Is the Expat Job Market Shrinking?

For some foreign companies that are well established in the Chinese market, the move towards localisation is nothing new. Large multi-nationals with an existing focus on development and expansion within the Chinese market have been growing local talent for sometime. “If you look at industries where big companies have been here for a long time and developed lots of talent – and the obvious ones would be Proctor & Gamble, Unilever, Coca Cola and L’Oreal – they have massive graduate intakes every year of local Chinese, and these companies have developed that talent for years and years. I can’t think of any junior to mid-management expats working in those companies. It’s all localised,” Preston says.

The extent to which a company can implement localisation is highly dependant on their size and configuration. Larger MNCs can support a high level of localisation because they have market-tested company infrastructures and are backed by institutional knowledge and experience, which enables them to accept a high volume of local hires. Conversely, smaller, less experienced firms may be more tentative with their implementation of localisation measures.

Although localisation is the prevailing policy for junior positions in big companies, the demand for foreign talent at executive level is still present. In part, this is the result of China’s economic growth outpacing the development of local talent, even in the established companies that have been around for decades.

“At the top level the game is different. What you need are executives who not only make decisions, but also implement decisions,” says Dieny. “What you want from a top executive is the ability to take the company forward to the next step. That’s an area where the Chinese don’t have much experience as yet. They’re very good at playing second or third roles, where they are still learning and following.” But that trend too will change. The growth and development of local talent as a key part of the role of many executives here in China, and in years to come the face of the top decision makers will skew increasingly local.

But if they have never touched Asia, if they have never done any business in Asia, if they’re completely new, then we generally think they have no chance.

Despite the trend towards localisation, there is still room in the growing market for expats, but the expectations are evolving. In addition to facing competition from developing local talent, expats are expected to have a well-rounded ability to operate within the domestic Chinese market. Instead of leading their co-workers, foreigners are increasingly required to fit in and assimilate fully into the environment.

“Just 10 or 20 years ago, an expat with strong industrial experience or technical skill-sets could easily secure a senior position at a MNC in China,” says Charnock. “However the market is full of choice now, with more and more foreign candidates speaking Mandarin and possessing a better understanding of Chinese culture and local people behaviour. As a result, language skills and culture adaptability definitely becomes a selection preference.”

Most experts agree that Mandarin fluency practically guarantees otherwise qualified foreigners job placement in the market, but for those who are still floundering with the language building blocks, there will be difficulties ahead. According to Preston, positions available to non-Mandarin speaking expats have become both more limited and more specialised, especially for those who seek an alternative to the English teaching position. “The number of available jobs to non-Mandarin speaking expats has significantly decreased to what it was five years ago,” he explained.

While language is one of the core skills for the entry- and mid-level jobs, the main emphasis for executive level is on the candidate’s overall understanding of the Chinese market and their ability to create growth, both locally and internationally.

As the supply-demand imbalance in local talent is rectified over time, the consensus seems to be that employment opportunities for expats will become increasingly more specialised, most likely in niche or highly technical positions.

“The window is closing rapidly for people who have never had any exposure to China,” Dieny explains. “Sometimes we are in touch with executives from Europe or the US who want to come here because they think the economy is growing and that that should give them opportunities. But if they have never touched Asia, if they have never done any business in Asia, if they’re completely new, then we generally think they have no chance.”