COMPANIES SEEKING staff for their expanding operations in China can choose to hire local people or source expatriates from Hong Kong, Asia and the global talent pool. But defining the best resourcing strategy is not always easy. The question of how multinationals integrate their human resources in China was a subject of debate earlier this month at 'HR management in Greater China - best practices in talent attraction and retention', a seminar at the Hong Kong Convention and Exhibition Centre organised by the South China Morning Post and Watson Wyatt. Focusing on the evolving nature of recruitment and retention in the mainland, seminar moderator Vicky Wong, managing consultant of China executive search firm EPC Consulting, said that in the early years of the mainland's liberalisation most senior executives were sourced from a company's country of origin. These days, however, most senior executives in China came from Hong Kong and China. 'Other executives come from Singapore, Taiwan or Malaysia. Only about 10 per cent of senior managers are international expatriates,' she said. The decision to hire local or expatriate executives is based on a number of factors. One issue driving the current localisation trend in China is cost. Competition from local executives in China is growing rapidly, and companies are recruiting managers who will in the long term help them achieve their business goals and integrate their operations. 'Packages reflect this, with less emphasis being placed on expatriate benefits and short-term contracts,' Ms Wong said. While the desire to localise is a key consideration, the shift to hiring local Chinese executives is not a given. 'The right person is [someone] who will facilitate integration, collaboration, mutual acceptance and partnership between the organisation, its local resources and the global economic community,' Ms Wong said. 'This could be a local or an expatriate.' Successful executives in China must offer specific industry expertise and management skills, and demonstrate an in-depth understanding of the mainland's complex operating environment and intangible management mechanisms. They also need to work patiently to establish a consistent, stable operating model that effectively matches international standards. Ms Wong recommends that recruiters in China review candidates' track records and use situational questions to evaluate their ability to produce results while taking account of local complexities. 'To evaluate a candidate's true capability, recruiters and consultants in China need an in-depth understanding of the operating environment and the challenges presented by specific situations,' said Ms Wong. Local executives are able to build essential relationships with government authorities, suppliers and local clients. As they become more familiar with the operating style of multinational companies, many local staff are beginning to take up senior roles. However, talented local staff are neither cheap nor easy to find. 'The very top layer of talent in China demand salary packages that meet or exceed those of expatriate counterparts,' said Ms Wong. 'These executives are in demand. They are very busy and are unlikely to be looking for new roles. You will definitely need to use an experienced executive search consultant to find them.' With a growing number of technical and second-tier roles being taken up by expatriate staff on local terms, executives need to learn how to manage multicultural workforces and establish a global vision. 'One of my clients has established a sizeable call centre in China managed by a local Chinese general manager and staffed by Japanese, Koreans and Chinese,' said Ms Wong. Multicultural teams present specific challenges. Ms Wong advised: 'When managing a multicultural workforce in China, senior executives should focus on establishing a 'corporate culture' independent of nationality.' This corporate culture can then be used to guide management actions, minimising the need to adopt different management styles when dealing with staff of different cultures. The internationalisation of business in China opens up a window of opportunity for Asian executives who have the skills and mindset to work effectively in the Chinese market. Ms Wong is passionate about educating the Hong Kong community on the operating model in China and the opportunity for Asian executives to develop professionally. 'The recent economic transition in Hong Kong has been very challenging for the executive community,' she said. 'Many have lost their morale and clarity of vision. But Hong Kong executives are known for their ability to adapt and, in China, one of the certainties is continuous and rapid change. 'It is time for Hong Kong executives to develop national, international and global business skills. If we don't, we will lose our unique edge.' Internationalism is key Long-term success in China will come from internationalisation of business and human resources. Managers in China, whether local or expatriate, must learn to manage multicultural teams. They must also establish a stable operating model that works in both local and international contexts. Hong Kong executives must develop global business skills to compete in China.