It’s a daunting question. And it’s a tough one to answer, not least because the thought of setting up a legal entity in China feels like a bureaucratic nightmare. It’s a big commitment that stops many businesses in their tracks.

Quick Note: There are ways to hire staff in China without the red tape of setting up your own company. We’ll explain how that works later.

However, it doesn’t have to be a guessing game. At Kinyu, we use a few specific “litmus test” questions to help businesses decide. If you find yourself nodding “yes” to these scenarios, the move to a local team will likely pay for itself.

Are You Managing More Than One Supplier?

Most businesses start by ordering one product from one supplier, often directly via sites like Alibaba. It’s manageable. But once you add a second or third supplier, your DIY model will start to break.

• Communication: First, your supplier’s sales manager might speak perfect English, but the people actually making your goods (the production line managers and engineers) usually don’t. You are relying on the sales rep to translate your technical needs perfectly.
• Coordination: With multiple suppliers, it’s easy to spend your entire day chasing updates. To cope, most businesses start paying “per-visit” fees to inspection companies or sourcing agents for every factory. These costs add up fast.

The Fix: If you are coordinating between two or more factories, you need a Supplier Account Manager on the ground to act as your eyes, ears and voice.

Is Your Supply Chain Becoming Too Valuable To Leave To Chance?

As a start-up, it’s essential to keep costs low. But as you scale, you have more to lose. A single batch of faulty goods can quickly destroy your brand reputation.

It’s not uncommon in China for factories to swap materials or components to save money without telling you. If you aren’t there to see it, you only find out when customers start complaining.

Once your supply chain reaches a certain value, you need a dedicated hire to keep track of three specific things:

• Quality: Catching issues on the line before the goods leave the factory.
• Costs: Keeping a tight grip on your Bill of Materials (BOM) so your margins don’t disappear.
• Ethics: Ensuring your suppliers meet social compliance and certification standards.

Who You Need: A Quality Manager or a Procurement Manager to keep the factories honest and the BOM costs under control.

Are You Overpaying For ‘Middlemen’ or Third-Party Fixes?

Sourcing agents and third-party inspections are expensive. As your volume grows, these partners often become a significant drain on your profits.

1. The Cost Is Higher Than A Salary: Third-party agencies charge a high premium for every visit. As your volume increases, these “per-visit” fees or percentage-based commissions quickly exceed what you would pay for a fixed monthly salary. By bringing this in-house, you significantly reduce your “cost per day” for quality control and sourcing.

2. They Identify Problems, But They Don’t Fix Them: This is the biggest limitation of outsourcing. A third-party inspector has a very strict remit: they turn up, check a box, and give you a “Pass” or “Fail” report. The headache of fixing a bad batch falls entirely on you. An in-house hire, however, can stay at the factory to perform a root cause analysis and work with the engineers to ensure the mistake never happens again.

The Fix: Once your monthly spend on agents and inspectors hits a certain level, an in-house hire becomes the cheaper, more effective option. By conducting inspections and procurement in-house, you save on daily costs and own the relationship with the factory directly.

Are You Building Something Custom Or High-Tech?

China has many incredible original design manufacturers, but developing custom tech from another time zone is a minefield. Managing hardware, software and compliance via email rarely works.

Without someone on-site to oversee the R&D cycle, your requirements are easily misinterpreted, leading to months of expensive delays and compromised IP.

The Fix: You need a Project Manager with industry-specific expertise. They act as the bridge between your vision and the factory’s engineers, ensuring the product actually works and meets all standards.

How To Hire In China (Without The Legal Headache)

If you’ve decided you need a team but you’re dreading the paperwork, this is where The China Desk comes in.

We are an Employer of Record (EOR) platform. This means you can hire staff on the ground in China without setting up your own legal entity.

• Speed: Quickly get full-time or part-time staff active in days, not months.
• No Red Tape: You manage the person; we handle the complex Chinese bureaucracy and HR.
• Flexibility: Whether you need a full-time Quality Manager or a part-time Merchandiser to review suppliers, we handle the local contracts, payroll, and compliance.

The post Is It Time to Hire Your Own China Team? appeared first on Kinyu.

This role is actually essential for supply chain management, yet it often gets misunderstood, especially by those of us in the West. 

A merchandiser is responsible for ensuring that products move smoothly from the factory floor to your store. Their primary focus is on tracking orders, managing purchase orders (POs), and making sure everything flows efficiently through the supply chain.

Let’s break it down:

Key Responsibilities of a Merchandiser 

Think of a merchandiser as the essential link between suppliers and various movers and shakers in the supply chain. Here’s what they actually do: 

• Coordinating with Suppliers: They work closely with suppliers to ensure that products are delivered on time and meet quality standards. It’s all about keeping things on track! 
• Tracking Production Timelines: They monitor how things are progressing on the manufacturing side, making sure that products are ready when they should be. 
• Facilitating Communication: They act as the go-to person for everyone involved—suppliers, logistics teams, and quality assurance departments—making sure all parties are on the same page. 

Essential Qualities to Look For 

Now that you know what a merchandiser does, what should you look for when hiring one? Here are some standout qualities: 

• Strong Communication Skills: They need to be able to talk to various teams and suppliers effectively. Good communication is key! 
• Understanding of Supply Chains: While they don’t need to be industry veterans, some familiarity with how supply chains work goes a long way. 
• Problem-Solving Skills: Things don’t always go according to plan. A good merchandiser can think on their feet and come up with solutions quickly. 
• Attention to Detail: Products need to meet certain standards, and a detail-oriented person can catch discrepancies before they become bigger issues. 
• Bilingual Abilities: Proficiency in both English and Mandarin is essential, especially when dealing with international teams. 

Salary Talk: Want to find out how much hiring a merchandiser would cost? Our free salary calculator factors in all expenses, from base salary to mandatory benefits and bonuses. 

How The China Desk Can Help 

Finding the right merchandiser in China can be challenging — that’s where The China Desk comes in. We have extensive experience placing merchandising professionals who have gone on to transform their companies’ supply chain operations. 

We understand what makes a great merchandiser because we’ve helped place many of them. Our candidates have successfully: 

• Developed strong relationships with suppliers 
• Enhanced inventory management 
• Optimized supply chain operations 

Want to know exactly what a merchandiser will cost your company in China? Our free salary calculator factors in all expenses, from base salary to mandatory benefits and bonuses. 

Get in touch with our team today to discuss your specific needs and how we can help you find the right merchandising talent. 

The post Hiring a Merchandiser in China  appeared first on Kinyu.

While China remains a key node in the global supply chain, firms are increasingly cautious about maintaining large, permanent workforces.

Yet, as many have discovered these past few years, you can’t just up and leave China. Relocating to, say, Southeast Asia is often impractical and expensive.

This dilemma has led many to seek flexible staffing solutions that maintain their presence while reducing risks. Hence, we’ve seen a surge in inquiries about part-time hiring as a potential answer.

On paper, it’s appealing:

• Keep your foot in the door in China
• Avoid long-term commitments
• Potentially save on costs

Sounds perfect, right? Well, not so fast…

Part-time hiring in China, while appealing, comes with its own set of complexities.

How Does China Define Part-Time Work?

Part-time employment only gained official recognition in Chinese labour law in 2008.

Despite this, strict limits apply to part-time work in China:

• Max 4 hours per day
• Max 24 hours per week

Important: Workers can claim full-time status if these limits are exceeded.

China’s approach differs significantly from other countries. For instance, the U.K. has no specific hour threshold defining full or part-time status, while the U.S. sets the part-time maximum at 30 hours per week.

Employers should set realistic expectations for part-time workers in China, keeping in mind these strict time limits.

We strongly advise tracking hours meticulously. Proper documentation is crucial, as without it, workers might claim full-time status during disputes, potentially leading to legal issues.

Do Part-Time Employees Need a Contract?

While oral contracts are legally acceptable for part-time employment in China, having a written contract is strongly recommended.

And don’t simply modify a full-time contract by reducing hours. Instead, create a tailor-made contract that clearly outlines:

• Duration of employment
• Job responsibilities
• Compensation details

Unlike full-time positions, part-time roles in China do not have a probation period. Instead, employers can terminate part-time workers at any time without cause. However, part-time employees can also leave their position at any time.

REMEMBER: Relying heavily on part-time employees may pose a risk due to the ease with which either party can end the working relationship..

Social Insurance and Liability for Part-Time Workers in China

Social Insurance

Social insurance in China is a comprehensive system that provides various benefits to employees. For part-time workers:

• Only work-related injury insurance is mandatory for part-time employees
• The other components of social insurance (pension, medical, unemployment, maternity) are not mandatory for part-time workers
• However, while not mandatory, some employers may choose to offer additional benefits to part-time employees as a way to attract and retain talent

Employer Liability Insurance

This insurance protects your business against claims from employees for work-related injuries or illnesses. While not mandatory, it’s highly recommended:

• Covers claims for personal injury or accidents during employment
• Essential protection against potential legal claims
• Applies to part-time workers, freelancers, and even clients who might injure themselves in your facility

CRUCIAL: Without this insurance, you're exposed to potentially significant financial risks if anyone is injured on your premises.

Managing Part-Time Employees in China from Abroad

Part-time employees can be valuable assets, but managing them effectively, especially from another country, requires careful consideration.

Focus:

• Part-time staff often juggle multiple jobs or responsibilities
• Your work will not be their sole focus.

Availability:

The strict hourly limits on part-time work in China further complicate management.

If you need to contact your part-time employee outside their regular working hours (which is likely due to time zone differences), any work-related communication could count towards billable hours.

This situation risks pushing the employee over the part-time threshold, potentially exposing you to full-time status claims.

Moreover, if an urgent matter arises and the employee has already worked their four hours that day, you’ll be in a difficult position. You’ll either have to wait until the next day or risk exceeding the legal part-time work limits.

Full-Time Vs. Part-time

As a roundup, here are the key differences between full-time and part-time employment in China:

Simplifying Part-Time Staffing with Kinyu’s Streamline Model

While part-time staffing offers flexibility, navigating China’s complex labour laws is often tricky. The China Desk – Streamline Model provides a hassle-free alternative:

Key Benefits:

• Access to Kinyu’s internal supply chain managers
• Flexible engagement: 5-10 hours per week
• Direct supplier representation
• Full compliance management handled by Kinyu
• Priority management aligned with your needs

Our Streamline Model gives you the advantages of part-time staff without the legal complexities. Kinyu’s full-time employees work part-time for you, ensuring seamless operations and regulatory compliance.

To discover more about The China Desk – Streamline Model and how it can enhance your business operations, download our case study or schedule a call with our team.

The post Part-Time Hiring in China: What You Should Know appeared first on Kinyu.

Get the Right Insurance First

Before any workplace accident occurs, it’s crucial to ensure your employees are covered by proper insurance. There are two main types of insurance to consider for work-related injuries in China:

1. Mandatory Work-Related Injury Insurance

In China, this is part of the mandatory social insurance system. Employers must make regular contributions based on their employees’ salaries. As a result, in case of injury, the local authorities will pay for the medical treatment.

If you don’t have it, your business might have to pay all medical costs yourself if someone gets hurt.

2. Employers’ Liability Insurance

In addition to the mandatory social insurance, employers should consider obtaining employers’ liability insurance. This type of insurance provides additional coverage for:

• Costs that may not be included in the standard work-related injury insurance
• Potentially costly compensation claims and legal fees that may arise from workplace accidents

By having both types of insurance, you can better protect your business and employees in the event of workplace injuries or illnesses.

Freelancers: Your Responsibility Too

Workplace injury law in China also covers freelancers working on your premises. So, everything on this page applies to them, too.

However, since you can’t pay social insurance for them, your company will be footing the medical bill if they get injured at your workplace.

Therefore, employers’ liability insurance is absolutely necessary if you have employees, freelancers, or contractors working on your premises.

What to Do If Someone Gets Hurt

1. Tell the authorities:
   • Report the accident to the local work and social security office within 30 days. The local Bureau for Human Resources and Social Security is the government agency responsible for handling these reports.
   • Failing to report within the 30-day timeframe can result in the employer being liable for medical costs that would otherwise be covered by social insurance.
2. Ask for an official assessment:
   • Within 30 days of the employee going to the hospital, ask the Bureau for Human Resources and Social Security to check if it’s a work injury.
   • Give them proof of employment, doctor’s notes, and details about how and when the accident happened.
3. Keep paying the employee:
   • During the assessment, which can take around 60 days, you must continue paying your employee’s salary.
   • If it’s found to be a work injury, you must keep paying the employee’s full salary. You might need to do this for up to 12 months while they get treatment.

What Are You Liable for?

Employers in China are typically liable for:

Injuries at work during work hours

• This includes injuries while performing job duties
• Injuries that happen while preparing for work or finishing up
• Injuries from workplace violence or attacks
• Accidents during work-sanctioned breaks or meals on company premises

Occupational illnesses

• Diseases caused by exposure to work-related hazards
• If diagnosed after leaving the job, employees can apply for work injury status within a year of diagnosis
• This only applies if they haven’t worked in a similar hazardous job since leaving or retiring

Injuries on business trips

• To count as a work-related trip, the employee must be sent by their employer
• The injury must be related to work activities

Commute-related injuries

• Injuries that occur during the direct commute between work and home
• Important: The commute must be direct. For example:
  • If an employee is injured on their way home directly from work, it’s covered
  • If they stop at a restaurant to meet a friend after work, and are injured after leaving the restaurant, it’s NOT covered
  • However, if they’re injured on the way to the restaurant directly after leaving work, it IS covered

Important: China tends to favor workers in injury cases, even when company policies are violated. If somebody injures themselves while smoking in your factory, you're still liable.

Need Help With a Work-Related Injury in China?

In most cases, as long as you have made social insurance contributions and have employer’s liability insurance, you should be covered in most situations.

However, if you prefer a risk-free approach, consider managing your China team through our China Desk platform. We handle all the complexities of Chinese employment law, including work-related injury claims, allowing you to focus on your business goals.

The post Protect Your Business from Work-Related Injury Costs in China appeared first on Kinyu.

Why is there such a range? The variation in social insurance rates depends on the location of employment and the employee’s salary. Let’s dive in.

Overview

China’s social insurance program, known as “Five Insurances and One Fund,” consists of five insurance types and a housing fund, with both employers and employees required to contribute.

• Pension (Endowment Insurance) – Employers and employees both contribute to this scheme, part of China’s national pension system for laborers in retirement. The required employer contribution can be up to 20% of an employee’s salary.

• Medical Insurance – Both employers and employees contribute to this insurance, which covers medical expenses if an individual is injured. The employer’s contribution ranges from 6-12% of the salary, while the employee contributes 2%. Part of this fund goes into the individual’s medical account, and part goes to the health system’s public accounts.

• Unemployment Insurance – If an individual becomes unemployed, they can claim unemployment benefits from the state, provided they have paid their unemployment premiums for at least a year. Both the employer and employee contribute to this insurance.

• Maternity Insurance – Employers pay into this fund to cover maternity-related medical expenses and the employee’s salary during maternity leave.

• Work Injury Insurance – Employers solely contribute to this fund, usually below 0.5% of the salary, to cover costs associated with work-related injuries. If an injury occurs at work, this fund covers various costs, and the employer must pay the injured employee’s wages. This fund is different from Employer Liability Insurance.

• Housing Fund – In addition to the five insurances, employers and employees must contribute to the Housing Fund, administered by the Ministry of Housing. Eligible employees can use the funds in their individual accounts for a down payment on a house or a mortgage. Most cities have a minimum required contribution percentage, such as 5% in Guangzhou and 7% in Shanghai, but employers can choose to pay more as a supplementary allowance, typically up to around 12%.

How to Calculate Social Insurance

So, now you know what “social insurance” is, how do you calculate what you need to pay? The payable amount depends on the salary and location.

However, almost every city has its own policy on social insurance, complicating matters. Therefore, the employer contributions for your team member in Guangzhou will differ from those in Tianjin, even with the same salary.

The table below shows the percentage of salary and total payment for social insurance contributions in Guangzhou and Tianjin, highlighting the differences in employer obligations between these two cities.

There are variations like this across China, and the rates are subject to change, so you should seek professional advice to ensure you are paying the correct amount. For personalized support in calculating social insurance costs for the city and salary you plan to hire for, check out our Salary Calculator.

How Do You Pay Social Insurance?

Employers with an entity in China must open a local bank account eligible for handling payroll and sign agreements with relevant insurance bodies for monthly direct debits. Note that not all banks, such as HSBC local accounts, meet this requirement.

For those without an entity in China, employing team members through a third-party service provider is an option. The China Desk, for example, can manage all payroll and social insurance matters with full transparency.

Key Points to Note

Along with the overview and calculations, keep these key points in mind:

• Some cities have salary caps for social insurance calculations. For example, Tianjin currently has a cap of 22,434 yuan. Salaries above this cap will not increase the premium.
• You cannot pay social insurance in a city where your company is not incorporated.
• Rates and salary caps change regularly, so it’s essential to check for updates.
• The state can alter the housing fund rate.
• As a general rule (though not a strict policy), social insurance rates tend to be higher in cities where average salaries are lower. Beijing is an exception, with both high social insurance rates and wages.
• Paying social insurance is mandatory by law.

These warnings might feel daunting, but with proper budgeting and advice on social insurance calculations, you’ll be fine.

For support with social insurance costs for your employees in China, check out our Salary Calculator or contact one of our team members.

The post Social Insurance Essentials for Hiring in China appeared first on Kinyu.

Here are some key areas to consider:

Time difference

A key factor to consider is the time difference. China’s time zone is UTC +8, so if you are in Europe or America, you will be asleep through a significant portion of China’s working day. Therefore, your contact windows with your China remote team are relatively small. As a result, it’s possible that your team members in China may not communicate with their colleagues during the morning hours.

Kinyu’s Founder, Benjamin King, experienced this challenge firsthand in his previous role as a China Country Manager. “It can feel quite lonely working from home all day with your colleagues only come online at 4pm.” This disconnect can adversely affect your team’s productivity and impact your operation.

As challenging as this can be, there ARE ways to support your team members and make remote working a successful arrangement for all parties. Our first recommendation is to set clear tasks and instructions for your team member so they wake up with a plan of action. Plenty of programs are available to simplify this process, such as Trello, Microsoft Planner and others (but make sure the software you use works in China!) 

Another option is for your employee to consider working later hours, starting late and finishing late, so there is more overlap with the rest of your team. However, this arrangement typically works better for European companies than American companies. You should also check out a Non-fix working time system 不定时工作制, which is a form of employment agreement you register with the local labour bureau. The Virtual General Manager Function in The China Desk is a tool to help with the time difference, where we check in with your team members, as they are often in the same office as our team.

Social insurance

Working remotely opens up opportunities to collaborate with individuals from all over the world, including China. However, it’s crucial to ensure that you comply with local labour laws and employ individuals correctly. This compliance applies domestically in China as well. For example, if you plan to hire someone in Tianjin but are based in Guangzhou, you cannot pay Tianjin social insurance from your company. As an employer, you are responsible for communicating this to your employees and ensuring they understand.

This same principle applies when hiring someone in China from an office in a different country. For more information on this topic, check out our blog on social insurance.

Team engagement

The importance of team engagement ties into the time difference issue in China. If you read about the foundations of Guanxi in our previous blogs, you will know that Guanxi is all about relationships – including those built in the workplace.

Therefore, it is crucial to have regular face-to-face meetings with your team and frequent non-work related video calls to foster these relationships. In addition, organising team-building events once or twice a year helps improve team engagement. For example, at The China Desk, our management team ensures a quarterly engagement trip to visit all China Desk employees and gain insight into their challenges and opportunities in business. This promotes solid relationships and a sense of camaraderie within the team.

Working from home

Whether working from your home office or your Garden Shed, it’s important to remember that many Chinese employees may not have the luxury of space at home. Due to the high population density, most people in China live in small apartments with only 1 or 2 bedrooms, making it difficult to have a separate office room.

Additionally, office amenities may be limited, causing working from home to be less prevalent in China than in the West. Instead, team members in China may opt to work from a local café rather than from home.

At Kinyu, we understand these difficulties and offer The China Desk as a flexible workspace option for your team members in China. This way, they can come and go as they please. So it’s crucial to think twice about the remote working options in China and ensure you have the correct set-up to make your China team member thrive! Download a case study, or book a call to learn more about The China Desk and how we can empower your employees!

The post Hiring Remote Workers in China: Key Things to Consider appeared first on Kinyu.

As the world celebrates International Women’s day we thought it would be a great opportunity to share more about the role women play in China supply chain. Kinyu SCM prides itself on having a 50:50 gender ratio, and this week we were delighted to interview Cece Tang, Head of Guangzhou office for Hays international. In addition to running the Guangzhou office, Cece is heading up Hays’ ESG business unit. Cece has over 10 years’ experience developing teams across major divisions such as Engineering, Supply Chain, IT, HR and Finance.

Here is what Cece had to say about women in supply chain:

Q: Cece, lets start with the work that Hays does for Procurement and Supply Chain in China.

A: Supply Chain & Procurement is one of the best performing teams at Hays. We support companies across Consumer, E-commerce, Manufacturing and 3PL businesses to place key Supply Chain professionals.

Q: How do you feel the role of women in supply chain has changed over the last 10 years?

A: A few years back the most popular roles in Supply Chain were procurement functions, where we could only see females in Junior Buyer positions but rarely met female Procurement Managers or Directors. It could be that a manager role required extensive travel & companies seemed to prefer to have men in such roles. In recent years this remains unchanged. However, along the years “supply / demand planning” and “logistics” have become a more critical function and play a key role in overall supply chain. Across 2022 Hays filled more “planning” roles than “procurement”.

I don’t see a strong preference on male/female for these roles and I believe it’s a real opportunity for females to step up into a truly senior role in overall supply chain management. I do hope the stereotypes on women having less flexibility to travel can change; and I also hope female candidates who actually get the opportunities offered can prove that.

Q: In your experience with placing these roles, how many female applicants/candidates do you receive, and how many clients have recruited women?

A: Generally in procurement roles I rarely see any female applicants. In other roles such as planning, overall Supply Chain management, logistics, we see some female candidates but overall for Procurement & Supply Chain, there are far more male candidates than women.

Q: Are there any particular roles where the placement of women is more prevalent? Any roles where placement of men is more prevalent?

A: In some planning/demand planning, Customer Services / Logistics roles where a “detail oriented” character is required, clients may tend to have a preference on female candidates; while in “Sourcing” and “procurement” roles where strong negotiation skills or heavy traveling is required, then there may be a preference for male candidates.

Q: What do you think companies/local government could do to attract more female talent into the workplace?

A: Removing unconscious bias and conduct behavior based interviews during the qualification process among male/female candidates is the first step to providing equal opportunities. By not categorizing female/male based on gender differences will then naturally lead to a better analysis on competences. I won’t say offering a hybrid working model is beneficial to attract females – as believing women have a higher demand of work/life balance is already a stereotype. However, companies who offer flexible hours / working days will definitely attract a more diverse group of candidates.

Q: Where do you think China is in terms of Gender equality – what is your opinion on Gender pay gap?

A: Hays has been putting huge efforts to drive gender balance and we are now at 53% female in our senior leadership team globally. There is no obvious pay gap if its the same role however I rarely see a female applicant for a General Manager / MD position in Supply Chain. I’m really hoping to see more women driving their career to the executive level in Supply Chain.

Thank you, Cece for your time, and we look forward to placing more women in supply chain roles with you soon! If you need some recruitment expertise in China, feel free to get in touch here.

The post <strong>IWD – The role of women in China Supply chain, Q&A with Cece Tang from Hays Guangzhou</strong> appeared first on Kinyu.

In addition, the number of women in leadership positions in China has steadily increased over the past few years. As a result, in 2020, the proportion of women in senior management positions in Chinese companies reached 8.5%. This number increased from 25.9% in 2015, according to a report by the National Bureau of Statistics of China.

A high-ranking member of the Chinese government has emphasised the importance of women in China’s development, stating, “Women are an integral part of China’s development, and their contributions are crucial to our success. We must continue to work together to create a more inclusive and equitable society, where all individuals are allowed to succeed.”

Although it is essential to recognise China’s progress, there are still many areas where women face discrimination, including education, employment, and healthcare. While Kinyu Supply Chain Management always promotes gender equality in the workplace, we want to increase these efforts over the next year. By empowering the female members of our team, we hope to do our part and work towards a more inclusive and equal society. Want to know more about Kinyu and our Inclusivity and Diversity policies? Feel free to get in touch!

The post International Women’s Day 2023; How is China Contributing? appeared first on Kinyu.

As mentioned in the opinion piece written by Kinyu CEO Benjamin King, the reality is that China will remain a central part of most supply chains for many years to come. The result is that total diversification is unrealistic. However, more and more countries are looking at re-shoring or at least nearshoring for some components and assembly.

So, if you plan to diversify, you may need to reconsider the size of your team. How will downsizing affect your China team, and what are your options? Here are a few points you should consider:

Developing a new team structure

You will most likely need to rethink your China team organizational structure when downsizing. It may not be as simple as letting a couple of people go. Entire departments or functions may have to be cut or indeed merged. As a result, it is much better in the long term to draw up your new structure from scratch instead of reshaping what you have now.

Who to keep on the ground

Once you have your new structure, you must work out who can best fill these roles. Again, you will have to balance experience against versatility and long-term planning. Whilst some team members who have been with you longer will know more about the company and operations, they may not necessarily be able to adapt to your new structure.

Downsizing, redundancy and budgeting

Before making any decision, you must understand all the impacts of letting your staff go. It is never an easy conversation, but preparations can be made in advance so that you are in control of the situation.

The cost of redundancy will always be a factor, as people who stay with you longer will be entitled to a more significant pay package. Before making any decisions, seek advice on the costs and make sure your management team has budgeted for this.

Outsourcing Administrative functions

If you plan to hire an HR team or accounts department, it’s worth checking the outsourcing options available. For example, it is possible to outsource the financial controller role to another firm; the firm’s representative can safeguard your company chops, deliver monthly P&L, and upload payments to your banking system for your approval. The same goes for HR; since your team headcount will be smaller, such an operation may not be so complex. Therefore, this is an effective way to downsize your operation whilst continuing to run it smoothly. Of course, you must work with a licensed and professional services firm for this part. Kinyu has a partnership with CW CPA, which provides this service alongside many others.

Closing your entity

When downsizing your team, you need to ask yourself: do I need a company to operate this, or am I able to do it myself? Some scenarios may require you to keep your entity. For example, if you use the entity to export or as a sales operation. However, if it’s mainly to house your sourcing operation, it’s not strictly necessary.

Closing your entity is not a straightforward process. Just like opening a company, there is a lot of paperwork that you will need to file with the local government bureaus, and it takes time to close a company. However, it will allow a light-touch operation with a quicker exit strategy.

Not sure where to start?

The China Desk supports companies that prefer to have a light touch operation. As part of our strategic HR and management offering, companies can cost-effectively maintain operations in China. If you find this task a lot to digest, feel free to get in touch to see how we can help.

The post Downsizing your China team, what do you need to consider? appeared first on Kinyu.

What is Employer’s Liability Insurance?

Before we go into detail, it is essential to remember that China labour law is very much pro-employee. In a dispute, the employee will have a distinct advantage over the employer, and it is the employer’s responsibility to provide a safe working environment.

So it is essential to have insurance and a strict code of conduct at work.

Employer’s Liability insurance covers damages for claims from an employee in the event of personal injury or death whilst employed by your company. This cover includes all work-related events, including, as the Bank of China has put it:

• The accident happens during work, in the workplace, and for work-related reasons.
• The accident happens before or after working hours and in the workplace when an employee engages in job-related preparation or ends work.
• The accident happens during work and in the workplace when an employee faces violence whilst performing duties.
• The employee’s disease is diagnosed and identified as an occupational disease.
• Suffering from an injury due to work or missing due to an accident during the workout period.
• Suffering from traffic accidents injury on the way to or from work.
• A death caused by sudden illness or after the rescue invalidly within 48 hours during working hours and in the workplace.
• Other situations as agreed in the insurance contract.

You may have read in our social insurance blog that social insurance often covers injury. However, such insurance far from covers the potential liability undertaken by an employer, so ELI is an absolute must.

The compensation amount will include medical expenses, legal fees and any other financial compensation arising from the injury.

So how do you make sure your cover protects you against such claims?

Kinyu’s insurance policy will cover all personnel employed under The China Desk. You can learn more about our policy here. If hiring personnel on the ground through an HR agent, you must clearly understand the policy and how it will affect you.

Different working environments will require other policies, so if you have a company in China or a partnership, it is best to seek advice from an insurance broker or professional.

What providers?

Some prominent providers are PIngAn, Taiping and Zhonghong, but many companies provide insurance to cover different occupations. Some examples of brokers include Marsh and Asian Risks. It is worth speaking to a broker to get good guidance on the best policy for your circumstances. The Kinyu Resource Platform has HR consultants who can advise you on the best policy.

What does it cover, and how much?

A basic example of an insurance policy is as follows:

• Up to CNY 1,000,000 for accident/death
• Up to CNY 100,000 for medical support
• In-patient subsidy is 150 CNY /day, up to 90 days
• Income subsidy during treatment, 150 CNY/day, up to 90 days.
• 24 hr coverage.

Please note this does not constitute an offer of insurance but only indicative information. All policies come with extensive terms and conditions attached. Please contact a broker or insurance company for professional advice.

What other precautions should I put in place?

Health and Safety: It’s essential to have robust health and safety guidelines for all employees. You should not allow your team members to travel for work without giving prior knowledge to your China HR team.

Geography Coverage: Most policies only cover mainland China and do not include Hong Kong, Macao or Taiwan. Therefore if your employee needs to travel for work outside of Mainland China, you must consider additional cover.

High-Risk Areas: There are some areas in Mainland China where insurance does not cover elements of medical expenses. These areas are not necessarily that obvious, so it is essential to check the specific policy details

Salary, Age, and Occupation: These are factors you must consider when evaluating which coverage is best for your company.

Factory/supplier ELI: If your employees have to visit factories or other areas with increased occupational hazards, those companies may not have appropriate systems or adequate insurance. Unless certified, your employees must not do anything requiring training on these sites.

Congratulations on making it through this article! There is a lot to digest, but it’s all imperative when operating in China. If you have more questions about this and hiring in China – feel free to get in touch.

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