In an increasingly competitive labor market, equity awards, higher salaries, and upward mobility can help foreign companies attract and keep top talent. But Chinese restrictions on foreign companies’ equity awards — such as stock options — can hobble US companies’ compensation competitiveness.
New rules to promote local innovation in Shanghai, which has nearly 15 percent of China’s total foreign investment, may provide new tools for US companies to attract foreign and local talent. The municipality’s new 22 Measures, released on May 27, include new guidelines to ease the residency permit application process for key talent and increase the maximum work period for qualified technical experts.
HR managers face a litany of hurdles including rising wages and new laws and regulations, along with the ongoing challenge of attracting and retaining talented workers and managers. At the same time, mass layoffs and employee relocation issues in China have become more common as companies balance an increasingly competitive marketplace with slowing economic growth.
More and more US companies have active research and development (R&D) operations in China, and many have seen these operations evolve from small groups primarily focused on product localization to globally significant operations conducting cutting-edge R&D for the China market. In a 2013 KPMG report, for example, an estimate was given for over 1,300 R&D multinational-operated R&D centers in China, a number that has likely risen since then.