Recruitment in China 2015 environment & employment considerations March 16,

Key Points of Presentation 1) Expect high and rising labor costs in China 2) Hire a local leader (for guanxi) and mid-level team who can learn how to do the job (for engagement and value) 3) Control your HR risk 2

2015 environment background Big Chinese companies are becoming preferred place to work. Western companies reducing headcount in China. 3 HiringFiring Alibaba Baidu XiaoMi Huawei … Microsoft Sony SAP Adobe …

Average Salary Growth 4 YearWenzhouShanghaiBeijingShenzhenXiamenDalian * increase49%25%38%21%33%29% increase14%8%11%6%10%9% Average salaries are growing at double-digit rates.

Sample Salary Ranges Position Name Years of work experience Salary range (USD) T1 cities Accountant3-718,000 – 42,000 Field Service Engineer (IT) ,000 – 58,000 Web Architect5 – 1040,000 – 92,000 Operations Director (IT)5 – 1050,000 – 135,000 Source: Kelly Services China 2014 Salary Guide 5 Salaries for sought-after positions start becoming comparable with those in the West.

Gross-Net Salary Structure 6 Don’t forget about the Social Insurance markup on top of the gross salary. % RMB Total Cost Of Employment 34, Business TaxBusiness Tax (CN)6%2, Service FeeNet Service Fee15%4, Social Insurance (Employer) Pension20%3, , Unemployment1% Work-Related Injury1% Maternity1% Medical10%1, Housing Fund12%2, Disability Fund1.6% Gross Salary 20, Social Insurance (Employee) Pension8%1, , Unemployment0.2%34.76 Medical2% Serious Disease 3 Housing Fund12%2, Salary Before Tax 16, Individual Income Tax 2, Net Salary 13,984.50

Hiring the Team 7 Consider hiring a high-level local representative and make him a real part of your business in China. 1% of everything is more than 100% of nothing.

Hiring the Team Mid and juniors 8 Don’t hire someone who can do the job, but hire someone who can learn it. - finding perfect fit will take time and may not even happen - experts will be overly expensive and prone to changing jobs (especially in IT) - growing your own team creates stronger bond between the new employees and the management team and lowers turnover rate

Labor Contract Considerations 9 Things to consider when preparing labor contract for a new hire: Tips Contract term It may be difficult to terminate a labor relationship in China before the contract expiration date. Consider signing 1-year fixed contracts with new staff. Working Time System You can use “non-fixed working hours” system for senior staff and sales. Check this carefully of you risk paying a lot of overtime hours at the end of labor dispute… Holidays Make sure that the annual leave meets the Chinese labor law bottom line. Unused statutory leaves can be cashed in by the employees at 300% daily rate. Better have someone monitoring this. Medical Insurance for Expat Staff Always. Always. Always make sure that your expat staff employed in China is covered by international medical plan, including med- evac from China (unless you want to find out how much medical taxi costs. Tip: A lot.)

Technopro Staffing Work Visa (Z) Application Process Requirements, procedure and timelines overview March 16, 2015

Technopro Staffing List of materials Documents needed for first-time application: Applicant’s side: 1.Passport 2.CV in English or Chinese 3.Copy of BA degree (or higher) in English 4.Reference letter from previous employer confirming 2 years of relevant work experience for currently applied position 5.5 passport pictures (4.5cm x 3.5cm) Company’s side: 1.Employment Contract with company in China 2.Copy of the company Business License 3.Copy of the company Enterprise Code License 4.Copy of the company Approval Certificate 

Technopro Staffing Application procedure * The passport will be held at the visa office for 7 working days during which the applicant will not be able to travel abroad. #PlaceStep# work days 1Preparation of visa application documents 2Applying for the employment license15 3Applying for the invitation letter3 4Home country Leaving to home country to apply for Z-Visa at Chinese Embassy 4 5 China Residence registration at police station1 6Medical check4 7Applying for work permit3 8Applying for residence permit*7 Total working days:37 Chinese work visa (residence permit) application is a long process. You should plan it well in advance.

FAQ Technopro Staffing Q&As Q: Can I work in China on business or tourist visa? A: You can, until you get caught. Working in China without Employment License is illegal and may lead to fines, detainment and deportation. Q: Do I have to return to home country to apply for Z-Visa? A: In some cases it is possible to go to HK rather than flying back to home country, however we recommend returning to home country for application. Q: For how long the employment license/residence permit is issued? A: Normally for 1 year, then you can apply for extension (which is simpler than 1 st time application). Q: Can you help with the application process? A: We provide support throughout the whole process, including application preparation, submission and accompanying the applicant to all checkpoints.

Technopro Staffing Contact Details TECHNOPRO STAFFING SHANGHAI, INC. 上海诚友人才咨询有限公司 Technopro Staffing Shanghai, Inc. Room 212, 2 th Floor Randong Business Building, No Wanyuan Road, Shanghai China +86-(0) *8002 Jakub Brachowski BD Manager Vera Xu Visa Service Specialist