Cultural & Business Guide



When a company intends to establish an enterprise in China, one of the very first controversial issues is the personnel. Better a European or a Chinese? The choice in some cases makes the difference between success and failure. It is not to be forgotten that job-hopping strategy is a widespread phenomenon, pretty common all around China. Thus, every company needs to set up a program and strategies of employees retention in order to grow their very own human resources.

Laws and Regulations

The Labour Law of the People’s Republic of China provides information on employment by foreign-Invested Enterprises (FIEs) such as Sino-foreign joint ventures and WFOEs. There are specific regulations for major cities (Beijing, Shanghai and others) and special Economic Zones, so it is advisable to check directly with the local law service unit.

Generally speaking, an RO cannot employ Chinese citizen staff directly, but needs to turn to Human Resources Management Companies in China such as FESCO or CIIC (; However, WFOEs can hire them directly and can also take care of payroll matters on their own.

Bear in mind that the written contract shall also include information about salary, working days, overtime and overtime payment, holidays, leaves (maternity, annual leave) as well as administrative costs and taxes.

Job Announcements

In China it is common to send general applications to different positions, even when applying to the same company. This means that for the HR managers it is difficult to understand what the interests and aspirations of the candidate are. Therefore, to filter the applications, it is fundamental to focus on the needs of the company and on the criteria for the open position.

English skills need to be double checked in person or over the phone in order to be sure that everyday English communication is guaranteed. Remember to ask also for the amount of salary the applicant received from the previous employer, even though the amounts are often exaggerated.

In China a company can ask for the support of many HR companies who can assist the HR personnel to individuate the correct candidate. The fee depends on the goal the company needs to meet: the higher the position is, the more money the HR company will ask.

On the other hand, job posting is still effective in China, but generally speaking this is valid especially for very well-known brands.

Another possibility is an Informal way, which means that the search for a specific position or candidate passes along by a word of mouth among the employees of the company.

In China it is still a very common practice considering that from a traditional point of view. Even in this case, guanxi and the relevant network each person has are tightly interconnected and considering that work plays an important role in life, guanxi and networking may form a way to inform potential candidates.

Interview. Getting closer

Considering that in China there is a shortage of highly skilled talented persons, if a company is strongly interested in some candidates (and it is the company interest to create an inviting environment to hire the high skilled staff), respect of the candidate is a must. Offer a drink and give him or her also your business card. Surely, an introduction of the company, long term aims, and full information about the position are the key points. It is not to be forgotten that the candidate's requests and expectations are to be taken into consideration with the aim of attracting and retaining skilled talents.


Some companies, especially in key positions, feel more comfortable by hiring expatriates. This practice has its Pros and Cons.

Considering that Europeans have a common cultural background and communication, it is simpler for this person to be closer to the company values and share such values easily. On the other hand, the cost of hiring an expat are much higher (generally speaking 20% more than locally hired managers) and expats have limited knowledge of the Chinese culture and language. This means that if this person has to cooperate closely with Chinese managers or staff, the cultural gap can create deadlock situations.

By the way, if a Company intends to employ foreign staff, remember that there are some steps that need to be duly fulfilled, such as to prove that a Chinese citizen cannot accomplish the tasks requested for this job, or that the foreign staff has a minimum of 2 years' experience in the same field that the company intends to hire him/her for and that s/he has a minimum of Bachelor's degree.

Besides the above-mentioned information, the employee needs to apply also for a Work visa (“Z” visa) that has to be changed by the Public service Bureau into Resident Permit.

The company, in any case, shall check all the possible linked issues also with the Chinese Immigration Laws.


Job-hopping in China is pretty common, and this situation is mainly caused by huge request for high skilled staff in China. This means that companies need to create good conditions so that their staff is interested in staying with the company. Considering that any possible effective strategy has to be carefully developed and has to be tailor-made according to the company sector, needs, position, and future development strategies, it is important to consider that salary increase is not the sole way to retain talents. A complete proposal which considers also the needs and ambitions of the worker shall be proposed. Certainly, hiring an employee in a widely known, top level brand creates an important basis for the talented person’s mianzi (face) and his/her social reputation. His/her position shall also be “recognized” by printing business cards with their job title, department, and company email address. Career planning in the future and the possibility of developing new skills and competences for shifting into a new position are also means to implement closer relationship between the Company and the working force, because it is understood as a long term investment.

Do not forget to focus also on reward systems of bonuses and additional benefits (such as additional medical insurance, training seminars, managing courses, etc.)

Of course, if a company intends to really invest in talented personnel, any kind of consideration of strategies needs to start from the needs of the candidate, as well as his ambitions and achievements.

External links

Project 2014-1-PL01-KA200-003591