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October 14, 2007

Staffing issues arise from rampant growth in China

By Nicholas Moody

Staffing issues arise from rampant growth in China

 

The Chinese accounting profession’s rapid growth is presenting unique staffing challenges, according to Ernst & Young China (E&Y). The firm’s managing partner David Sun said China has been an excellent area for the global firm to expand its practice and that there has been double-digit growth in all core service lines. E&Y revenues increased by 41 percent for the fiscal year to 30 June 2007 in China.

Sun stressed the need to develop and retain staff is a vital strut of this projected growth. E&Y currently employs 8,000 people, an increase of 30 percent in the past year. This is in line with its target to employ 11,000 people by 2010.

In 1992 there was virtually no accounting profession in mainland China but 15 years later there are 130,000 members. However, the demand is still much larger than the supply. “In the next few years the training at universities and setting the foundation for the training of accountants is very important,” Sun said.

E&Y faces stiff competition and gender and cultural challenges in its battle against staff attrition, according to Sun. Staff loss is an unwanted side-effect of the Chinese economy’s success. He said the buoyant market has resulted in E&Y losing staff to clients that look to firms as a field for recruitment.

Gender is also an ongoing issue in China. “Many people joining us are female but as they progress the female attrition rate is a lot higher and that will affect the growth of the profession as well,” Sun explained.

Addressing female attrition is an industry challenge where 70 percent of Chinese university accounting students are female. Within E&Y the rates reflect this gender imbalance: 64 percent of all its employees are female, although at the partner level the mix is quite different and women make up only 27 percent. Sun said the predominance of women coming into the profession will require Chinese firms to be more sensitive to their needs.

“We are setting personnel policies that will help female accountants, staff and executives in our firm manage the work/life balance. [We are] making it more flexible for them, using technology to make sure they can handle the demands of home life as well as professional life,” he said.

Promoting a better working relationship between mainland and Hong Kong Chinese, and non-Chinese, is another challenge. Mainland Chinese make up 85 percent of E&Y’s staff, Hong Kong Chinese 10 percent and non-Chinese 5 percent. Sun explained: “[Mainland Chinese and the Hong Kong Chinese working together] is not as easy as many people think. Hong Kong Chinese are slightly different from mainland Chinese. In many degrees it is different because we come from different environments, backgrounds and different mindsets. So that in itself has already needed a lot of attention.”

The firm has tried to reduce cultural differences by using teaming exercises that put different groups together to work.

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