DiligenceChina

The Chinese HR situation is set for another sea-change that is going to provide the Chundits (China Pundits) fodder for hours and hours of deep analysis and high-priced consults – but let me give it to you quick & dirty right now. That thirty-something MNC middle manager from Shanghai or Beijing - who complains about only earning 15 times what his father did - is gradually getting replaced with younger, smarter, more aggressive local grads who have better international skills and have learned to talk the talk (if not actually walk the walk) when it comes to innovation and creativity.

About 5-7 years ago, The Market in China decided that anyone over the age of 40 was expendable. Sorry guys. Your State Owned Enterprise experience wasn’t going to transition to the new market economy. Ex-pats who have been in China for a while vaguely remember the pain and bitterness of the period. There were Newsweek articles. Profiles. Impassioned, pathos-filled photo-studies of former factory managers reduced to guarding bicycle parking lots or directing traffic. Then, after that went on for a while, we all starting ignored them. I’m not pointing fingers – I did the same thing. Market shifts are like that, and if you’re from the US you’ve seen more than your share of Busts. You know how they work.

At around this same time, twenty-somethings were feeling truly blessed as MNCs started pouring in to China and buying up all the English-speakers who knew how to say “market economy” and went to a reasonably good school. A typical profile at the time was: 27 years old, English major from a famous school in Shanghai or Beijing, maybe 2 years of overseas or MNC experience, and good language skills. Those that fit the bill would get hired to a training program at places like Motorola, Volkswagen, and Siemens for starting salaries of 3 – 5,000 rmb per month. Not much by modern standards, but it seemed like a fortune way back then. Now those same twenty-something newbies are more like mid-thirty-ish, and are probably working on pay-plans in the 25 – 35,000 rmb per month range.

These Thirty-somethings are extremely resourceful, creative and motivated – when it comes to finding new jobs. If you ever want to hear a Chinese professional put together a truly innovative out-of-box proposal, then simply ask him to explain why you should hire him at rmb 50,000 per month with full benefits, expense account and a staff of 3 to do the actual work. They really push the envelope. When it comes to performing their day-to-day work, the situation down-shifts a few notches. They tend to put in long hours, but their work is uninspired at best. Mid-level managers repeat the same processes over and over, whether they are effective or not. It’s almost as so they are conserving their energy for something more important – like a job search.

Pour a couple of beers into just about any senior international manager in China and he’ll tell you that he’d sack his entire crew of middle managers in a heart-beat if he only had someone or something to replace them with. The bottom level staffers and workers are fine – with the right supervision and systems they do good work for a good wage. At the top, we’ve learned that if you are willing to fork over international levels of compensation you will get international level performance. Where the engine of China Inc gets gummy is in the middle of the org-chart. It gets slow, and it gets EXPENSIVE.

But at the same time, Chinese universities are churning out literally MILLIONS of eager grads who are struggling to find decent jobs– and they are gradually working their way up through the system. The faces at public training seminars and networking events are getting younger – and smarter. They are asking the right questions, saying the right things, and have their sights firmly set on the soft white underbelly of China Inc – those new ‘sleep-walking pandas’ who do little more than hone their CVs and drift from job to job. There is more and more pressure on HR departments to pass over “jumpers” who have switched companies too often, which leaves recruiters with few options other than trying out less-experienced grads. Large MNCs are good at training new hires, but a good deal worse at rehabilitating remedial managers – particularly when they are over-paid and over-entitled.

If your shop doesn’t have a good system for bringing on new grads and then prepping them to be useful parts of your corporate machine, then you are putting yourself at a competitive disadvantage. Just as the over-40 generation fell by the wayside in the early part of this decade, the 30-somethings are going to find themselves devolving to smaller niche MNC players or the more aggressive local firms. The future of China Inc belongs to the smart and hungry 20-something grads – and to the managers who know how to make use of them.