Hiring and Managing Chinese Staff As a Foreign Company

Today we have a hot topic – how to recruit and manage Chinese staff. Monica Chao came on a live webinar to share her strategies and ideas on how to best handle that. She has experience managing teams both on the USA side and China side so this is a priceless session that we hope you enjoy. The video recording has the full “meat” but Mike went through some highlights in the writeup below. Enjoy!

Originally from Taiwan, grew up in Shanghai, went to college in Wuhan, China and then did a startup at Chinaccelerator – how did you end up in SF? 🙂 Now an MBA grad from Stanford! Very cool background.

What is your current role now, do you work in cross-border teams now?

Monica is working at Chegg now doing a lot of ecommerce business and gaining massive experience. She has experience in both the China side hiring and managing staff in her startup times, and now working in USA working primarily with a USA team. In her time in China, she was the “bridge” between her two sides of the team – working with the Chinese speaking side and then translating and communicating that information to her English speak side of the team. She explains how challenging that was and that if she were to do it over again she would have the whole team need to operate in one language. I totally agree with this!

What are Chinese employees looking for when seeking a job.; Let’s say these are local Chinese employees they are seeking, and the company is opening an office in China (foreign company). We discussed how Chinese staff need more stability, that stable monthly salary check. It is a mix of trust and culture. There is also a lot of pressure from their families to buy a house (which is so expensive now) as well as just the idea of this startup equity actually being worth anything. Monica and I explained that while it is frustrating for startup founders to recruit team members in China with “selling the dream” of their startup, it is just a reality and you need to put out the money upfront for most Chinese recruits.

I also mentioned that many times younger Chinese do want to work for Western companies. Maybe to practice their business English, but also experience the culture.

What are the advantages of being a foreign company in China when employing people?

We laughed that this is a tough one! We’ll get to disadvantages next – but stay with positive first. If you have a “white face” (like Mike) it helps at the beginning. Its sad, but the truth. Maybe its media, or whatever you can suggest is the reason, but really Chinese do “look up” to a company that has white faces in it. I explained I am not proud of that – that I (Mike) want to be judged and assessed on my ability rather than the color of my skin or my looks – but we need to be aware of that. But Monica explained this is only a short term and temporary advantage. She went through a case study of her Chinese startup getting taken advantage of with a top gun sales hire who was avoiding showing results and dragging things out as much as possible.

The main point is to “keep your guard up” and it is like a chess game. Think long term, but watch the short term moves.

Definitely quite a few disadvantages as a foreign company in China when hiring. The main thing is, do things by the books. Sure, friends and locals may say no need to pay all those upfront fees opening companies and paying taxes – but when you grow and the books are looked at, it will be more and more of a problem.

Leverage your advantages of being foreign (exotic, specialized) but really you need to act local as much as possible when running your China business. We discussed the negative hiring issue Monica had in the question above.

What kind of mindset shift should the company have?

Due to the education system, many Chinese need clear instructions and clear idea of what their job is. Especially in a startup environment this can be frustrating, as you need to act fast and things are changing so often. But Monica and Mike discuss strategies for managing KPIs. I really enjoyed Monica discussing how she coached a new staff who was really introverted and shy about how to do sales for their startup. This helped him build up confidence and become their top sales rep! So the point is, you need to be patient, and willing to invest in the long term development of your staff. If you can do that, you’ll build a strong culture and a great team (well, probably anywhere, not just in China!)

So you’re a good example, you’re in SF – do you have a Chinese new year holiday? How do you deal with the supply chain in China?

This is always a challenge as business often goes on as usual in the rest of the world during Chinese New Year (which is often at the end of Jan / Early to Mid Feb) and is frustrating for global businesses. But you need to update your calendar, in Google calendar you can turn on Chinese holidays, and be respectful. Read up with some simple Google searches on some of the holidays. Qing Ming, or Tomb Sweeping holiday just passed, and people had to work on a Saturday to make up for an extra holiday on Monday. Strange, but like many things in China, you just need to adapt.

Is it possible to have a Western-ized office in China?
Should a foreign company “be foreign” or “be local”

There are good and bad about being seen as a foreign company in China. But the reality is, it is hard to hide the fact. So it is best to embrace it. Show them there are chances to go abroad, to learn from other staff with international experience.

Yet at the same time, from Mike’s experience, some Chinese prefer to work in a Chinese office environment. They want their own space, they want structure and clear tasks. If you insist on being Western (openoffice, flexible tasks) then make sure you hire with that clearly stated before they start.

Should you have a Chinese partner for this? Many books I read say you should have a Chinese co-founder or partner on the ground who knows how to deal with and manage Chinese employees – what do you say? This is extremely hard and why so many books say to have a Chinese co-founder. The multiple decades of time that a local Chinese has gone through growing up in China learning about the ins and outs of Chinese culture and society is not something you can easily learn. Monica explains that even if a foreigner speaks Chinese and knows the culture, there will be situations in managing a staff where they just can’t relate. I have to agree.

How to deal with a US based team and a China based team? So challenging with – basically every difference I can think of – communication tools, style, timezone, culture, location, etc. Is it something to attempt, or keep these departments operating separately?

Monica and I both feel that you have to have a China department and a overseas department. To have a shared department is so difficult – just on the time zone differences along. On top of that – the internet in China is cut off from the rest of the world. And the culture. Try to include the China office with the rest of the world but don’t have it setup so that regular communication multiple times a day is required – let them operate rather independently.

How can you better integrate Chinese employees with the international teams?
Monica hit it right on the head – you need to not use bars and happy hours to build teams in China. Many Chinese don’t socialize in loud bars. Especially if you have development team, they will enjoy a board game night at a tea house, or a movie night. Something more quiet, even a dinner together. Even a video game night. Of course it depends on the people there – but the Western culture of a happy hour for the staff will not be as popular in China.

Firing a Chinese staff – any tactics that may be different – it sucks anywhere in the world, any special insights for china?
Hire slow, fire fast is the keyword here. We explained some stories of having to fire a few times in this webinar. Mike shares his learning experience with a designer he hired back in 2009 and how he was lucky to have clear and signed contracts from both sides to protect him when that ex-employee reported him to the labor bureau.

Chinese New year bonus – any tips? I know this is a stressful one for many foreign companies.

Monica says even in San Francisco her company gives out red envelopes (granted they only have a few bucks in them) – Mike explained his blog post on how much to give Chinese during New Year is a favorite amongst readers https://www.globalfromasia.com/chinesenewyearbonus/ for that full blog post.

It was great to have Monica on the show. She is fully supportive of the Cross Border Summit and while she almost was able to make it, we have her written down for 2018’s. Actually, there is talk about doing one on USA side and she is a great person to be involved in that – so stay tuned.

Thank you for reading and enjoying this rough outline of what we discussed. If you would like to get updates on future live webinars, sign up for our list over at www.globalfromasia.com/webinar and see the full schedule of upcoming events.