The Shanghai Scramble

With R&D talent scarce, companies like Cisco hire inexperienced workers and put them through management kindergarten

Young Chinese engineers like Chen Yiqiu know what it's like to be wanted. With so many multinationals opening or expanding research and development operations in China, top university graduates often get lots of enticing offers. As the 25-year-old Chen finished her master's degree in telecommunications from Shanghai's Fudan University a year ago, she received offers from Cisco Systems (CSCO ), Intel (INTC ), and Royal Philips Electronics (PHG ). Intel and Philips offered more money, but she ended up choosing Cisco, where she had previously worked as an intern.

Why? Quality of life played a part. Chen likes to bicycle, and the Cisco R&D center is just a 10-minute pedal from her home. She calls it "a huge convenience."

Chen's boss, Jan Gronski, managing director of Cisco's Shanghai research center, keeps on his office wall a big city map dotted with red stickers. Each one represents an employee. Many of them, he says, live within 3 miles of the office. In Shanghai, as in many other big Chinese cities, the competition for talent is so intense that executives like Gronski have to sweat the smallest of details to keep employees happy. In Cisco's case, that means scheduling shuttle buses to and from the nearest subway station, and even providing some fun on-site.

Despite China's huge population, recruiters say there's a crunch for research talent—especially for experienced English-speaking managers. Cisco's Gronski has managed to build a 500-person division in three years. But the average age is only 27. And he predicts the run on seasoned managers is going to heat up further. "We see all these companies coming to Shanghai," he says to the sound of a Ping-Pong game in the hallway. "The crunch is inevitably going to come."

What's a manager to do? One option is to poach from the competition. That's how Gronski recruited his No. 2, Chris Dong, head of operations at the Shanghai center. But wrestling Dong away from Microsoft while fighting off an eager Intel took months—and was a job in itself.

The other option is to hire talented but inexperienced youngsters and train them internally. This is Cisco's approach. Gronski and Dong have opened "Cisco Clubs" at three Chinese universities, giving students a chance to work with Cisco engineers. For those on staff, Gronski runs management seminars every Thursday. He schools young managers on everything from giving presentations and decision-making to speaking their minds. "I call it management kindergarten class," he says. The current bunch has no time to dawdle. In the year ahead, Gronski expects to add as many as 250 workers—most of them green. And experienced managers? Gronski says: "We are still thinking."

By Bruce Einhorn

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