Forbes magazine has announced that the hottest job in China right now is... (drum-roll please) HR! (see Forbes - Get Me Personnel! By Russell Flannery). That's right, often wrongly maligned and considered a cushy job. Human Resource management in China is both critical and insanely difficult. One VP of HR listed some of their problems including employees selling company technology, sales staff working for rivals, and nepotism.
My own contacts say it has never been so difficult. That being said, the challenge of the position is being reflected in the growth in salaries. In 2004 and 2005 wage growth for HR executives was 20%, with typical salary for a top HR executive in a multinational in China now US$97,000. Not too shabby at all.
One major issue that companies are facing is how difficult it is to conduct background checks on candidates and new employees. Often references are also forged or referees are loathe to provide negative references for fear of repercussions. This is one factor that drives the Recruitment and Headhunting industries in the region. It is often safer and easier to headhunt from a competitor than it is to consider candidates who aren't currently working within a multinational competitor. The fact that they are sourced from one of your competitors gives a (albeit sometimes false) sense of security.