Expatriates or Local Employees?This is a hotly debated topic in the employment market. There are advantages and disadvantages to both.

Advantages to hiring expatriates:
• Functional knowledge. Expatriates bring with them a deep knowledge of not just how to do the job but also how the job function fits into the organisation as a whole.• Head office knowledge. We are all relatively new in China and expatriates bring with them understanding of where the business is going and, more importantly, why. The history of your business is important and, in a country with a 5000 year history, it will be respected. Pass it on.

Disadvantages to hiring expatriates:
• Cost. You can't get around this one. Depending on the package, expatriates can cost more than five times a locally hired manager. Typical packages would include housing, insurance, payment of Chinese income tax, home passage and at least one rest and relaxation trip per year.

• Little knowledge of China. The Chinese culture is one where relationships are critical to doing business. The result of this is that expatriates, who in many cases do not have a deep understanding of Chinese culture, can find it very difficult to operate.

• Language. Even those expats with Chinese language capabilities are extremely unlikely to be able to manage your operations in China without help. It must also be noted that almost all contracts are in Chinese characters.

Advantages to hiring local employees:
• Knowledge of China and the Chinese marketplace. The Chinese marketplace is a complex place to do business and the knowledge that local employees bring with them is critical to your success. Local employees often bring with them local contacts which is immeasurably helpful while working with Chinese regulators and government agencies. We have found that new businesses in China have been surprised that although these contacts may have developed with a previous employer, they remain with the employee even after they have moved on to another employer.

• Cost. Even after the mandatory contributions to pension and housing funds, China offers one of the least expensive and best qualified work forces in the world.

Disadvantages to hiring local employees:
• Inexperience. As the doors to China have not been open for very long, so too has there been little opportunity for Chinese employees to gain experience with Western working methods and standards. The work practices developed in China are not always easily changed.

• Reluctance to make "big" decisions. The fact that employees now have the ability to make their own decisions is new to the Chinese market. With newness sometimes comes fear. Employees tend to fear the repercussions they may face by making either a wrong decision or one which causes their supervisor to lose