what we think

By Robin Tabbers

As we wrapped up the year, let’s unwrap the intricacies of human resource management in the dynamic landscape of China. From strategic talent acquisition to compassionate workforce transitions, this guide is your festive roadmap for mastering the art of hiring and firing in China.

Talent acquisition: setting the foundation for success.

Building a stellar team is the cornerstone of success, especially in the multifaceted world of China’s marketplace. Below, I outline a roadmap to strategically navigate talent acquisition:

• Local talent dynamics: tap into local insights by strategically onboarding individuals deeply embedded in the Chinese market. It’s not just about fitting in; it’s about levering the unique perspective that only local talent can bring to the table, especially industry knowledge as well as Chinese consumer/customer knowledge. Headhunters and recruiters can be helpful, but so can your network be: consultants, chambers of commerce, suppliers, fellow nationals, consulates/embassies, 51job. Consider starting without a general manager, and first focus on your key needs (sales, supply, service, content, marketing?), to avoid that your China team becomes an extension of your general manager, and you face less loyalty towards HQ but instead a team of a puppet master.
• Background checks: with cities as big as European countries, and subsidiaries bigger than many European SME’s, employers in China can be easily bamboozled by CV. Background checks on persons as well as their past work experience are important. Better be Penny-wise than Pound-foolish.
• Onboarding Excellence: Create an environment that seamlessly integrates new hires into your HQ’s corporate culture while equipping them with the tools and knowledge for success with direct communication lines from the start and moving forward. Above all, use proper employment contracts and staff handbooks with your company rules that project company in case of terminations. Without a handbook that was adopted via special democratic procedures, your company has not officially any rules so there are no rules for the employee to breach – not even the ones we all deem obvious. You’d find yourself in the paradox of: “the first rule is that there are no rules”. It leaves you with few grounds for lawful termination.

Workforce transition: various approaches to employee exits.

Change is inevitable, and handling employee exits demands finesse and strategy. Let’s explore a comprehensive approach to workforce transitions.

• Legal compliance as bedrock: start by understanding the nuances of local employment laws. Strict adherence to regulations regarding notice periods, severance packages, and termination procedures ensures a smooth and legally sound transition.
• The power of documentation: while paperwork might seem mundane, meticulous documentation of employee performance, feedback, and disciplinary actions services a strategic asset, in addition to the required employee contract and staff handbook as a backbone.
• Exit interviews: turning goodbyes into learning opportunities can be a good idea under the right circumstances – you know your staff best. Conducting exit interviews with empathy and a genuine desire for feedback may result in transforming an employee’s departure into a learning opportunity, gathering insights that contribute to continuous improvement within the organization. Moreover, the workforce pool of English speakers that you are fishing is, is relatively small so your reputation could proceed you at times. However, not all departures qualify for a soft touch; when and where needed, you may need to seek legal counsel to guide or lead a termination negotiation.
• Organizational stability via transparent communication: communicate openly and transparently with the remaining team members to maintain organizational stability. Well – managed communication fosters trust and reinforces a positive workplace culture.
• Prepare for the worse: despite your good intentions, things may not always be as they seem or go as you plan; prepare draft and channels to inform stakeholders right after the separation, cut of IT access, safeguard company assets, close off internal social communication channels, and withdraw physical office access.

The Chinese Labor Law provides strong protection for employees. If an employer’s wants to terminate the employment contract, lay off employees or liquidate the company, employees have a right to be compensated and informed in advance. Below, I outline 3 key takeaways you should consider:

• If the employee terminates the contract (i.e., resigns), only a 30-day notice should be given (3-day notice is required during the probation period, and a prolonged notice period for managerial employees may be agreed upon).

An employer cannot easily terminate a contract, unless one of the limited lawful reasons to do so applies to the situation, in which case an advanced notice and compensation should still be given. Only in case of the employee’s serious misconduct, direct dismissal without compensation may occur. As the interpretation of these limited number of lawful reasons are quite arbitrary, there a lot of room for negotiation and interpretation on both the side of employer and employee. This make that settlement is a likely outcome in case of termination in China. The stronger you as a company make your case, the less you will pay in settlement negotiations. Needless to say, that good contracts and employee handbooks, as well as a good lawyer to negotiate with your employee could at times lead to considerable cost savings and better control of the situation.

Navigating the intricate HR landscape in China demands strategic depth and cultural finesse. By incorporating these detailed strategies into your HR playbook, you position your organization for sustained success in the ever – evolving Chinese business terrain.

For more tips, I’d recommend delving into our other employment articles here.

For more about how we can help foreign companies navigate the intricacies of employment in China, please contact [email protected] or your usual contact at R&P.  We are here to help you make the best decision.

This was originally published on LinkedIn as an edition of Robin's China Business Navigator Newsletter. Subscribe here to get regular updates.