The embattled telecoms pair of Huawei and ZTE (HKEx: 763; Shenzhen: 000063) are embarking on major hiring sprees outside their home market, seeking to not only import foreign expertise but also foreign faces as they try to look more global and less Chinese. That’s my major takeaway on reading separate reports that ZTE is launching a drive to recruit workers from 2 struggling western cellphone giants, while Huawei is also hiring thousands of new employees in Europe to cater to its largest market outside of China.
This particular strategy of hiring more foreign workers looks good to me, as it will almost certainly help to internationalize both companies. Huawei has been hiring many non-Chinese to both mid- and high-level positions for the last 5 years, though most of the faces I associate with ZTE are still largely Chinese.
In a sensitive business like telecoms, image can be a key factor in forming public opinion in the markets where both companies operate. Huawei and ZTE are viewed with suspicion in the US and Europe, where they are often seen as Chinese firms with close ties to Beijing. Hiring more foreign workers could help to change that perception, since many of the people being recruited by Huawei and now ZTE are well respected US and European professionals.
Let’s start of with ZTE, which is ramping up a campaign to recruit workers from rapidly fading cellphone giants BlackBerry (Toronto: BB) and Motorola Mobility. (English article; Chinese article) For those unfamiliar with this pair, BlackBerry was a smartphone pioneer that is now struggling to survive, while Motorola was another early cellphone leader that has tumbled over the last 5 years and is now being sold to Chinese PC giant Lenovo (HKEx: 992).
According to the reports, which cite unnamed sources, ZTE has set up a special team within its human resources department to recruit employees from both BlackBerry and Motorola. The ZTE team has only hired about 20 workers so far, but is aiming to ramp up that count over the next few months.
Meantime, separate media reports are saying that Huawei is planning to hire 5,500 new workers in Europe to serve its growing business there. (English article) The hiring plan includes a doubling of Huawei’s R&D team in Europe, which will grow to 1,700 people over the next 3 years, according to a top executive who detailed the plan in an interview. The company currently has 7,700 workers in Europe, a large figure but still just a tiny fraction of its 150,000 total employees.
While Huawei could almost certainly use more workers in Europe, I’m just slightly skeptical that market growth is the main driver for this hiring spree. The company’s sales in Europe, the Middle East and Africa were quite large at $13.6 billion last year, but the figure was only up a modest 9.4 percent.
Thus this hiring spree looks almost as political as it is practical. The announcement follows several major initiatives by Huawei in Britain last year, as it mounted an offensive there to bolster its image as a good corporate citizen and global company. That drive came after some local politicians voiced concerns about Huawei similar to those coming from the US, where both Huawei and ZTE have been banned from selling their networking equipment due to security concerns.
As I’ve said at the outset of this post, these 2 new hiring sprees look like savvy moves, as they will help both companies gain technical expertise and also improve their images. Of course we could see some culture clashes as both Huawei and ZTE try to integrate these new western employees into their very Chinese cultures. But if they can do that, then this new generation of workers could quickly become the foreign faces that each company needs to globalize its images.
Bottom line: New foreign hiring sprees by Huawei and ZTE look like smart moves to bring in new expertise and globalize their image as they struggle for recognition in the west.