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Chinese Groups Winning Battle for Talent

Multinational companies are losing their image as China’s best employers and are increasingly struggling to compete for local staff with mainland Chinese groups, according to research by Manpower, the U.S. employment company.

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Management and human relations professionals in China say it is harder for foreign companies to attract and retain senior managers who are Chinese.

In a study to be released on Wednesday, Manpowerreports a sharp increase in Chinese job-seekers who say they prefer to work for Chinese companies.

The news that Chinese groups are increasingly winning the talent wars comes at a time when many foreign companies complain that it is harder to do business in mainland China, because some government policies favor local companies and because domestic businesses are becoming more competitive.

“With a reputation as ‘golden brands’, foreign companies have long been regarded by Chinese workers as highly desirable places to work. However, all that is starting to change,” says the report. The percentage of Chinese job seekers surveyed who said their first choice was a foreign company fell 10 percent from a previous Manpower survey in 2006.

60 percent of management-level employees said a Chinese private-owned company would now be their first choice as an employer. “Foreign companies no longer have a reputation as the highest-paying employers,” the study says, noting that 43 percent of job seekers view “better compensation” as the primary reason to favor a domestic company.

Kent Kedl, of business consultancy Technomic Asia in Shanghai, said money was not the only reason. “Local companies are starting to gain market share in every industrial sector in China, and that makes them an exciting place to work,” he said.

Many Chinese companies offer better career prospects, according to some mainland Chinese professionals. “It’s well known among Chinese staff working for foreign companies that there’s a ceiling in our career paths; when you reach a certain level you have little chance of being promoted further,” said one human resource professional who said he left General Electric when he hit that ceiling, and switched to a Chinese company.

But Wilson Lam, senior HR director at Alibaba.com , who worked at Nike , said he thought the nationality of the company was not the deciding factor: “When you get to a senior level, people are not asking if you are a Chinese company or a western company, they are asking ... whether the position itself is interesting.”

Additional reporting by Shirley Chen