Reference no: EM133097718

China - Preferential Policies

The entry of China into the World Trade Organization (WTO) in December 2001 indirectly affected the HR climate in the country. Changes include the competition for the limited talents in the China labor market. As the competition further intensifies between the local Chinese firms and foreign multinationals, many foreign multinationals pursuing the option of recruiting from different geographical locations in the region to meet their labor needs. However, this strategy significantly increases the recruitment cost for these companies. Companies that employ expatriates also need to acknowledge the challenges in cultural differences faced by their foreign recruits, as the local Chinese employees may lack the ability to communicate in English and will not be familiar with Western practices. To manage this issue, local Chinese companies have started to coax professionals who had left China for education or career development to return to fill the labor void for skilled employees. These returning professionals are ideal candidates for employment as they have native fluency in many areas as well as possess conversational abilities in English. Also, most of them have experience in Western countries and understand Western business practices. To further encourage this initiative, the Chinese government has implemented "Preferential Policies" to make returning to China attractive to this group. These policies include financial funding, the establishment of industrial or high-tech parks throughout China, and various other incentives to convince these highly skilled and educated professionals to return and contribute to the country. Many returnees from top universities in the USA contribute to Chinese firms to excel out of this incentive. However, as local talents become more and more competent through better education systems and job opportunities in multinational companies, the advantage of returnees continues to diminish. Local candidates have acquired language skills through learning at work and on-the-job training in multinational companies, which enable them to gain a much higher fluency. Returnees need to display more or differentiated skills that are in short supply to justify higher compensation. Besides the higher compensation package, the employers face the challenge of managing the returnee's possible attitude of superiority resulting from their experience abroad. Such attitude not only creates resentment but also tension at the workplace, which has a detrimental effect on the overall company culture. Questions A tip: Always read the case, analyze, recall any articles read before in regards to the concept. Provide a case summary as an introduction then answer the questions clearly and at the end provide a few concluding lines to make the case more presentable.

1. What do you understand from the case study about the supply and demand of HR in the Chinese labor market?

2. What can be the incentives offered to returnees?

3. What could have been the reason(s) for many professionals from universities in the USA to return?

4. What kind of skills of returnees will be outdated after some time? What kind of skills of returnees will remain valuable and cannot be copied?