Recruiting Techniques in China: We got options in China!

In October I wrote about getting creative with compensation in China, see Get Creative in China!

– I am happy to report that since I wrote that piece I have seen a lot of clients coming up with more creative ways to get money into the pockets of their employees without breaking their internal equity and by using more advanced compensation plans. Looking forward I would say the days of the base salary times thirteen months packages may be soon coming to an end.

This year I have seen the emergence of the spot bonus, an increase in signing bonuses, and more and more companies getting creative with housing. In the last two months I have been dealing with several companies that are using stock options to attract talentEven State owned companies are getting into it: www.chinaeconomicreview.com/dailybriefing/2006_02_24/State_firm_executives_to_get_stock_options.html.

I wrote about some of the more common issues that come up here, and some feedback I received here.

In all I have heard a great deal from candidates of mine who (for whatever reason) read my blog and the reactions have been mixed. It seems that at the highest levels options are seen to hold good value and be a great want to round out a package that is already well over US$ 150K per year. At the lower levels of management options are viewed with more skepticism. This will change with time and when employers and recruiters have more success stories to point to in the China talent market. But it is still early and the following quote sums up my experience pretty well:

"Stock options don't really work with young people," explained one HR manager. "Saying we'll give it to you in five years doesn't fly. They want options and cash." Ongoing education about the value of stock options will likely increase their usefulness as a retention tool, particularly in the case of employees who have remained with a company for a few years and have seen the value of their stocks appreciate.

Their efficacy as a retention tool aside, stock options increasingly form part of compensation packages at major multinationals. Corporate policy often dictates who receives stock options; in some companies all employees get options, no matter their level, while in other companies options are reserved for upper-level management. Most companies that give options award them according to position and performance.

– China Business Review (http://www.chinabusinessreview.com/public/0111/melvin.html)

Cash is still king with candidates at the moment and while options may be a great way to round out an already great package they are not, in the current market, enough to attract the best people. Talent is short and candidates have a lot of options when it comes to employers. And at the end of the day what matters most, in my humble opinion, is a comprehensive compensation package that is competitive in the market. Most of the candidates that I deal with are looking for short-term gains with a long-term potential. With respect to stock options it may take some time for the market here to develop to a point where they are adding value as a compensation tool.

(Brian Fenerty has experience recruiting in candidate-short markets in Asia, North, and South America. For more insights specific to recruiting in China please visit his blog at: www.recruitinginchina.com.cn - or visit Brian on LinkedIn at: http://www.linkedin.com/in/brianfenerty )