Google risks China brain drain

fdpr2010

Technology companies in China have begun aggressively trying to poach talent from Google Inc. in the wake of its pledge to stop complying with Chinese government censorship rules, potentially complicating the Internet search giant's effort to continue operating in the country.

Headhunters and rival Internet executives say that uncertainty over Google's future in China has made engineers and other employees from the U.S. company's Chinese offices more receptive to their overtures. Those employees were previously much harder to woo away from Google because of staffers' loyalty to the company.

Zhao Chenglong, chief human resources consultant for Beijing-based recruitment firm Finder Hunter, said that since Google's announcement he has helped his clients poach "several" Google employees. He wouldn't specify the clients or the number, but said it was roughly the same number of Google China staffers he recruited in all of last year. Mr. Zhao says other technology companies, sensing opportunity, have authorized him to offer unusually large compensation packages to potential recruits from Google.

It's been more than six weeks since Google's Jan. 12 announcement that it was no longer willing to continue following government requirements to censor search results on its Chinese site, Google.cn. The firm said at the time it would be discussing "over the next few weeks" how it might continue operating in China despite that decision, and many observers had expected a resolution by now. But a person briefed on Google's talks with Chinese officials said this week that it could be weeks more before they conclude.

Analysts and industry executives say it is almost certain Google won't be allowed to operate the Chinese site unfiltered, but Google executives, including Chief Executive Eric Schmidt, have said they want to maintain an operation in China. Google is still trying to fill roughly 40 open positions in China that it listed on its Web site before its January announcement.

A Google spokeswoman said the firm is "hoping to find a solution with the government.... We highly value our employees and will work to find the best solution." Google employees in China contacted for this article declined to comment.

But personnel experts say the clouded outlook for Google in China makes keeping current staffers, let alone attracting new talent, difficult. "Ultimately, Google will need to resolve the uncertainty issue" in China," says Michael Bekins, head of the global technology practice in Asia for executive-search and consulting firm Korn/Ferry International Inc. "That's hanging over their head," he says. In the Chinese Internet sector, "the competition is really fierce... for that same talent."

One company pursuing Google staffers in China is Microsoft Corp., says a person familiar with the situation. The software giant, which is trying to build up its Bing search engine in China, has hired a designer from Google who is scheduled to start soon, says the knowledgeable person. A Microsoft spokeswoman didn't immediately respond to a request for comment.

Hao Wu, general manager of Daodao, the China subsidiary of Expedia Inc.'s TripAdvisor travel site, said his firm has approached Google employees who it previously deemed unattainable, and that many have agreed to talk to them. "Once Google made the announcement to possibly exit China, many tech companies were interested in poaching their employees," Mr. Wu said. "In the past we approached Google employees but very few were interested in leaving."

Internet executives say it used to be difficult to woo Google staffers in China because of its reputation for offering good opportunities and good pay. Echo Cui, partner at recruitment firm Eiger Search, says Google has unusually high requirements for applicants, often accepting only top-ranking graduates from China's top universities, and typically will offer the most competitive package to hotly recruited candidates. Google's plush Beijing office also offers video games, a yoga studio and salsa classes—amenities that might seem fairly common in Silicon Valley but that few Chinese companies provide.

Google has made efforts to reassure its China employees about the future through regular updates and meetings, and by going ahead with the company's annual Chinese New Year party earlier this month, according to a person familiar with the situation. Employees have also been invited to speak with managers about any concerns or questions, the person said.

Amy Cheng, a former Beijing-based recruiter for Google who is now director of human resources for Koolanoo Group, which operates several Chinese Web sites, said Google is still attractive to many Chinese. It's "very hard to find something [that] matches what they can do at Google" in terms of the impact of their work, said Ms. Cheng, who left Google before the January announcement.