With multinational companies continuing to look to China for new market growth, plenty of information exists about the trends and challenges businesses face when relocating key talent into China, but less information can be found about how companies in China are managing their mobility programs: where they are moving, what their patterns of talent growth are, and what kinds of issues they face.
Cartus recently hosted a meeting in Ningbo for the leading China-based HR leaders, and we conducted a relocation pulse survey to learn more.
Leading companies in China have seen an increase in the number of assignees they have moved in the past two years. The most commonly cited reasons are: company growth, lack of local talent, and M&A activity. The most popular assignment destinations in Asia are Shanghai, Beijing, and Hong Kong, indicating that China market expansion is important to business growth. This trend is set to continue, with respondents indicating that Shanghai and Beijing will continue to be two of their most important assignment destinations into 2016.
The countries that China-based relocation practitioners say they currently find the most challenging are India, Brazil, and Japan. They cite infrastructure, security, cost, and cultural differences as the key contributory factors.
Similar to the assignee concerns noted in our 2014 Global Mobility Policy and Practices Survey, China-based employees accept relocation firstly for the compensation package offered, and secondly for the career development opportunities the assignment provides. On the flip side, the main reasons given for turning down an assignment are spouse/partner employment issues and children’s schooling.
Relocation Cost is the Number One Challenge
In our Global Mobility Policy and Practices Survey, 57% of respondents indicated their focus on relocation costs has increased in the past two years. China-based practitioners confirmed the importance of cost, with 100% of respondents citing it as one of their most critical current challenges. Issues of compliance, finding suitable local candidates, and infrastructure also scored highly.
Key China Considerations
If you are relocating assignees in China, here are some key considerations from our poll:
• A candidate assessment program is critical to ensure that you identify the right employee for the move. Don’t consider only business and technical capabilities; cultural fit is just as important for assignment success.
• Plan ahead. Visa and work permits for foreign moves into China and amends to the Hukou registration system for local moves both take time. Read our Mobility Insights update on China Immigration for further details on visa processes.
• Cultural and language challenges are commonplace for foreigners, even in large cities like Shanghai and Beijing. To ensure that your assignee is effective from day one, make sure that your program includes cultural and language training for the assignee and their family.
• In Tier 2 and 3 cities, consider infrastructure challenges such as schooling, health, pollution, transport, and local support networks, all of which will affect the success of an assignment unless proactively addressed. Hardship premiums should be reviewed regularly.
If you would like further information about Cartus’ capabilities in China, please contact your Cartus representative or email email@example.com