Wednesday, July 25, 2012

Talent: China's Hottest Commodity

I was interviewed for this article on China's talent war by Chris Hawke and Sam Waldo in the Cheung Kong Graduate School of Business Magazine that ran this month. The complete story can be found at: are excerpts:

As the war for talent intensifies, Chinese companies seem to be outdoing MNCs for the first time ever Jena Jiang was the second member of Halma’s China team, hired to head recruiting in 2006. At that time, the British hazard detection and safety technology conglomerate conducted its Chinese recruiting online through just three recruiting websites. In the intervening years, Halma has experienced increasing difficulty in attracting and retaining qualified talent. “From 2006 to 2008, it was much easier to recruit entry-level employees or finance, marketing, and sales staff. From 2009 up to now, our HR team has spent more time on internet recruiting and got fewer CVs”, says Jiang. Turning to social networking sites like Sina Weibo and LinkedIn to draw more applications led to disappointing results.

Jiang and her team became more proactive, posting available positions on Tsinghua University’s online career message board and engaging professional headhunting services. Halma is not alone in its struggle to build a strong team in China. Hiring and retention have become difficult for multinational corporations (MNCs) in recent years. Last year, only a quarter of graduating students listed MNCs as desirable employers. That figure was 50% in 2007 and 66% in 2004, according to surveys by recruiting firm ChinaHR, a company owned by Monster Worldwide. Hiring is only half the battle – retention is another struggle. “It is not uncommon for MNCs to face 20% turnover or higher in China, a number that would raise major warning flags in most other markets,” says Ben Cavender, Senior Analyst with China Market Research. MNCs are not the only firms with high turnover, but they are the ones who are struggling more to attract potential employees. Alexandra Hendrickson, Executive Vice President of executive search firm DHR International, has both Chinese and international clients. Hendrickson uses 30% as a base turnover rate. “If your turnover rate is at 30% or above, it’s a total disaster,” whereas “If you can get it below 10%, that is considered really good,” Hendrickson says, though she knows rare companies that have achieved rates of 4 or 5%. …..

A Porous Glass Ceiling : Some MNCs have become their own worst enemies in employee retention by setting up unseen barriers beyond which Chinese employees fear they will not be promoted. Alexandra Hendrickson gives an example of Fang, who worked at a large industrial employer for 11 years. Fang’s expatriate boss’ tenure would last several more years, but the company had already told Fang that his supervisor’s position would be filled by another expat. Without the prospect of career advancement, the company lost an employee who had been with them for over a decade. The mere idea of a glass ceiling is toxic for employee retention. This is one reason why MNCs have been taking visible steps to localize management. The American Chamber of Commerce in Shanghai’s 2011-2012 China Business Report found that 56% of the American companies polled have over 75% of senior management positions filled by Chinese nationals – a clear demonstration of just how thoroughly many foreign firms have localized their staff in China. Though it has not vanished, the glass ceiling for Chinese employees is certainly higher and more porous than it used to be. The concept of the glass ceiling nonetheless......

Try Honey: Competitive Chinese firms are here to stay, and MNCs have no means of returning to their monolithic dominance of the Chinese high-value labor market. But there are a number of factors that MNCs can and must tinker with in order to improve their image as employers. For one, MNCs should demonstrate a clear commitment to prioritizing work/life balance. Also, MNCs should face poaching with salary flexibility. Alexandra Hendrickson recalls advice she has given to clients in her Shanghai office for improving retention. “At lower levels, create programs for employees – company picnics, employees’ clubs, birthday celebrations, giving awards. “At higher levels, (institute) training programs. Make Chinese employees feel they are being invested in, that the company cares about them. Training in the home country is a very, very powerful way to convey to an employee that they are valuable.” Most important of all is making career advancement opportunities clear. Hendrickson says “The reason I see candidates in my office most often is that their employers do not articulate possibilities for employment in the company.”.....

No comments: