Positions at foreign firms less attractive

Domestic advances

A few years ago, fresh graduates tended to shun State-owned enterprises because compensation was often based on tenure at the company rather than an employee's contributions.

However, along with the transformation of corporate structure at big Chinese companies in the past decade - a major step in reforming State-owned enterprises - changes also have been made in the management of human resources. Some young professionals see that as a better direction.

Xin said her current employer, the State-owned securities company, offers different salaries for employees at the same level according to their performance, which was uncommon at State-owned enterprises in the past.

"And they used to set the threshold with a master's degree, but now they welcome a bachelor's, too, which, as I see it, is also a leap forward," Xin said.

As a result, Chinese companies became increasingly popular among fresh graduates, according to annual polls by ChinaHR.com, a leading online recruiter.

In 2003, the poll's first year, 34 foreign companies made the list of Top 50 employers. This year, only 10 are multinationals.

Chinese companies, in their fast expansion domestically and internationally, are also seen as offering employees a more flexible career path. That makes them attractive to Chinese executives who have reached a certain level in a foreign company and find it difficult to be promoted further.

Multinational companies generally adhere to globally standardized grading scales, resulting in slow and controlled career growth, according to the Korn/Ferry report. "This is regarded as too slow for some, especially as Western firms retrenched during the global recession," the report said.

"In a foreign company, every position is very clear. It's very specialized," Russell Flannery wrote in Forbes magazine on a trend he sees of Chinese software professionals now preferring homegrown firms. "However, in a local company, their platform is very big.

"So the appeal of local companies, including private companies and State-owned enterprises, is becoming stronger for human resources," Flannery wrote. 

'Right thing to do'

Chen and Xin don't think they have sacrificed future career development for the choices they made in moving from a foreign company to a State-owned one.

"Even though the salary at the foreign bank was much higher, there are still chances at the State-owned company," Xin said. When she gets promoted to IPO sponsor, facilitating the company's going public, the salary gap will disappear.

"Recalling the choice I made a year ago, I still think it the right thing to do."

And there is not much hindrance for them to jump back to a foreign company in future, they said.

The Korn/Ferry Institute found that not all senior appointees who moved to a Chinese enterprise remained there for the long-term. It estimates that 15 to 20 percent of managers who join a Chinese company leave before 18 months, citing reasons such as a different corporate culture, ineffective internal communication and unfulfilled promises at the Chinese employers.

But is it a trend?

Others doubt whether the changes can be called a trend.

A consultant from another executive search firm, who did not want to be named, disagreed with the Korn/Ferry report on that issue. He said successful examples of foreign-to-State job-hopping can be counted on the fingers of one hand, and are mainly found in technology-driven businesses.

"Senior executives heading for State-owned enterprises from foreign companies usually stay out of the core decision-making team in the new company, and are often recognized as backbones of a certain business unit, in many cases, a brand new business," he told China Daily.

"Senior executives with rich experience in foreign companies don't speak the same language as those from State-owned companies, especially in large monopoly enterprises. The cultures are just vastly different."

But he confirmed the growing popularity of State-owned companies among junior executives in foreign companies.

"Perhaps the number of those who finally make the hop successfully is not large, but the desire is certainly strong." He put it down to the unstable market that jeopardizes job security in foreign companies and to the growing need for talent at State-owned enterprises.

A former human resources staff member at a State-owned company, who also didn't want to be named, shared the consultant's assessment that most who make the change are engineers and technical personnel.

"However, though State-owned companies are trying hard to recruit managerial executives who have experience in multinational companies, the successful cases are really limited, because the corporate culture is still very different in the two types of the companies." 

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