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Industry Spotlight
Survey Finds International Assignments to China Continue to Grow
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ultinational organizations long since have viewed The People’s Republic of China as a premier destination for their international expatriates, both as an emerging market and as a long-established center of global commerce. A recent survey has found that interest in the country as an expatriate destination continues to grow. According to a new report from Cartus, Danbury, CT, interest in corporate relocation assignments to China continues to grow, with 96 percent of companies responding to its survey, “Destination: China,” saw increased or stable relocation activity within China during the past two years. The survey, conducted in the fourth quarter of 2010, queried senior executives at 68 multinational companies based in Asia-Pacific, Europe, the Middle East, Africa, and the Americas, representing a total employee population in excess of three million. “Companies are now looking to China for its tremendous market opportunities, and it appears they will continue to do so as world economies improve,” said John Arcario, CRP, executive vice president at Cartus. “Maximizing opportunities for growth will depend on an effective workforce that has been properly trained to be deployed in nontraditional locations and assignment types. Getting the right people to the right place is always a complex yet critical goal, and in China, the challenges are immense.” According to Cartus, one key survey finding is that compared to the last two years, more than one-third more respondents are predicting increases in assignment volumes dur-
ing the next two years. In addition, Tier 2 and Tier 3 cities are estimated to attract more corporate relocation activity, and Tier 1 cities will experience continued growth. Fifty-four percent of respondents said Tier 2 cities are expected to witness an increase in activity during the next two years, and 30 percent of companies said the same for Tier 3 cities. Suzhou, Chongquing, Qingdao, and Chengdu are the top Tier 2 cities for assignment growth. Jiangmen and Nanning are the top Tier 3 cities, according to the survey. With regard to Tier 1 cities, Shanghai and Beijing continue to experience an increase in international assignments, with 50 percent of respondents seeing growth during the past two years and 60 percent indicating expected growth during the next two years. According to Cartus, there are approximately 300 Tier 2 cities, which are defined as having populations in excess of one million but with fewer amenities available to residents. There are approximately 1,200 Tier 3 cities, which are considered economically underdeveloped. The top challenges cited by respondents in Tier 2 and 3 cities are schooling, with 33 percent; family adjustment, with 32 percent; health care, with 29 percent; and cultural differences, with 21 percent. The survey also examined organizations’ decisions to use nontraditional mobility assignments to expand their expatriate base. Nontraditional assignment types, such as permanent one-way moves, returnees, and “localized” assignments, are predicted to grow more than 2.4 times the rate of traditional assignment types when comparing
the next two years against the past two, according to Cartus. Longterm assignments still are the most common type of policy, but the fastest growing assignment segment is short-term assignments—defined by the release as those typically lasting between four and 12 months. Another key finding of the study is that intra-Asia relocations are growing as employers seek regional talent to fill assignments as a strategy to overcome cultural challenges and the cost associated with moving. Thirty-five percent of survey respondents noted an increase in intra-Asia assignments during the past two years, while 46 percent expect intraregion transfer volume to increase. The Cartus report, however, does cite a significant talent shortage because of an inadequate number of employees in China who are equipped with the skills and experience required to work in a multinational corporation. Eighty-eight percent of respondents said the transfer of knowledge and skills is the primary reason to send an executive to China, while 62 percent said that the development of the employee is the main reason for the assignment. “Organizations doing business in China are working to overcome the talent barrier by cultivating intraAsia talent,” said Kenneth Kwek, head of Cartus Asia-Pacific operations. “It’s clear that multinational corporations will also continue to deploy assignees from outside Asia to help establish and expand their presence in China. In addition, the survey shows that multinationals are going to need a combination of staffing approaches from both within and outside of APAC to fulfill their needs in China.” MOBILITY/MAY 2011 17