Selling Cisco to China's Tech Talent Pool

(page 2 of 2)

Figuring out how to hang onto their Chinese workers and recruit new ones is one of the toughest parts of the job for many foreign managers like Gronski. Throughout the decade there has been a steady growth in the number of multinationals setting up or expanding their R&D operations in China. For instance, in the past year, European drugmakers Novartis and AstraZeneca have each announced plans to invest $100 million in China-based R&D.

Companies such as Intel (INTC), Dell (DELL), Hewlett Packard (HPQ), and Motorola (MOT) are relying on their Chinese engineers to play a big role in designing products. At the same time, Chinese companies like Huawei, ZTE and are trying to beef up their own R&D operations in order to compete better with Western rivals globally.

The Talent Gap

The problem is, even a country with 1.3 billion people has a limited supply of top-notch workers. "China has a lot of very strong, raw talent," says Richard Zhang, a partner with McKinsey & Co. in Shanghai. Sure, it's not hard to find people straight out of school. But if you want to hire people a bit higher up in the pecking order, Chinese with skills and years of experience? Good luck. "People with English, capable of operating in a global environment, with strong technological skills—their numbers are still very limited," says Zhang. "The talent gap," he adds, "is significant."

Gronski says that, despite the spat with Huawei, there's no shortage of young Chinese grads eager to work for Cisco. "The numbers we get are staggering," he says. For each position, there are between 50 and 70 applicants. Weeding through all the applications and selecting the right people "is a non-trivial process," Gronski adds. More difficult still is turning those green engineers into trusty managers.

"This is the thing that wakes me up at night," he says. "While we have wonderful engineering talent here, there are not too many mid-level, experienced managers. The challenge is to go and find the few that exist or to grow them on your own. Given the speed at which we are proceeding, that's pretty hard."

Well Fed and Happy

That's why Gronski runs seminars every few weeks for junior managers in Shanghai, giving them the opportunity to do presentations, solve ordinary problems and learn about marketing issues. "I call it management kindergarten class," says Gronski. "I want to encourage presenters to understand that in order to be good engineers, you also have to have good business sense."

Some Western companies resort to all sorts of tricks in order to keep their Chinese employees from jumping ship. Roche, the Swiss drugmaker, was one of the first pharmaceutical companies to open an R&D center in China. And with so many other drug companies now following suit, "Knowledge workers are in great demand," says Andreas Tschirky, head of Roche's China R&D operation.

To help retention, Roche is focused on providing its China hires—which include a dozen Western-educated engineers—with opportunities to go abroad and work with Roche researchers in Europe and the U.S. "We have the high-level talent," he says. "Now we have to take care of them." That even includes empowering the local staff to make decisions about the food served at the company cafeteria. Since 2004, the R&D team has switched caterers six times. "They expect good quality," explains Tschirky.

Einhorn is a correspondent in BusinessWeek's Hong Kong bureau .