This is China! BLOG

When China HR Compensation Shames Expat Packages

Last night a buddy of mine who is a General Manager (GM) in Suzhou told me another buddy of ours had made a startling discovery in talking with a Chinese HR manager: it can pay big to be a Chinese HR manager in China. How big? Bigger than some expat packages, apparently.

Western GMs in China are more than familiar with having to fire their purchasing managers for taking kick-backs from suppliers so suppliers can be assured of getting the business with the customer. It’s one of the great secrets of doing business in China few GMs are prepared for until it happens to them. One Western company in Wuxi a couple years ago had to close down because the purchasing manager had been caught taking millions of dollars in kickbacks AND had not been paying its bills to suppliers.

HR, though, was a revelation to my buddies and I, despite our having lived and worked in China for years. Or perhaps it wasn’t the fact that it happened that we found so disturbing, as that it was so lucrative.

“Think about it,” my buddy enumerated, “in China HR is in charge of arranging the busing for employees; for their box lunches or cafteria servings, for the apartments and homes expat managers live in.

“If you have 2000 employees working two shifts a day and the company has to hire 20 buses full-time, essentially, that’s a lot of commission. Or lunchboxes: if they get .5 RMB per lunchbox and 2000 lunchboxes go out to employees seven days a week, that’s a lot of money!”

“Do you think they make more than purchasing managers?” I asked.

“Possibly. After all, who do you think hires the purchasing managers,” my friend said.

Actually, I think what disturbed my friends most was not so much that this sort of thing happened in China HR departments, but that the locals were making more than my friends were from their Western expat packages.

The King is Dead; Long Live the King!

William Dodson
Chicago, USA