Lee Yuan is a 25-year-old graduate who has just entered Shanghai’s highly competitive job market. She has managed to land a contract position at an international bank, but she isn’t liking it.
“It’s very unstable. The security and benefits are poor compared with a full time job. I don’t feel a sense of achievement and my friends do not consider my job as a decent one. I feel very upset and depressed.”
International banks like HSBC and Standard Chartered are expanding quickly in the mainland and have launched a variety of new products and services. This provides them with a unique opportunity for outsourcing or contracting workers, especially in the current economic environment.
Contract opportunities include tax, legal, IT and banking services, but there is a shortage of highly skilled workers with enough experience in financial services to fill these roles.
This is partly because of negative sentiment towards contracting in China, where it is a less popular option than in mature global financial markets, such as New York, London or Sydney. The main reason for this is the temporary status of contract or even outsourced positions, and the lower job security associated with temporary employment.
Anti-contracting attitudes aren’t just associated with the older generation. Many younger Chinese professionals are themselves reinforcing this sentiment by discouraging others from accepting contract positions through peer pressure.
But there are signs of change
It takes time for people to change their mindset, but it’s interesting to note differences between Chinese who have studied overseas and those who have not. The former group tend to be more open to contracting roles, according to an internal survey I have seen from a human resource consultancy firm in Shanghai.
While contracting is a relatively new concept, it seems to be slowly taking foot in China. The number of people who are willing to take contract work is small, but it is rising.
As China’s financial markets continue to mature, the recognition and acceptance of contracting will catch up with Singapore and Hong Kong, and perhaps eventually with New York and London.
Meanwhile, if international banks in China are serious about retaining talented contract workers, they should recognise that these positions are short-term and without key benefits. Compensation rates need to be increased accordingly.