The Expat’s Competitive Edge

Technical skills, cross-cultural knowledge, and language abilities can help expats in China find positions in a competitive market.

By Abraham Sorock 

While foreigners once occupied a privileged position at the center of business in China, companies today are dedicated to hiring and training local talent to staff their operations. This does not mean, however, that opportunities for expats in China have dried up. Just as in developed markets elsewhere, expats in today’s workforce in China have a role to play in international business including communications, operations, marketing, and research.

As founder of ATLAS-China, a boutique recruiting firm connecting companies to foreign talent in China, I have found demand for foreigners across industries and within Chinese and international companies of all sizes.

Talented expats with technical skills, cross-cultural knowledge, and Chinese language abilities can provide a competitive edge to a variety of companies in many industries. Here are the latest trends you need to know about what companies are looking for and how foreigners are adapting to the changing needs of China’s job market.

Expat demand

Demand in China for expat hires can be divided into two main categories: Specialized technical talent and cross-cultural roles.

The first category is the same as it has been for over 30 years. Specialized technical talent brings otherwise unavailable expertise to China’s workforce. This market has become increasingly marginal over the years as the domestic Chinese labor force has developed. While there are still roles for technically skilled foreigners, for whom any knowledge of China and Chinese is incidental, the scope of these roles has narrowed as China’s education system has improved and the number of Chinese returnees from abroad has increased.

The second category, representing a growing market, comprises newly created cross-cultural roles that have come into focus since the Beijing Olympics and the global financial crisis. The development of these roles reflects increasing sophistication on the part of companies that recognize that culturally rooted communications difficulties between Chinese and Western stakeholders can be a predictable and avoidable business challenge.

It also reflects the arrival in the talent pool of what Andrew Hupert calls the “new China hands,” foreign professionals who combine fluent Mandarin with Western business instincts and training. These professionals combine local market capacity with an international mindset, and both foreign and local companies in China are hiring them for a variety of business functions.

Western multinationals

Despite Western multinationals’ well-documented and thorough push for local talent in China, firms make room for new expat talent where it complements their overall strategy.

Will Broer, a strategic marketing specialist focused on channel management for DuPont Pioneer, initially joined the company to help with intellectual property protection. He quickly saw his portfolio expand to address other issues that require a “cross-functional approach and… somebody who can talk to everybody from the US headquarters all the way down to a local sales rep in Guangzhou or Linxia or Hangzhou.” Broer builds profit by bridging the gap between Chinese and Western stakeholders who would otherwise have to communicate through several degrees of slow, costly, and imprecise intermediaries.

International service companies are also experimenting with expat talent based in China’s second-tier cities to grow their business capacity beyond Beijing and Shanghai. Real estate leader CB Richard Ellis and public relations giant Ogilvy both relocated bilingual expats to Chengdu this past year to better serve the local needs of their clients, and the trend is likely to continue as second-tier cities develop their domestic markets for international projects.

China outbound

The largest prospective market for foreign talent in China is domestic companies looking to expand abroad. Chinese companies in any number of industry sectors want to brand, sell, invest, acquire, and incorporate abroad, and bilingual expats are in a position to greatly support these efforts.

Perhaps the best-known example so far of a Chinese company that has built an international team to realize its international ambitions is the Dalian Wanda Group. After its historic acquisition of AMC Entertainment Holdings, the company built an in-house team of expats to perform investment analysis on prospective corporate and real estate projects. In recruiting their team, the Wanda Group required applicants to bring strong Chinese language skills in addition to native skills in a target language, including English, Spanish, and Russian.

With Shuanghui’s recent acquisition of Smithfield Foods, it is likely that a few permanent positions will be created for bilingual expats to help manage that relationship. Given that a recent APCO survey found 45 percent of Chinese business leaders in the United States considered cultural barriers to be a “major” challenge for their companies, other Chinese firms either considering or in the process of making Western acquisitions will likely also find value in hiring bilingual talent from the destination market into the project at an early stage.

One Chinese sector that has already done a remarkable job of integrating international talent is the technology industry. Companies like Baidu, Alibaba, and Lenovo have a track record of successfully recruiting top foreign graduates into their ranks to support their international communications, operations, and research and development work.

Boutiques and startups

While large multinationals are by their nature more visible, internationally minded Western and Chinese startup companies and boutique consultancies are also employing expat talent in significant numbers for work across a range of industries.

One boutique American EB-5 investment consultancy, which connects Chinese investors to job-creating projects in the United States, employs bilingual expat Dan Redford as their local representative in China. Redford’s work finding clients and managing projects for Chinese investors on behalf of FirstPathway Partners requires him to bring the uncommon mix of local American project expertise, Chinese language communication skills, and in-country experience.

On the Chinese side, app market Wandoujia hired Kai Lukoff to market their services to Western partners and develop their international product. While he is the first foreign employee to join Wandoujia, he found it easy to fit in with the company’s ambitious international culture. “Two of the founders and the CEO are from Google China,” he noted in a recent interview. “I think their vision… is to build a global company and so for me, that was a good fit.” Lukoff’s team is growing and he will create another job for an expat before the end of this year.

Regardless of whether these and similar firms are household names for expats, they play a valuable role in the international China business ecosystem by helping Western and Chinese companies, investors, and consumers connect. Human resources constraints are often a critical barrier for these companies as they find it difficult to grow quickly enough to meet demand without an established brand name to passively attract top talent.

Raising the bar for expat hires

While not all companies are building international teams in China today, there are at least a few companies in every industry with global operations or aspirations that find value in hiring expats with Chinese language skills and the proper industry background.

The threshold for ability to create value as a foreigner will continue to rise. Like in the United States, companies’ default answer to the question “do we need to hire a foreigner?” is usually “no.” Even facing cultural challenges, unless evidence for a hire is overwhelming, firms would often prefer to muddle through with local staff than take a risk with foreigners because it is administratively easier and less costly in the short-run to do so. However, this stance is likely to soften over time with the emergence of new China-focused and qualified foreign talent and the persistence of linguistic and cultural barriers to business success.

Rather than viewing staffing as a zero-sum game of expat versus local hires, the most confident and forward-thinking companies in China use foreign talent to complement their local staff, press their international competitive advantages, integrate their global operations, and fully leverage their capacities to win in business.

[author] Abraham Sorock ([email protected]) is founder of ATLAS-China (atlas-china.com), a staffing firm that helps companies in China recruit foreign talent and build international teams.  [/author]