Having local managers and executives can be an invaluable asset for new entrants into the Chinese market. The use of local expertise and local networks can often mean the difference between business success and failure in China. Nonetheless, finding local executives can be a major challenge, as Western-style headhunting methods are often not used, or are at least only a piece of the puzzle, when it comes to your executive recruitment strategy in China. Foreign companies face the challenge of overcoming the uneven playing field when it comes to finding high-quality local executives and managers.
In China, hiring upper managers and executives is a very different matter than hiring lower level talent. Hiring management is not usually done through direct methods like posting job openings, but is instead executed by going through local networks, building relationships, and word of mouth. While this is certainly true for executive recruiting in the West as well, it is much more the case in China. For this reason alone, foreign companies are at a disadvantage when it comes to hiring the very best managers. New, foreign companies will likely not have deep networks and relationships in China, which their local competitors likely have. Foreign businesses will need to develop a sophisticated executive recruitment strategy in China to find the best local executives to lead their organization and drive results.
The Advantages of Hiring Local Management
While foreign companies may wish to rely on a combination of local and foreign management, having a substantial element of local management in your organization can be a critical strategic advantage in the Chinese market. First, locals bring local expertise, which is critical in such an opaque and complex market as China. Second, they bring local networks, which can be critical to success. Local executives may have connections with the government and bureaucracy, suppliers, and, most importantly, prospective clients and partners. Finally, local executives know the cultural and political nuances that must be taken into account when managing the company’s reputation and image. As one example, locals could help the company demonstrate to stakeholders and the general public that the company plays a positive role in China’s promotion of a harmonious society or any number of government-led societal initiatives.
On the other hand, expat managers may have a different management style that can also be an asset at your organization. Western managers are believed to have a more participatory management style that is more open and less hierarchical. Employees may feel that this is beneficial for their career development, fostering employee retention, and work satisfaction. One way to get the best of both worlds is to hire Chinese executives with extensive overseas experience.
Headhunting and Business Strategy
A China-based headhunter will be a value-add to the extent that they bring assets to the table that a new company to China will not yet have had the chance to develop. The main asset the headhunting firm will bring is extensive local networks. A headhunting firm that simply posts jobs online for their client probably does not deserve the high-fees that they charge. Therefore, be sure to look for recruitment firms that bring these deep local networks and relationships to the table.
The headhunting firm should have a very good idea of what the company’s executive management needs are. Therefore, the company itself must have a crystal clear idea of what they are looking for. An understanding of their needs in an executive is, itself, incomplete without a very well-developed business strategy and a set of short-term, medium-term, and long-term goals and well-designed metrics to measure those goals. What the company looks for from a local executive should be a natural product of their goals and metrics in the Chinese market. Since the company will just be getting off the ground in China, it will be more critical than ever for the headhunting strategy to be carefully calibrated to the larger business strategy.
Developing local networks early on will give you an advantage later on when seeking to find future executives that will be an ideal fit for your organization. Business in China remains very much a relationship-based endeavor. Businesses that quickly become comfortable with this cultural difference will fare better than those that don’t. In China, it is not seen as unprofessional to demonstrate a sense of personal care for someone with which there is a business relationship. Western business culture is based, to a much greater degree, on rational, dispassionate decision-making.
When it comes to developing relationships that will aid your ability to hire the very best executives for your company, it is important to remember that this is seen a personal and emotional matter as well as a business one. Prospective employees may feel a greater sense of connection to a company that is aware of such cultural nuances.
Repatriate Chinese Managers from Overseas
Instead of relying solely on candidates based in China, companies can look for Chinese candidates that have spent much of their career overseas and lure them back to China with an attractive offer. This piece of an executive recruitment strategy in China can help a company overcome the built-in disadvantage as a foreign company in China of lacking the local expertise. While it can be a tall order to ask a mid-career individual to relocate overseas (potentially uprooting his or her family), they may be inclined to do so if they are being offered an attractive, executive-level position. One of the pitfalls of this approach is that, having lived overseas, they may not have the same local networks or up-to-date knowledge of the market. For this reason, this is only recommended as one prong of your executive recruitment strategy.
Local managers and executives helping to run your organization in China can be an invaluable asset. However, finding the right individuals for this can be a lengthy, costly, and challenging process. Businesses’ executive recruitment strategies in China should be wedded to their overall business strategy, so that the candidates found will best help the company achieve its goals. Designing your executive recruitment strategy in China properly from the outset will greatly increase the productivity of the resources that are spent on recruiting, such as headhunting fees and the extensive time it takes to develop local networks.
 See http://blogs.lse.ac.uk/management/2017/01/09/multinationals-in-china-how-local-should-management-go/