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Project part-financed by the European Union
Recruiting staff is one of the most taxing issues facing Western business in China, as companies compete to attract qualified people. Retaining them after they have been recruited is also exercising many. David Arkless of Manpower Inc explains why it is crucial that they adapt their strategies to the local market.
For Western-invested business in China, whether wholly owned or in a joint venture, a key issue for many is the recruitment, retention and engagement of their employees. Perhaps more so than in other markets, perception and reality can be strikingly different. The perception is that employees are motivated solely by how much money they earn and that they will leave jobs at the drop of a hat, if someone offers them more money.
The reality is, of course, not as simple - nor is it as gloomy. The truth is that with careful management, businesses can ensure that they keep, motivate and offer their staff career development opportunities. In fact, a recent study by Manpower found three in five Chinese workers regard career development and training to be the most important factors when considering whether to take a job.
Turning to the employer’s perspective, what talent management challenges are they faced with? That depends, first and foremost, on the level of the staff member and their position within the organisation.
When it comes to senior managers, the biggest issue is a severe shortage of talent. In Manpower’s assessment, 40 per cent of employers have difficulty filling senior manager positions, and talent shortages will only continue to worsen, exacerbated by demographic shifts around the world.
For middle managers, there is now a growing pool of candidates, but still, demand exceeds supply. The lack of supply, in turn, is creating a second problem: rising salary costs.
For blue-collar workers, broadly speaking, there is a ready supply of talented, willing candidates. However, on the coast and in major cities, we are just starting to see shortages, a trend which has become especially noticeable over the last two years. This shortage in qualified workers, too, is pushing up wage rates and overall costs.
Finally, for entry-level white-collar workers, the situation for employers is perhaps the easiest. This is partly because there are plenty of people available who can fill these roles and partly because there tend to be fewer jobs for them to fill, keeping wages at this level steady.
In Manpower’s study, we asked people to identify the reasons why they leave their jobs. Surprisingly, only 15 per cent indicated that their main reason for leaving was the prospect of earning more and receiving better benefits elsewhere. Conversely, two-thirds of respondents cited career development opportunities as the real reason for leaving their jobs: in other words, in their keenness to advance their careers, Chinese employees believe other companies will offer them better prospects.
The bottom line is that China is faced with a talent paradox. The world’s most populous country of 1.3bn people has a rapidly growing economy, as well as talented, educated people with an eagerness to learn and work. However, the economy is growing so fast, and there are now so many businesses developing, it is difficult to find the right people for the right jobs.
This shortage of people with the right skills is acting as a check on companies’ growth plans, as well as causing retention difficulties because managers and employees who do have the requisite skills and knowledge are regularly leaving for jobs elsewhere. Chinese employees recognise their market value and are not afraid to bargain for better opportunities.
Foreign-invested companies should disregard developed countries’ global guidelines for salary reviews, since they are irrelevant in developing markets. In China it is not uncommon for some managers to receive an annual two-digit percentage salary raise. The frequency of salary reviews will depend on how sought-after the employee is likely to be; for hard-to-fill positions it could be more than twice a year, or in the form of a large increase in the employee’s annual salary package.
It is also important to realise that internal promotion may be considered more important for many employees than changing jobs to a higher level. Bringing employees into an organisation at a lower level and moving them up the ladder quickly can be a good management technique, demonstrating respect and employee engagement.
This approach also makes business sense. In Manpower’s experience, those businesses that devote resources to retaining staff through career development find the approach to be more cost-, time- and business-effective than those that simply focus on recruitment. A commonly held misconception is that because China has an abundance of people, anyone leaving a job can easily be replaced.
Interestingly, Western businesses have the advantage when it comes to attracting talent in China, as three-quarters of participants in Manpower’s study would prefer to work for a wholly foreign-owned company, and a further 9 per cent were keen to work for joint ventures.
However, the key to businesses’ success is understanding the Chinese culture, values and working practices, which are very different than those in the West. If foreign-owned companies take time to understand the cultural value and importance attached to career development, they can begin to develop effective attraction, retention and engagement policies.
Organisations need to understand the ‘push and pull’ factors that influence employees’ decisions. They should develop an integrated approach to employee attraction and retention if they are to compete for talent, particularly at the management and executive levels.
Manpower China has developed an approach called the ‘workforce optimisation model’, which outlines five practical steps for successful employee attraction and retention. These five steps are:
By focusing on these five areas as a holistic solution to employee engagement, companies operating in China can develop tailored HR policies and practices to help them attract, retain and expand their talent pool in China.
The HR goals in China are the same as elsewhere in the world; for those that can develop new approaches for the same ends, and turn cultural differences into a help rather than a hindrance, there is virtually no limit to the growth they can enjoy.
Article written by David Arkless, senior vice-president of global corporate affairs for Manpower Inc. Manpower first entered the Greater China market in 1964 and today the company has 58 offices across Greater China and 37 in mainland China.
Courtesy of China-Britain Business Council: www.cbbc.org
