An Interview with Senior Consultant Mrs. Qianqian Zhang about the re-opening in China and strong growing markets in South-East Asia, like Vietnam.

The booming economy across Southeast Asia is creating a perfect environment for companies to expand their reach and presence in the region. As such, more and more German regional headquarters based in Asia are establishing offices in Southeast Asia in order to connect with the growing market here. However, hiring the right talent with the correct skillset and experience can be extremely challenging during this process. Finding someone who not only has the relevant experience but also shares the same cultural values can be tough.

For this reason, Mrs. Qianqian Zhang, our expert in the Asia-Pacific Executive Search Team, has compiled several important market insights about the recent opportunities and challenges in China and the Southeast Asian region.

Question 1: China has reopened its borders after three years of COVID-related travel restrictions. How will this news affect companies that have business with or in China?

Mrs. Zhang: The travel restrictions, which were put in place to combat the spread of COVID-19, have created bottlenecks in international supply chains and caused production shutdowns, among other challenges for businesses. While this news is a positive development, it will be important for companies to carefully evaluate the ongoing market situation in China and adjust their business plans and investments accordingly. Many companies may have already been looking for alternative locations in Southeast Asia to diversify their risks, in light of the challenges posed by the travel restrictions.


Question 2: What will be the alternative production locations in Asia, other than China, and what will still be the main challenges that companies will encounter in these markets when it comes to recruiting top management roles?

Mrs. Zhang: Southeast Asia is a natural fit for diversification. The region, with countries such as Vietnam, Thailand, Singapore, Malaysia, Indonesia, and the Philippines, is currently growing economically faster than China. For example, Vietnam, with almost 100 million inhabitants, is Germany’s most important trading partner in Southeast Asia. Companies like Lego and Apple have been opening up and producing there. With its numerous raw materials and relatively low personnel costs, more companies are looking for production alternatives in Vietnam, as well as in other locations in Southeast Asia. Furthermore, Vietnam has a growing and young highly educated population and provides excellent business opportunities. The country is entering a new phase of stable economic growth, which is expected to continue in the near future, creating a favourable environment for investments and business expansion.

Recruiting qualified talent in Southeast Asia can present a number of challenges for companies. Some of the main challenges include a shortage of qualified talent on local markets, local competition for top talent, rising labor costs, cultural differences, language barriers, and complex local regulations. In China, for example, according to our local partner the German Chamber of Commerce (AHK) in China and their recent labor market and salary report 2022/2023, rising labor costs, recruiting, and retaining qualified staff are again considered as the top 3 HR challenges impacting business operations, similar to previous years.


Question 3: You mentioned cultural differences and language barriers, for example, as one of the main challenges. How can you support HR decision-makers to navigate that?

Mrs. Zhang: The main challenge for most HR decision-makers from European headquarters is simply the fact that they are not very familiar with the different approaches to local recruiting in Asia. They often lack access to local top talent pools and rely largely on their subsidiaries, where communications are not always neutral, accurate, and clear. Working with experienced local partners and advisors with extensive local networks and trackable recruiting tools can be a very effective approach. This approach should be conducted in a culturally sensitive and appropriate way. With years of experience in diverse industries and a stabilized regional network, we have already developed a successful method of recruiting and retaining top executives in these markets. Our language capacity includes German, Chinese, and English, so that all involved decision-makers can fully understand all information.


Question 4: You also mentioned local competition for top talent as another one of the main challenges, what is your approach to help companies to stand out and attract top talent in these competitive markets?

Mrs. Zhang: Companies operating in these markets learn to live with and grow amid intense local competition for top talent. This competition for talent can manifest in many ways, such as salary, benefits, work-life balance, training, and other forms of compensation. When it comes to hiring top talent, especially in niche industries, partnering with a serious and qualified executive search firm has been proven to be one of the most effective solutions. Our approach begins with a thorough understanding of the company’s needs and objectives. It is of utmost importance to us to ensure that the company’s goals align with the skillset and personal motivation of the executive being recruited. We target potential top candidates with a customized process through networking, industry research, and referrals. In China, for example, we have direct access to local social media recruiting platforms like WeChat, Liepin, Zhilian, etc. as well as partners and influencers from different industries. Since most top-level candidates are not actively looking for new opportunities, one of our key advantages for our clients is to use existing expertise to locate an available pool of candidates (domestic and international) in just a few weeks. Daily interaction with candidates, businesses, and institutions in these regions for many years has led us to the vast network we have established across the continent. Moreover, sharing clear advice on the conception of remuneration packages and onboarding procedures in compliance with local legal regulations plays a fundamental role in closing the deals.


Question 5: Can you share any recent success stories regarding executive search in these markets?

Mrs. Zhang: We have a long track record of success in recruiting for German SMEs operating in China and the Southeast Asian region. Some of our more recent success stories include the successful hiring of a Managing Director in Malaysia, General Manager in Greater China and a Managing Director Southeast Asia operating from Australia where Departer is also well-established via the Brisbane office. Before the whole executive search process started, we have also provided industry trends, salary benchmarks, and applicable advice on competitive packages and onboarding process. We have co-piloted the selection process until our clients and the shortlisted candidates come to final bilateral satisfying results. Our clients have benefited from the fact that we fully understand the German business culture, multinational candidates, and the regions they live.


Question 6: The Chinese New Year of 2023 is standing at the door, where are you heading along with Departer?

Mrs. Zhang: We have been launching multiple new projects in Asia Pacific since the early start of this year, and there are certainly more chapters to be opened. According to the Chinese lunar calendar, the year of 2023 is the “Year of the Rabbit” and represents a strong sense of collaboration. In this positive spirit, I am looking forward to partnering with more clients in the Asia-Pacific region and offering continuous high-quality customer service to support their expansion in these regions with Departer.