The Chinese market is huge, and many businesses are longing to expand their services by setting up offices in China. It is quite a long process which will require huge financial investments and knowledge of the Chinese commercial scene.

Over the last few years, there have been a number of changes to the wholly foreign owned enterprise (WFOE) establishment process in China. And the question how to setup a wofe (wfoe) in China is still proper. Companies that can successfully set-up their businesses in China will need to recruit a team to run the business. There are particular legal processes and protocols that must be adhered to by the employers in line with the Chinese laws. A majority of the employees that apply for jobs are fully aware of their rights and the extent to which the laws protect them while working for companies. This is why it is crucial to understand the HR practices in China.

Challenges faced by HR in China

In China, the management of HR is commonly saddled with high human costs. The government has recently reviewed the average salary earned by its citizens, and a 10-15% increase has been added to the annual remunerations. From the statistics, the current remuneration is expected to double in the next five years. Other hurdles such as security costs, a higher level of federal protection for employees, and innovative recruitment practices need to be considered. The growing conflict between the HR standards and the features of the Chinese culture has posed more challenges to the development of HR in China. A majority of the employees in the country have adopted the working standards applicable in the modern corporate world.

What Aspects Of HR Do Chinese Companies Consider As Important?

The major focus of Chinese companies is paying the best talents in the different industries to help grow the companies. In China, firms rely on paying high wages to attract talents who can support sustainable corporate growth. However, these remuneration structures are developed in line with the governments’ regulations and guarantees. A large part of the HR budget (about 70%) is set aside for the compensation of employees. Each year, the statistics indicate a rise in recruitment and training among the companies in China. In the case of companies owned by the states, about 1.5% of the annual budget is used to pay for staff training and skill development. However, it can be noted that the companies in China pay a little attention to improving the work environment or general wellbeing of the workers.

What are the responsibilities and liabilities of employers in China?

In 2007, a new law was established in China which highlighted issues related to employment terms and redundancy among other concerns. New companies setting up a business in China may not be aware of this law, and they may incur huge costs in terminating contracts of poorly performing employees based on the laws. It is important to understand the statutes of employee welfare and expected benefits which should be included in the budget.

Create a management system for local employees

Doing business in a foreign country means the company has to undergo the daunting task of managing the local employees. The goal is to keep them engaged and encouraged to work as a team towards growing the company. Treating the local staff properly will reduce the chances of breaking the employment laws and avoiding huge financial penalties. The management system should be used to handle areas such as remuneration, training, promotions, and communication policies in the workplace.

Strategize for the future

It is expected that in a few years the corporate world will be run by a tea, of employers and employees who understand and cooperate to achieve common goals. The era of superior and older staff that controls the new, inexperienced staff is coming to an end. The gap between top executives and employees will be remarkably shortened, and then the ideas and suggestions of employees will matter when critical decisions are made. Companies can start now; the employees can be encouraged to go further in personal research and development in view of finding ways to help the company grow.