on par or more lucrative than those offered by multinational corporations.
Several years ago when multinational corporations began their move to China the benefits they
offered to their executives were significantly better than what was offered by local companies.
Chinese companies have caught on and are stepping up and making adjustments to their total
Especially technology driven Chinese companies are sometimes outpacing their international
competitors at adding attractive stock options to their compensation packages. Alibaba, China's
largest e-commerce company, spent almost 15% of its annual revenue on stock-based
compensation. At the same time Amazon spent less than 2% of its revenue on stock compensation.
Tencent, another Chinese Internet giant which owns the country's most used messenger app,
recently made headlines by paying a salary nearly double of that of Apple's highest paid senior
Executive recruitment in China was about finding the best management talent and luring it with
benefits unlike those that could be received at Chinese national companies. Now Chinese
firms know what they need to do to compete and are matching their multinational competition. By
offering competing salaries and similar benefits packages, more local executive talent is choosing
to work for companies that are based in their home country.
Companies in China are growing at high speed which means a high number of job openings.
According to China Daily “55% of domestic firms set to recruit more staff this year compared to 41%
of multinational corporations”. One reason for this shift in numbers is that multinational companies
were negatively impacted by the recession. This caused them to slowly halt or cut jobs in China,
while domestic Chinese companies continued to hire.
Seeing this shift has impacted local Chinese talent and encouraged it to pursue home based
opportunities. Chinese executive talent now has more options when considering moves to the next
level. Multinational companies are no longer the only option when it comes to attractive leadership
roles. Ambitious local talent is still considering multinational companies, but along with local
More job openings equal greater opportunity for Chinese nationals. With several positions open the
idea of growing your career at a company based in your home country is very enticing. Job security
in a local Chinese company is greater than at a multinational company which may decide to pull out
or shrink its Chinese operations.
Fast Business Growth
03 Chinese Companies Are Upping the Competition for Executive Talent
Most executives want to be able to make decisions.
While in China there were some senior executives with
official sounding titles, they often lacked the ability to
make decisions. The decision makers, sat far away in
the global headquarters. Even when there are high
level leadership positions located in China, the China
Business Review states they are largely filled with
expatriate managers who are relocated to China from
other parts of the world.
International companies often continue a “class
ceiling” mentality which promotes the idea that they
need a foreign executive to oversee a local team
because they don’t have confidence in local executive
talent to handle processes. In addition, the expatriate
manager who likely was moved from the company’s
global headquarters negates the need to invest in
training of local talent to take on a management role.
This lack of career progression naturally leads to
frustration with top local executive talent and leads
them to seek opportunities elsewhere. Local
companies are giving management level opportunities
to their managers, which is enticing to frustrated
executives who have higher ambitions. The input that
these executives now have is extremely valuable and
tough to compete with. Chinese based companies are
able to attract rising executive talent away from
multinational firms with high ranking positions.
Feeling that your leadership role matters is essential
to job satisfaction and can outweigh factors such as
salary and title when considering a new executive
role. Several studies have linked job autonomy to
overall happiness including an article from Science
Daily. Autonomy can include flexibility in where and
how you do your work and is a factor in overall work
Driving change is another factor that executives are
looking for and one that local companies are
providing. Being part of the change that can shape the
company is a huge selling point, particularly for those
who are looking for leadership roles. When executives
have to act on a decision but don’t have any input in
what is happening, it can lead to job dissatisfaction.
04Chinese Companies Are Upping the Competition for Executive Talent
As an article from the Harvard Business Review
implies, there are ways in which multinational
companies can work to compete in this changing
market. Better compensation packages, a clear career
development path for management, and more
leadership and decision making authority in the
Chinese subsidiaries are key.
To attract Chinese talent companies will need to offer
them the same or better opportunities than local
companies. Many Chinese also like the idea of working
for a company based in China for national pride. This
may mean that foreign-invested companies will need
to think of ways they can be more prevalent on the
If multinational companies want to continue to
compete on the Chinese market, they will have to
develop a new approach that meets the needs of the
local executive talent market. They can start by asking
executives who currently work for them what they like
best about their job there and advertise those aspects
on the local market to attract top talent. And finding
out what executives are dissatisfied with at the
company is important too.
Once executives provide this information, companies
can adopt to the local requirements, initiate change,
and make sure that managers are aware of the
change. Multinational companies can shift the balance
again in their favor by recognizing the changing
landscape in the market and adjusting to the needs of
Companies Can Compete
About Ginkgo Search Partners
Ginkgo Search Partners aspires to be one of the most reputable international
boutique executive search firms specializing in attracting outstanding professionals
to fill management positions in China. We know where to find and how to attract
exceptional leaders with profound knowledge of your specific industry and match
to the culture of your organization.
We serve both national and international companies in a diversity of industries and
work in each market segment with only a limited number of clients. This approach
ensures the least possible restriction on potential sources and provides us access
to a large talent pool. Building on long-term relationships with our clients allows us
to better understand your business and talent strategy needs and enables us to
stay practically focused.
If you have any questions about our executive search services in China, please
don’t hesitate to email us directly at email@example.com