On the supply side of the industry, there are more candidates qualified for top management positions than ever before in China. Foreign talent congregates in the country – a 2011 survey by Branchin, an executive search consulting firm, reports that of the expatriates working in Shanghai, 25.4 percent were chairmen, vice chairmen, general managers, vice general managers, financial directors or human resources department directors.

But Leary says the big change in recent years has been the emergence of highly qualified local talent. “China’s best performers are now on par with the top talent worldwide,” he says. “These days it’s quite common for multinationals to recruit in China for jobs in the West, especially in the technology and banking sectors. Even within China, salaries for top managers in those fields can be on par with remuneration packages in the West.”

“Nevertheless, there are still some issues to be addressed,” Leary says. “We’d like to see China further open its financial sector and continue to globalize its workforce – English language standards could be raised.”

The university system is improving, though Chinese MBAs don’t yet compare to top programs worldwide such as the INSEAD MBA, Leary adds. “Many locals choose to go overseas for business training, but it’s a double-edged sword. In doing so they receive a better education but miss out on the vital networking opportunities they would have gained from studying domestically. Networking is one of the most valuable aspects of an MBA program anywhere.”

Leary also argues that many locals attend MBA programs too young: “They feel it gives them an edge in hyper-competitive Chinese job market. But an MBA is designed with senior managers in mind – for a 25-year-old entry-level employee fresh out of an undergraduate degree, work experience is far more useful.”

Despite supply-side issues, demand for local talent remains strong. A recent survey by search firm MRI China Group of 3,185 middle to senior executives found that 64 percent of mainland respondents had received one offer from another company in the last 18 months. The situation looks rosy for headhunters – 87 percent of mainland respondents also said they were open to making a career move.

For Leary, while searching out Western talent is second nature, working with locals has been a learning curve. “If a potential local candidate has already worked in a foreign company, they generally know the headhunting process and what we’re trying to do for them. But employees of state-owned enterpri-ses (SOEs) tend to have less of an understanding of our role.”

Employees of state-owned enterprises, while often not the most qualified or most competent English speakers, are often sought out by foreign companies for their contacts in China’s bureaus and ministries.

The concept of guanxi – networks of useful personal connections – is pervasive in China and crucial to hiring decisions when foreign firms take on locals. In an economy still dominated by SOEs, bureaucrats can have the contacts a private business needs to get ahead.

“I came to China expecting to never fully understand the intricacies of doing business here. I’m not Chinese. Luckily, I’ve been able to get the talent inside my business that understands the culture, and I leave the finer intricacies of local networking to them.”

Despite the increasing success of Chinese companies, working for multinational and mid-cap foreign firms is still an attractive option for local talent, Leary says. But there remain barriers at the very high end of foreign companies that can hinder locals’ career advancement. “There’s a ‘glass ceiling,’ so to speak. In the 80s and 90s there were trust issues with foreign firms taking on local general managers to run their China business.

Despite these issues having since disappeared, the mentality that an American should run an American multinational in China and a European should run a European firm has remained. This glass ceiling has meant that we have seen, for example, Chinese executives of multinationals leaving the company to work for a state-owned enterprise. Hopefully this will change with fuller recognition of the local managers’ abilities.”

The fact that the headhunting industry is prospering in China is a good sign. As the mainland’s economic growth story continues, executive search firms like Leary’s Column Associates are helping to ensure that the companies spearheading the boom are in safe, happy – and well imbursed – hands.

Source: China Today