Wednesday, January 15, 2014, 08:50
Human resources: Foreign firms 'localizing'
By He Wei in Shanghai

The past year witnessed more company-paid relocations from China to the United States than vice-versa, according to a report on migration trends, indicating growing localization by foreign businesses in the world's second-largest economy.

Last year, employee reshuffles from China to the US outnumbered those from the US to China for the first time, according to the International Migration Study released on Tuesday by UniGroup Relocation, a US-based moving services firm.

UniGroup handles more than 260,000 moves annually, including housing and destination services. It services some 400 of the Fortune 500 multinational corporations and is a barometer for global economic activity.

The number of moves from Asia to the US more than doubled those from the US to Asia, the study showed. A similar trend was seen between China and the United Kingdom and France.

The "moves" in the study were defined as the influx of people traveling internationally under the mandate of an employer and did not include short-term business trips.

"A key reason for this is that many US-based companies have sent over people to help establish their organizations here," said Patrick Baehler, president of UniGroup. "When their work is finished, companies tend to replace them with local talent and bring them back."

China ranked third in terms of countries with workers moving to the US, following the United Kingdom and Germany. Meanwhile, it was the top destination for incoming professionals in the Asia-Pacific region and the fourth worldwide.

Asia Pacific accounted for 30 percent of UniGroup's international clients, with the percentage surging each year.

"The continued rise of economies in Asia has fueled trade between the US and leading countries such as China," said Michael Stoll, chair of the department of public policy at the University of California, Los Angeles.

Baehler observed that when some firms do pull back staff, they aim to replace them locally if possible.

"When UniGroup made a local acquisition in China, I was dispatched there for a while. But our goal is to develop more homegrown talent in the local market, so these human resources are not permanent," Baehler said.

His research echoes evidence that local staff now have better shots at secure managerial positions with multinational corporations than in the past.

A regional recruitment strategy may be preferable as areas mature, said Jonathan Brown, vice-president of global solutions at global recruiter Futurestep.

For instance, German robotics company KUKA AG named a Chinese executive to head its operations in China and assigned only four foreigners to its Asia-Pacific headquarters.

"We need to make sure that KUKA is a Chinese company," said Till Reuter, chief executive officer of KUKA.

The findings also underscored the stagnancy of new investment into China, said Sun Lijian, vice-dean of the School of Economics at Fudan University in Shanghai.

"Foreign companies are redistributing resources. Following the call to revitalize the manufacturing sector in the US, there is a trend toward a pullback from China to their home countries," Sun said.

Some 20,400 foreign-invested companies established offices in China last year between January and November, which was down 9.19 percent year-on-year, data from the Ministry of Commerce showed.

One bright spot was in Chengdu, where UniGroup's revenue jumped 91 times that of its 2007 numbers.

"Multinationals are answering the central government's call to explore the western part of China, driving personnel and goods inflow. And the establishment of consulates in Chengdu by many countries also has played a key role," said Xie Tianli, Shanghai branch manager for UniGroup.