The study looks into the various aspects of recruitment employed within the Chinese SME sector. It examines the recruitment methods for the higher level management positions. Other aspects of HR such as reward and recognition are also examined as they are closely aligned to the recruitment process. The research looks into the various methods of recruitment and discusses the use of internet as an effective recruitment medium. It also compares the recruitment practices in Chinese SMEs to those of western countries and the US. Leadership and management involvement in the recruitment process is also discussed and analyzed. The integration of recruitment within the HR framework is also assessed and explored. The methodology used for the purpose of this study relies on Secondary data collected from books, journals, magazines, TV interviews, News channels, Internet and online journals. Cases Studies of Chinese SMEs are studied and analyzed before coming to a particular conclusion. Some cases from German and UB based small and medium sector firms is also studied to compare the difference in recruitment practices.
It is a widely held view that an organization's human resources are its most important assets and, among the resources available, may offer the only non-imitative competitive edge (Pfeffer, 1994; Huselid, 1995). Thus, an organization's ability to attract and retain capable employees may be the single most important determinant of organizational effectiveness. As the point of entry for employees, the recruitment function plays a critical role in enhancing organizational survival and success in the extremely competitive and turbulent business. Most companies in China describe the availability of highly qualified staff in the region as insufficient.
Essentially, the recruitment process begins with the identification of a vacancy, after which the recruiter receives authorization to fill it. The job is then carefully analyzed and the knowledge, skills, ability, and experience required to effectively perform the job are identified (Pilbeam & Corbridge, 2002). This implies using existing job analysis data or doing a job analysis. The recruiter may also consider the job environment, as well as the organization's culture and strategy, to determine individual characteristics necessary for a job fit. The recruitmenteffort is then planned and coordinated. Internally, one of the most common methods, especially in Chinese organizations, involves posting vacancies within the organization and encouraging bids from current employees. Externally, the organization depends on employee referrals, newspaper and other print media ads, employment agencies, search firms, college recruiting, and job fairs.
Background to the research
Rising competition in a globalized economy has entailed restructuring in production processes and an orientation towards new technologies and lean management concepts. Owing to these changes, the demands placed on highly qualified staff regarding their technical, organizational and social competence has risen (Buttler & Tessaring, 1993; Kadritzke, 1993; Wolf, 1994). With some delay, which is typical for modernization and innovation processes in peripheral regions, new patterns of job requirements have entered the Asian region. A rising number of Chinese companies require increasingly qualified staff with wide-ranging job experiences.
From 1949 to 1979, China had a completely centrally planned economy; all industries were owned and run by the state. Personnel management was characterized by the 'iron rice bowl', which ensured 'jobs for life' and a 'cradle to grave' welfare policy (Wamer, 1993, 1995). Individual workers were born into, educated by, spent all their working lives in and then enjoyed their retirement.This approach to personnel management was originally copied from the Soviet Union and it often resulted in a mismatch of skills with enterprise needs and, combined with the long-term security of employment, meant enterprises could not use their workforce in order to obtain a strategic or competitive advantage (Child, 1994; Chen, 1995; Wamer, 1999). Since 1979, China has embarked on a strategy of economic reform, based on the 'Open Door' policy and the 'Four Modernizations' (of agriculture, industry, defence and science and technology) (Warner, 1996, 2000). China's economic reform has involved an unprecedented transition from a centrally planned economy to a more individualistic market-based one (Goodall and Warner, 1999; Child, 2000; Nolan, 2001). These economic reforms have necessitated significant changes in HRM, including an apparent move away from central job allocation, lifetime employment, egalitarian pay and political control. Personnel practices, once considered a state responsibility, have now become part of the strategic management of the enterprise (Benson and Zhu, 1999).
Recent reforms now allow enterprises increasingly to recruit, allocate and reward people according to their competence (Benson et al, 2000). The flexible deployment of workers has been enhanced by individual contracting and, to a certain extent, individual compensation schemes, which recognize differences in educational background, skills, training and work effectiveness.
Research aim and objectives
The aim of this research exercise is to find out the reasons that why companies can not recruit right people in China.
The main objectives are:
- To addresses the various aspects (recruitment process, strategy, channel) of recruitment practices for higher management in Small and Medium Enterprises in China.
- To find out what are the process of recruitment and selection and identify which are the crucial parts
- To examine higher-level recruitment related issue within SMEs in China
- To identify the factors that impact companies difficult to find right employee in China
- To bring out some suggestions of recruitment and selection for companies
Layout and structure of the dissertation
The dissertation is laid out in five chapters, sub-divided logically on the basis of their relative importance to the study. Each chapter looks at the research problem in a different perspective though there is noticeable degree of inter-relationship amongst them. The actual study begins from chapter two with Review of Literature analyzing the different recruitment practices and the problems faced by Chinese organizations in getting them deployed. The contents in the research report can be elaborated briefly as shown under the following headings.
Chapter One - Introduction
As the name suggests, this chapter introduces the study of the primary focus of the area of research. It clearly marks out the purpose, aim and objectives of the research giving a reader a guideline as to what to expect. It also gives out the scope of the research and spells out the rationale behind the study.
Chapter Two - Literature Review
This chapter primarily prepares the study for empirical work by looking at evaluations and conclusions drawn on certain theories and concepts to check for similarities and difference made by past writers on similar or related studies. It's on this basis, that later stages in the research are developed. It is therefore, purely a representation of secondary data with various notions. In particular, academic journals, websites and textbooks that articulate models and related theories are used as a reference.
Chapter Three - Analysis of Research Findings
This chapter is devoted to the presentation and analysis of the information collected and the theories studied as a part of this dissertation. Recruitment practices in China are examined in detail. The problems associated with the learning techniques are clearly highlighted.
Chapter Five - Conclusions
After careful examination, evaluation, assessment and analysis of data, in this chapter, the study points out how the aims and objectives of the research are met. It points out how the respective objectives are realized and tries to give an answer to the research question. It also discusses the future trends in recruitment practices and how they might effect the current practices in China.
Chapter Six - Recommendations
The last and final chapter of the study gives recruitment specific recommendations based on the study undertaken. The chapter also discusses the limitations of the study and areas where further research may be carried out.
This chapter provided us with a basic guideline of the things to come. It gave a detailed description of the aim, purpose and objectives of the study and what the study seeks to achieve. It clearly mentioned the scope of the research and areas where the study will not throw much light on. The study now moves forward to discuss the existing theories and concepts related to recruitment. It will also examine the problems associated with current recruitment practices.
According to market experts, there is not only a general shortage of workers in the upper segment of the labour market in the Asian region but also a lack of executives highly qualified in personnel management who can `stimulate and mobilize people', i.e. who meet requirements in socialization and integration for introducing new organizational concepts. A lack of sensibility for a modern personnel policy in many of the traditional Chinese firms; due to cultural provincialism, positions of junior executives and specialists are too often not filled in the best possible way. A core objective of modern economies throughout the world today concerns how to create the conditions for rapid and sustained productivity growth and superior competitive advantage. Nordhaug (2004; pg 6) notes that the recent upsurge in human capital research, preoccupied with the recruitment and selection of employees, lends support to the view that competitiveness is increasingly being built around strong investment in human resources. Indeed, Sappey and Sappey (1999; pg 88) posit that some industrialized societies may well have been impeding their own economic development by ignoring the necessity for a more skilled workforce. The dimensions of human capital encompass not only the level of education but also the work experience of the labour force and managerial expertise.
Staffing is a major strategic HRM practice that helps small and medium sector organizations to have the right people in the right place at the right time. It can be divided into recruitment and selection. Recruitment is defined as searching for and obtaining potential job candidates in sufficient numbers and quality so that the organization can select the most appropriate people to fill its job needs (Zwart, 2003). Selection is the process of gathering information for the purposes of evaluating and deciding who should be employed in particular jobs (Dowling et al., 1994). In China, recruitment and selection are usually not separated. As a filtering mechanism in the selection process, the recruitment function is one of the most important areas of human resource management. Essentially, the purpose of recruitment is to locate and attract qualified job candidates to fill job vacancies. The emphasis is on qualified candidates, since considerable resources may be wasted processing unqualified applicants. Ideally, recruitment follows from a systematic human resource planning process, whereby an organization analyzes and plans for the flow of people into, through, and out of the organization (Dahl & Wels, 2002). Recruitment also goes hand in hand with the selection process whereby organizations evaluate the suitability of candidates for various jobs. Thus, without effective planning systems, organizations may recruit the wrong type and numbers of people, and without effective recruitment, organizations may end up processing and selecting people who are not the best on the market.
Ahmad (2003) argues that there is a major difference between recruitment at middle-management and more operative levels as compared to those in the upper management posts.
One of the other key recruitment issues is whether firms recruit internally or externally.
Internal vs External Recruitment
Economists have long emphasized the importance of the internal labor market in shielding workers from external labor market fluctuations (Reina, 2001). An obvious reason to recruit externally instead of promoting from within is that outsiders might possess specific skills or characteristics that the firm needs (Baron and Kreps 1999). But researchers like Lima and Centeno (2003) argue that outside recruiters often lack the firm-specific investment that the insiders have built up through their careers within the firm. Also, by recruiting externally, the firm decreases the chance of internal promotion. Eg A supervisor might be worthy enough to be promoted to a mid- management level position, but external recruitment not only prevents him from being promoted but also minimizes the future progression possibilities. But, Hays et al., (2004) believe that external recruitment reduces the effectiveness of negative activities and leads the internal employees to substitute productive effort in place of negative effort, which results in an increase in productive effort. It is largely being believed in the research community that although external recruitment hurts the “morale” of insiders and reduces their total effort, the output of the workers actually increases due to this.
Cost saving are put forward as a major advantage for internal promotion. Long-term staff members have a store of company-specific knowledge and qualifications and thus need less investment for initial guidance and training than external candidates; moreover it saves costs for advertising, consultants, and the selection procedure, and it lowers the risk of selecting the `wrong' person (Marchack, 2002). Today, knowledge is very short-lived and increasing requirements of experience and know-how in different settings place high priority on people constantly extending their qualifications, which often best can be achieved by professional mobility (Mullins, 2005). Without sufficient importation of the new impulses and creativity potential given by new staff members, Chinese SME's may run the risk of losing competitiveness.
The economic reform in China has also necessitated significant changes in HRM, including an apparent move away from central job allocation, lifetime employment, egalitarian pay and political control. But, in spite of this, most of the companies in China had long-time employees and higher level vacancies were mostly filled by internal promotion (including transfers from other locations of the companies) according to the seniority rule. But, small enterprises in China were too small to be able to `build up' the staff they needed in higher positions; in many cases it was by coincidence that a staff member was available or not to move up to a higher position that had come open (Jago, 1996). What added to the woes of the smaller organizations, was they did not have a proper qualification program or implemented personnel development programs.
Essentially, the recruitment process begins with the identification of a vacancy, after which the recruiter receives authorization to fill it. The job is then carefully analyzed and the knowledge, skills, ability, and experience required to effectively perform the job are identified. This implies using existing job analysis data or doing a job analysis. The Chinese recruiter may also consider the job environment, as well as the organization's culture and strategy, to determine individual characteristics necessary for a job fit. The recruitment effort is then planned and coordinated.
Recruitment is to attract people that make contributions to the organizations work process. The whole recruitment process can be sub-divided into different stages. The first stage is to determining the vacancies for recruitment that organizations have to make. Pilbeam and Corbridge (2002) also argued that establish a “prima facie case” should be the first thing that organization have to consider. Whatever resignation, dismissal, increased workload or reorganization will create a vacancy. This phase is to help managers to rebuild the structure of the organization and allocate the responsibility.
After a prima facie case for recruitment has been completed, job analysis is the next stage that provides the opportunity for evaluating whether the job has changes. The stage usually begins with a definition of the 'ideal candidate' and a systematic review of the organization's requirements which can also be termed as ‘requirements analysis'. The ‘ideal candidate' refers to the profile of an applicant who would best 'fit' the job. The necessity of ‘requirements analysis' lies in the fact, that it not only helps to understand the blueprint behind the workings of the organization, but also identifies different jobs and how they fit together (Innis and Kleiner, 2002). This stage is for reviewing the knowledge, skills, qualities and competencies required of this job. It also is the systematic process of collecting information about the tasks, responsibilities and contexts of a job. (Pilbeam and Corbridge, 2002)
The choice of a particular recruitment channel represents the second selective stage of the recruitment process. Chinese firm may advertise the vacancy, or it may restrict recruitment to the internal labour market (ILM) or to friends and relatives of employees.
The third stage is the selection stage which builds on from the first and second stage. In this stage, the selection tools are largely based on the results of the job analysis (Bach and Sisson, 2000). At this stage, applicants have to pass through a set of 'filters' such as application forms, reading, writing, personality tests, and interviews with personnel and first-line managers. This stage also provides the basis for all aspect of organizational reviews of performance and training, reward systems, staff development and career progression. In addition, job analysis techniques are a pivotal tool for gathering information that can be applied to expend healthy selection systems (Piotrowski et al., 2006).
The interview is the most important filter built into the procedure. In China, it is biased towards the cultural norms and social values of the interviewer.
Mullins (2005) and Bach and Sisson (2000) stated that job analysis focuses on work-oriented analysis (job description) or worker-oriented analysis (person specification). A job description is used to highlight the features of working environment and present the requirements of the job. Bach and Sisson (2000) agree that job description should describe the objective of the job and tasks to be undertaken under that management position, what the task will be undertaken and the responsibilities. The descriptions should also include the details of salary, interests, working conditions and hours. Perry and Kleiner (2002) point out that drafting a job description is the important step for hiring employee as the job description identifies the skills and abilities needed for the job. A well constructed job description includes technical and performance skills, fundamental or non-fundamental job functions and the qualifications.
In the search for highly qualified staff, companies advertised their job offers in newspapers or magazines that had a national circulation; some engaged in private personnel offices or head-hunters while other went addressed the issue with public employment agencies (Anderson et al., 2004). In addition, information on job openings was commonly distributed through informal channels or preferred candidates were addressed directly. Selection procedures for top positions are most extensive; usually they include the engagement of personnel agents or the placing of job offers in national newspapers or magazines. However, in Chinese organizations top positions generally are not advertised publicly as the number of suitable candidates is very small, they hold attractive positions and do not actively apply for other jobs. At this level the strategy to hire new staff is to address a candidate directly.
Some Chinese SME's may apply more diverse recruitment techniques and several search strategies may be initiated concurrently. Job offers may be advertised in national and regional newspapers or magazines. They normally refrain from employing personnel agents and head-hunters. Exceptions from this rule are made if the open position requires specialists that are very scarce and have to be enticed away from competing employers (Hollenbeck, 2002). Another reason to engage head-hunters or personnel agents is to avoid extensive selection procedures, e.g. if there is reason to believe that advertising a job would generate a flood of applications and the ensuing processing of the applications would be very time-consuming.
The search for personnel can be further differentiated by types of firms. Big companies apply more professional and costly strategies than smaller ones. SME's in China not only avoid engaging personnel agents or head-hunters, but in general apply rather restricted search activities; quite a few merely advertised the job offer in the regional press and informed the regional public employment agency about the vacancy (Polyhart et al., 2003). Recruitment methods and strategies also differed by business sectors. Eg. Manufacturing companies advertised positions at higher levels much more frequently in nationwide newspapers and magazines and relied much more on personnel agents than service companies.
It is the power of the Chinese firm in the labour market that determines the degree of choice which the firm can exercise in deciding upon a particular recruitment strategy. The firms which are in the most powerful position are those which can offer the best remuneration package of wages, working conditions, fringe benefits, and job security (Wallace & Vodanovich, 2004). The second variable which influences the recruitment strategy used by the firm is its 'organizational intelligence'. This term describes the capacity of the Chinese firm to use professional knowledge, to collect and process information, and to work out complex labour market strategies (Bourgault, & Mary, 2001). There are firms which manage to survive only by 'muddling through' whereas others establish professional departments to control external labour markets and to work out strategies for manpower utilization. The third variable which is used to develop the typology describes the technical complexity of the product and the production process. This variable, however, is not used systematically in China because recruitment strategies are only marginally influenced by technical constraints.
The 'selectivity' of the Chinese firm is determined by the specific combination of the various instruments of recruitment. Different firms recruit workers with different levels of skill and background characteristics for very similar types of jobs. Thus, the recruitment strategy of a firm is defined as an organizational decision-making process in which several departments (personnel management, first-line manager) are involved. The choice of a particular recruitment strategy depends upon both environmental constraints and the internal resources of the organization.
New Recruitment methods
A review of the literature reveals that the increased use of IT in recruitmentis having a fundamental impact on all aspects of an organization's recruitmentfunction, including its people, i.e., the HR personnel involved (the recruiters themselves); processes, i.e., the operations inherent in the recruitment function; and organizational structures or forms (Hendrickson, 2003). Contemporary IT systems are leading Chinese organizations to implement new processes in recruitmentand selection. For instance, some Chinese organizations might request applicants to provide on-line biographical information often used to predict employee performance, including educational attainment and relevant job experience (Milkovich and Boudreau, 1997). This information may be used to assess the likelihood of an applicant performing a job at a satisfactory level. The employer may then decide to make an offer of employment to someone passing this stage, or have the applicant take further tests, some or all of which may also be done on-line.
For the recruitment personnel, these new procedures save time and cost. Eg. Advertising costs are also generally lower on the Internet versus traditional methods. One of the other ways in which IT is influencing recruitment in China is by increasing the speed and efficiency in dealing with applicants and clients. The Internet, for instance, is available 24 hours a day, seven days a week. thus making it possible to advertise a position on-line almost instantaneously. As Zall (2000) notes, this alone can save a recruiter as much as five days off the time it takes to fill a job. Furthermore, response time from candidates may also be reduced. But, one has to bear in mind that the success of a just-in-time recruitment system would depend on the availability of relevant labor on the market. In a tight Chinese market, job seekers can search the Web, leave a résumé, and receive a job when a match is secured (Goodridge, 2000). This process is transforming the nature of the employment relationship in China as well. Employment can become transactional rather than extended, with an employee using his/her skills sets to bargain and move from one employer to another so as to enhance his/her career (Piturro, 2000).
This chapter dealt with the relevant theories and concepts that pertain to the concept of recruitment and selection in China. It gave us the outline of the form and structure of the recruitment process and how it is embedded within the small and medium organizations.
The aim of this chapter it to analyze recruitment activities in Chinese SME's and to examine the different recruitment methods used by organizations. The chapter also looks at the effectiveness of those methods. It also explores the issues related with recruitment and selection in Chinese small and medium sized organizations.
Among the selection techniques, traditional practices like 'application forms', 'knowledge or skill tests' and 'one-to-one and panel interviews' appear to be used most frequently by SMEs in China for high level posts. 'Psychometric tests' and 'assessment centres' were also used at lower level but were used least with higher managerial level recruitment. This is a stark difference from recruitment practices in the Western countries like Germany and UK where instruments such as psychometric tests and assessment centres are more commonly used. One of the reasons Chinese don't use it is because of the cost involved as the psychological tests may require the help from trained and qualified staff and requires the help of professional psychologists from outside the firm to administer and interpret the test results.
Different selection criteria should be used for different job assignments. Some skills are general competencies, such as leadership skills, initiative, emotional stability and motivation. These turn out to be of importance for all managers, regardless of the functional specialization. Others are seen to be specific competencies, such as the ability to handle stress, to deal with responsibility and subordinate development skills, technical skills and flexibility. These skills need to be related to functional specialization. In order to assess candidates' suitability for assignments, some techniques, such as a psychological test and traditional interview, should be used in the selection process.
Within a state such as China, cultural traditions and values influence the way politicians, business people, workers and consumers think and behave, while political authorities lay down the legal and regulatory framework in which business transactions are conducted (Kelly and Prokhovnik, 2004: 89-90). Chinese business' traditionalist view is closely interlinked and with families (Ong, 2002; Dahles and Wels, 2002).
The rise of online recruitment methods in China
Traditionally, organizations in China have depended on fairly low-tech methods, including newspaper ads and employee referrals, to locate and attract qualified candidates. Of late, the recruitment function has been undergoing dramatic changes as a result of information technology (IT). While there are still more changes underway, it's clear that the Web has quickly and dramatically changed the way the recruiting industry works (Kay, 2000, p. 72). The Internet is one of the most popular IT methods used in recruiting job candidates. In the past, the Chinese recruiter depended on fairly low-tech methods to produce a pool of potential qualified candidates. Internally, one of the most common methods, especially in Chinese organizations, involved posting vacancies within the organization and encouraging bids from current employees. Externally, the organization depended on employee referrals, newspaper and other print media ads, employment agencies, search firms, college recruiting, and job.
The research found out that recently, many Chinese organizations have begun to use innovative information technology (IT) methods to complement the traditional sources. but larger companies used high-tech methods more than smaller companies. Not wanting to lose out on either the continued importance of traditional methods or the promise of high-tech approaches, many Chinese companies are adopting a dual approach, viz., using both high- and low-tech approaches. For instance, some Chinese SME's firms are placing short print ads for higher level positions in newspapers, with a reference to the full ad on a web site. Some also advertise in newspapers, such as the Wall Street Journal which is usually read by people of higher rank.
How Chinese recruitment practices differ from the rest
Chinese SME's need to review their recruitment strategies and think more laterally to ensure that they're well equipped for the future. In the wake of global credit crisis and not very encouraging growth in economy forecast, it is all the more important that the correct people are hired. This means that the right methodologies are used to screen individuals. The methodologies should not only be the ideal fit for the screening of candidates, but should reduce the recruitment cost and the cycle time. It was highlighted in the review of literature and in the analysis chapter that the cost of recruitment is lower with online tools as compared to traditional methods. SMEs in China need to increasingly adapt the internet as a recruitment tool. This is where Chinese recruitment differs to the ones in Europe and Asia. Eg. A typical higher management recruitment in UK would employ both the online and traditional methods for screening. Online numerical, verbal, reasoning and personality tests are normally conducted as the first phase of interviewing. Once candidates get past this stage, the next stage involves face-to-face interviewing where candidates are asked ‘competency' or ‘scenario' based questions. They are asked to demonstrate their skills at dealing with situations. This is followed by a series of technical questions. Some companies also employ case studies where candidates have to study and analyze the case and answer case related questions.
In western recruitment practices, there is equal involvement of the HR and the line managers. The face to face interview is conducted in the presence of HR personnel and the line manager / director. HR is responsible for judging the psychology of the candidate and soft skills (such as communication, team-working, cooperation) while the line manager is responsible for judging the overall skill set required for the job. They assess the candidate's technical, numerical and other relevant skills through their set of questions. Chinese business practices on the other hand are less reliant on HR and some SME's don't even include any HR personnel in the recruitment process.
One of the other aspects of recruitment where China differs from the Western world is in the concept of taking ‘references'. Countries like Germany and UK require potential employee's professional and personal references. Employees previous employers are contacted (with employees permission) to find out the general conduct of employees. Chinese culture is so dominant in its recruitment practices that they don't feel the need to ask for references. A good proportion of recruits are recommended by friends and family and most often than SME's don't check references. On the contrary, there have been cases in Germany where even after candidates successful qualification through interviews, they weren't given the offer letter until the references were checked. Most employers make sure that they get a reply from candidate's previous employers back before they make the decision to recruit the candidate. So, in a way, references form a part of the recruitment process.
Responsibilities of line management
HR should share responsibility with line management rather than having sole responsibility. Line involvement seems to be stronger in the areas of 'recruitment and selection' and in particular regarding the 'final hiring decisions', 'training and development' and 'workforce expansion/reduction'. This is consistent with the point made by Hays and Sowa (2004) in the review of literature who emphasized that the performance and delivery of HRM is a management responsibility, shared among line (operational) managers and those responsible for running service or staff (related) functions. It was found that line managers had some substantial responsibilities for HR issues in SMEs. This evidence is consistent with a suggestion that some of the principles of Western models of HRM have been adopted in the Chinese organizations. This highlights that there is a desire for strategic integration and some substantial devolution and sharing of decision making recruitment (Jenei et al., 2001).
The study also found out that recruitment planning plays an important part in the recruitment process. A recruitment process which lacks planning can end up spending a lot of money on recruitment activities. Chinese small and medium sector organizations need to position themselves to attract talent looking for new opportunities, and planning is the key (Ito, 2002). Lack of proper planning can lead to high recruitment cost, it could also mean that the SME can run the risk of recruiting the wrong person. Besides, lack of planning can also delay the whole process of recruitment. Eg. A common scenario that occurs within the SME is the leaving of key employees, which places extra strain on those left to pick-up the additional workload. The pressure is then on the hiring manager / director to find a replacement as soon as possible to ensure the remaining employees don't get de-motivated or burnt out because of the heavier workload. However, because of the tight market and the inability to attract the right talent for your business, the hiring manager has to go with someone whom they think will do the job. These kinds of decisions taken in a hurry can prove to be wrong later and the manager might discover that the candidate is not the right fit. This might mean them going back to the drawing board after spending considerable time and money recruiting someone who was inappropriate for the business.
Critical Success Factors
Recruitment should be an integral part of company's strategy - People are company's valuable resource. Every company or organization should have a “People Strategy” involving strategies for recruitment and selection of all personnel (Walsh, 1998; pg 33). In order to make selection effective, it should from part of organizations corporate strategy and should be pro-active. It should be in consonance with the culture of organization national and regional sub-cultures and well designed to suit needs of organizations.
The recruitment process should always start by reviewing the organization structure. From a human resources perspective, the organization structure defines how the business operates, what roles, skill sets, knowledge and competencies are required for the effective operation of the business to meet the business strategy. Key to recruitment is also to ensure that the financial/revenue hurdles is met to enable the hiring manager to introduce new employees to the business (Sullivan, 2002). A established Chiense SME should also keep reviewing the organizational structure on an annual basis against their business strategy and financial goals.
Other aspects of HR such as reward and recognition program, is also aligned to recruitment. Sullivan (2002) states that the days of offering only a salary package are gone and Chinese SMEs need to be willing to recognise and reward people for their good performance. The program needs to ensure that rewards are consistent with the business strategy and it is not all about financial gain. It is more about what drives the employees. The reward structure also reflects the type of type of people the SME is trying to employ to meet the needs of the business. This will help in the employee branding of the organization and through this program the organization can provide a program that will encourage the staff to work efficiently and strive for higher levels of performance.
Recruitment problems in China
Chinese capitalism combines ‘modern capitalism' with ‘traditional' Chinese culture. Leung (2004) discovered that that most of the SME managers, still hire new employees on a personal basis or through word of mouth, prefer to use their business network, which largely consists of former colleagues, and study-time friends. Associates in higher level positions were taken because hiring managers knew these individuals professionally, valued their skills and were used to working with them.
Some factors that typically discourage interest in public sector jobs in China include slow and bureaucratic recruitment processes, narrow job descriptions, the perception that seniority prevails over merit, and excessive rules and regulations (Langan 2002). Chinese public sector recruitment has a notorious reputation for being slow, unresponsive, bureaucratic and passive. Too often, public agencies have assumed that qualified applicants would clamor for job openings. These agencies therefore are seldom engaged in aggressive outreach programs or other ways to attract superior job candidates (Williams, 2001). In many cases, this reactive approach results from the centralized and control-oriented way that HR services are delivered. This often means that applicants enter into public through a single point of entry in China where a jurisdiction's entire recruitment function is handled by one or two agencies.
The desk research revealed that most SME's in China applied recruitment methods such as internet, agencies and advertising. But, instead of the various recruitment methods employed, employers are still finding it difficult and time-consuming to recruit the right staff. It is not much different with the employees as they are finding it hard to get the right jobs. All this suggests that something somewhere is not working within Chinese SME's. Some of the factors that are leading to such a phenomenon are
- Excess importance on qualification and professional courses. Some SME's pay excess emphasis on manager's academic background and the qualification they have acquired over the years. Professional qualification and certification are key recruitment attributes for these companies. The premise of their belief is that people having higher education will be easy to accommodate within the confines of the high job because of their implicit knowledge. Although, education should be a major recruitment attribute, it should not be the only variable which organizations should consider while recruiting. This is because, many skilled individuals may have the experience but not the education. Equal weight should be given to both class-room and on-job learning.
- Some Chinese SME's, on the other hand, focus just on work experience and not education. This is mainly driven by the additional training and development costs which SME's have to incur in order to train the individuals who have not worked under organizational settings. These SME's focus on the short-term value they get out of the recruits. At higher levels, recruits should be backed both by academic and professional knowledge and experience. Their skills should be in line with the job at hand and should match the strategy and goal of the concerned organization.
- Lack of alignment also results in wrong recruitment decisions. Chinese organizations don't have a vision on the evolvement of a role. They recruit to fill the needs gap that may have arisen due to someone leaving the role. There is a clear lack of planning because most of the recruitment is only to fill the vacancy. Beside, companies only recruit people for the job; they do not have any employee with ability and employee development plan. This is the most important reason that companies frequently have to recruit personnel and fail to select a right person.
The desk research revealed that in order to set out a good job description, Chinese firms employ an intelligent employee technique. They question their existing management staff in similar positions to describe their daily tasks which is then used to construct a valid job description. This also helps the new employee to have a better of the job requirements. In addition, it also plays its part in understanding the workings of the organization and the associated challenges. But, this is not the case with every SME as most SME's seem to have a generic job description which is seldom revisited. It was found out that by and large firms did not pay much emphasis on the documentation of job description. This is not different to the western countries and the US who neglect the job description documentation as well. One of the reasons for this was the multi-tasking and scope of managerial responsibility. This made it difficult to capture every aspect of the high level job in a one or two page description document. Also, the changing nature of work role is partly to be blamed. The changing role requirements entailed that people at higher levels need to possess a range of skills. Eg. A marketing manager for a small financial services firm in China needs to understand the risk and credit factors, have a sound knowledge of marketing finance and how marketing decisions impact the management accounts and have a firm understanding of marketing analytics to determine the effectiveness of their campaigns. The multiple talent and the continuous changing job role and responsibilities now require a broad skill set which is difficult to put down on paper. But, whatever the difficulty in writing the job description, SMEs must have a close match job description for higher level staff which gives them an idea of what their responsibilities are. The best way of doing this is to ask the relevant staff to write down their responsibilities and use that as a template to develop the description.
After analysis and in-depth examination of recruitment practices in Chinese SMEs, the study now summarizes the important findings in the form of conclusions and gives the appropriate recommendations to overcome the shortcomings of recruitment methods employed. It also points out the scope of the research and the areas where further research may be undertaken.
After careful examination, evaluation, assessment and analysis of data, it's the prerogative of every study to point out how the aims and objectives of the research were met, which is what this chapter aims to do. It points out how the respective objectives were realized and tries to give an answer to the research question. The chapter also encapsulates specific recommendations and discusses the limitations of the study and areas where further research may be carried out.
Recruitment in general and in SME's is a costly affair and a very time consuming process. This means that it is even more important to embark on the correct methods for recruitment. Recruitment structure is crucial to SME's as it effects the type of personnel employed. The structure and form of recruitment is also guided by recruitment policy. Every Chinese SME has an established recruitment method policy which represents management's commitment to recruit the right employees.
It appears that both modernity and history still co-exist in the business life of Chinese. As mentioned earlier, Visscher (2002) argues that the ambiguity between modernity and tradition was present in Chinese SME's. Yet, a trend also seems to be developing that goes beyond historical continuity, having to do with the unprecedented advancement of Western business morals and mentality. The study demonstrated that families have an ambiguous place in Chinese Small and Medium Enterprises. Although China has made rapid progress in the recruitment aspect of HRM, the government administration and control over HRM matters still remain strong. Due to which, some small and medium sector organizations still lack the necessary autonomy to implement strategic HRM. From the research conducted, it can be concluded that China's recruitment practices for SME's for higher management level is a hybrid of the traditional personnel management and modern HRM. Government administration and control over recruitment matters still remain strong in China and organizations still lack the necessary autonomy to implement strategic HRM. Western-style recruitment techniques have not yet replaced existing recruitment methods. The transfer of HRM and recruitment practices in general has only been partial and has been absorbed into the Chinese managerial culture with Chinese characteristics.
We have seen that families have an ambiguous place in Chinese Small and Medium Enterprises. On the one hand, the ‘traditional' element of family presence within business is praised and honoured, on the other hand, it is also seen as archaic and embarrassing. Hiring practices and succession in Chinese Small and Medium Enterprises reflect this paradox as family involvement in business is seen as a source of both pride and shame, as an expression of a lived culture and an outdated system of organizing business. Both modernity and history still co-exist in the business life of Chinese. Chinese culture is affected by global trends where modernity and tradition are closely interlinked; and the boundary between the old and the new, local and global, is continuously being renegotiated and redefined by social actors. These effects are felt through the resulting practice of hire, which is actually dictated by a mix of economic necessities and cultural loyalties or traditions.
Since recruitment and selection are the first stages of a dialogue between applicants and the organization that form the employment relationship, managers / recruitment specialists in China need to realize the importance of the formation of expectations during the recruitment and selection processes. If they fail to do so, this may result in the loss of high-quality applicants and set the initial level of the employment relationship at such a low level as to make the achievement of potentially desired HRM outcomes most difficult.
Personnel/HR managers should recognize that the types of selection technique they utilize to select the right employees for the jobs are critical to their firms' success. The misuse of any kind of instrument may be costly to the organization and may also be demoralizing to the employee who may find himself or herself in the wrong job and consequently de-motivating to the rest of the workforce. Incorporating interviewing techniques that deal effectively with applicant misrepresentation is just as important as identifying the correct information targets that actually predict the problem.
Organizations have to bear in mind that most HR activity are integrated. Similarly, the recruitment function is closely aligned with the organization's performance management framework. It was reflected in the review of literature that new talent and existing employees value the opportunity to reflect on their performance, be provided with opportunities to provide feedback from their perspective, know where they are heading within the business and the necessary steps to achieve progress. This is where the importance of performance management comes in because it actively engaged the employees and they are far more likely to take ownership of their development and focus on what they need to do to progress to the next level. From an organizational perspective, it is important to prioritize learning and development opportunities based on return to the business.
Employer branding also plays an important part in recruitment. Employer branding is about articulating what the organization has to offer to its employees and how they offer it. It helps in recruiting the right people and makes the right people apply. But, for an SME becoming an employer of choice might involves a lot of resources and, depending on the size of the business, may not be feasible.
- Chinese organizations have to realize the importance of online recruitment. This will help them have better access to applicant data fostered by IT. Such access may allow direct contact with applicants, thus reducing bureaucratic administrative procedures, and most likely increasing efficiency. IT can also influence organizational structures through its ability to facilitate intra- and inter-organizational teams. One of the significant advantages of IT in recruitment lies in the ability of new systems to generate a large applicant pool. Ironically, for many HR in Chinese organizations, this boon may pose an inherent challenge, via., the allocation of scarce time and resources needed to effectively process the volume of inquiries and résumés. But, for recruiting managerial staff, Chinese SME's should not depend on the Internet for all their recruits: rather, they should diversify their advertising efforts to include the traditional applicant sources as well. Furthermore, employers should ensure that all instruments used on the Internet, like those used in traditional systems, have sound psychometric properties; that is, they must be reliable and valid. For many recruiters, Web-based prescreening tools can help in assessing a person's "potential fit" with the organization. This is a relatively inexpensive alternative to hiring a good testing consultant or having an HR department that is dedicated to serious testing.
- When making the final hiring or selection decisions, HR managers/specialists in China should look for potential candidates whose qualifications, characteristics and work-related values and attitudes most closely conform to the requirements of the open positions and who can fit well with the organization's needs and culture, and can effectively carry out required tasks and collaborate well with other colleagues.
- On the whole, HR managers/specialists need to ensure that the type of recruitment and selection practices they adopt is coherent and consistent with their firms' business strategies and with other associated functions of HRM such as HR planning, training and development, pay and benefits, etc. Recruitment and selection need to be considered as an integrated process rather than a marginal, ad hoc activity.
- Job description forms an important part of the recruitment activity. Most often, it is found that SMEs don't have position description for higher managerial posts. This stems from the fact that because the higher management are involved in so many different organizational activities and have varied functions and decisions to take, it is difficult to capture the scope of their responsibility in the form of a job description. But, this should not be used as an excuse for Chinese SMEs for not having any description document because the candidates they are looking to screen or interview will want to look at some kind of job specification document. It is therefore highly recommended to develop descriptions for all the roles that the company is looking to hire. The description should encapsulate things such as the day-to-day expectations of the role, their reporting personnel, the skills, knowledge attributes and competencies required to perform the current role. Besides, if the organization has an existing description, they have to be reviewed and updated as a part of the recruitment process. All too often, organizations do not revisit the job description and because of this the description does not reflect the responsibilities correctly.
- As a part on internal recruitment, SMEs in China should ensure that they set aside dedicated times throughout the year where they are able to provide structured formal feedback to their existing employees. This should involve a review of performance, setting a development plan to assist in meeting the requirements of the employee's existing role, and grooming employees for the next step of their career progression within the business.
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