Six Strategies for Retaining Talent in China

Two of the biggest HR challenges faced by companies moving to China are attracting local talent and retaining this talent. Last article focused on the former, providing you with valuable advice on how to establish a strong employer branding strategy. In this article I address the latter by presenting six simple strategies to ensure your talented recruits are a long-term investment for your company, rather than just brief encounters.

The HR scene in China is an incredibly competitive environment, and many Chinese companies employ determined and innovative recruitment strategies. There is a very real possibility that even once you have successfully recruited a talented new team, your employees may be headhunted and cunningly conscripted elsewhere. At a time when interest in working for MNCs is waning, and when over a third of Chinese employees are considering job-hopping, retaining talent has never been more important.

The following six strategies are clear counsels for ensuring your employees value you as an employer, so that if opportunities arise elsewhere, you are not left high and dry.

Strategy 1: The Right Motivation

Your main employee base, Gen Y, are a highly educated group who are distinctive from previous generations in various ways: they are a generation of independent only-children; they are more likely to challenge stereotypical hierarchies faced in traditional business set ups; they are likely to be far more inquisitive in their approach to work; money alone no longer motivates them as it did previous generations; they seek a combination of money and meaning to motivate them: in short, when they are given a task, they need to know why.

Motivation can be divided into two categories:

Extrinsic Motivation: Often associated with the analogy of a strict taskmaster with a whip, extrinsic motivation implies top-down orders that should be adhered to with unquestioning compliance. It usually flows down a steeply hierarchical chain of command which in more contemporary times will likely be met with some form of resistance. Although increasingly seen as outdated and negatively traditional, extrinsic motivation also encompasses financial motivation, such as commission, pay incentives and bonuses.

Intrinsic Motivation: Here, the motivation is more self-propelled, and involves understanding why a task is being completed. For the more questioning, curious Gen Y, who are no longer content with simply being told what to do, this type of motivation is far more successful. Explaining the reasoning behind projects helps to instil meaning so that employees understand what they are working towards and what the rewards will be.

A team of intrinsically motivated employees can be achieved within your company by ensuring that employees feel valued and empowered in their roles. Maintaining high involvement from senior employees can aid this, as frequent feedback and two-way discussions on projects will provide a more personalized experience for individuals in the company. Goals and development plans may be set, both personal and professional, giving employees greater responsibility within the company, and allowing them to keep track of their development.

With measures such as these in place that encourage motivation to develop naturally from within, you are less likely to lose your talented recruits to other companies with more lucrative offers.

Strategy 2: Onwards and Upwards

Another pertinent way to give your employees meaning in their roles is to show that they have a clear path of progression within the company. Chinese employees’ interests increasingly lie with long-term career prospects, and with opportunities for professional and personal development. Beware, however, of the Chinese New Year. Around this time, employees are looking for promotions, pay rises, progression and new beginnings. Many will return to work with a fresh bout of motivation and enthusiasm, and heightened expectations. If you are unable to provide the avenues for this, then you will swiftly lose employees who see no future with you. It is especially easy around this time of year for companies to ‘steal’ employees from other companies, especially if people are not content in their roles, or feel they have reached a glass ceiling.

Whilst the right words will easily attract your employees elsewhere, if you show that you can provide routes for such ambitions, employee retention will be higher. Provide opportunities for growth, and allow employees to achieve not only the company vision, but also their own personal visions. Empower employees by giving them access to large projects, enrolling them onto training programs and giving them higher responsibilities, showing that you both trust and value them. Opportunities like this can even outweigh requests for pay rises, as although remuneration remains a large factor in employee retention, huge worth is now placed on progression.

Strategy 3: Keep it Local

Gen Y constitute a large proportion of the workforce in China and are the country’s future leaders. The last thing they want to meet is a barrier to advancement, so make sure any glass ceilings in your company are well and truly smashed. A good way to demonstrate your dedication to the progression of local employees is to make sure a good proportion of your company leadership roles are filled by Chinese employees.

Indeed, trends are showing an increased reliance on Chinese leaders, especially as expats can make for very expensive employees, can be complicated to relocate, and are increasingly deterred by China’s rising pollution levels. There are many advantages to Chinese leadership, not least of which being that Chinese leaders are substantially better at relating to and motivating other employees. They also have a much wider network of contacts in the Chinese business marketing scene. This is advantageous as it enables greater participation in Guanxi, or networking with Chinese characteristics. Furthermore, in a diverse team, it is important to build bridges of understanding between employees from different cultures, and Chinese leaders will help to achieve this.

Another huge benefit of having Chinese leaders is that they are very good at attracting further talent, resulting in a snowball effect as more and more prospective employees seek to join your company. This will generate a conveyor belt of local succession possibilities, improving the long-term sustainability of your company in China.

If employees see that there are local people in leadership positions in your company then it also acts as solid proof that you are a good and non-discriminatory employer who can provide excellent opportunities for fulfilling ambitions. With this knowledge, employees will be far more likely to stick around, which is vital for team cohesion and continuity.

Strategy 4: Stay in Tune with Local Values

Wherever you are in the world, it is important that you uphold strong company values. A friend once told me “I keep my values in my suitcase. They come with me wherever I go”. So, take the time to figure out exactly what principles and standards you want your company to exemplify, and never leave them behind. Here are a few suggestions on where to start:

Studies have identified integrity as one of the most valued employer characteristics. Employees will place great importance on a trust-based work culture. Fulfil promises, keep to your word, and demonstrate reliability, and you will find that employee loyalty and respect will be far augmented.

Another company value is cohesion amongst employees, which in turn will help communications flow easily and will boost levels of cooperation between team members. A good sense of camaraderie amongst team members boosts a sense of inclusivity and gives the company more of a family feel; a value which is very important in China.

Respect your employees, and they will respect you. Be sure to listen to everybody’s views and ideas, and nurture their progression so that each employee feels like they have an important place within your company. In this way you will come across as a company that cares, and the sense of welfare this brings is an important factor in employee retention.

Portray your company as being a component in a global network. A global outlook is not only vital in business but is also very attractive to employees. Opportunities overseas, although pricey, have been shown to be very good tactics for employee retention.

Meanwhile, no matter how global you are, still maintain a strong sense of national pride. Employees will notice and appreciate that you value the country you are in. Indeed, one of reasons behind the deteriorating interest levels in MNC employment in China is the national rhetoric many domestic companies are employing in their recruitment drives, so make sure you allow a little patriotism despite your globalism!

Finally, have fun. This value can often be overlooked, but it is possibly one of the simplest ways to boost employee retention. If you make the working experience enjoyable, employees will be sure to hesitate before moving anywhere else. If there is something to celebrate, celebrate! This too heightens camaraderie and helps employees feel valued and part of the family, all of which contribute greatly to employee retention.

Your company values should be at the very core of your organization: step back every now and again to make sure that every component of your company is still embodying the values you set. If your company values remain unwaveringly strong, then it will improve not only the resilience of your company image but also the unity of your team.

Strategy 5: Walk the Walk

Whilst money is the main reason for people leaving jobs, good leadership can be one of the main things that keeps people in a job. There is often a Western bias in leadership style, with a general assumption that because the globe’s most competitive countries are Western, the Western leadership style will be successful wherever implemented. This, however, is not true. A recent study by the EU SME center has done a comprehensive analysis of businesses in China and Europe to identify universal management strengths. These include:

Empathy: be understanding and aware of how your employees are getting on, both professionally and personally. If you are approachable then any problems will be far more easily dealt with than if they remain buried below, only to simmer and boil over at a later stage.

Excitement: if you are enthusiastic about a project, then this will show through, and will filter down to all your colleagues. Excitement spreads, and encourages everybody to put maximum effort into projects. It also keeps people on their toes, and makes for a more engaging and varied work experience.

Communication: this harks back to earlier discussions of intrinsic motivation and team cohesion. Successful communications result in more successful results which result in better team morale overall. It works both ways, too: two-way traffic of ideas and feedback allows for a more inclusive and open working environment.

Innovation: be creative, and think of new and interesting ways to approach projects and challenges. This will not only be inspiring for your employees, but will place you in a more advantageous position in the competitive Chinese market. Be open to change, and flexible, so that you can adapt swiftly. The market is not a static entity.

Integrity: be open and honest with your employees. And if you are saying or advising one thing, make sure you are not doing the opposite. If you are going to talk the talk, you also need to walk the walk. Your employees will have a great deal more respect for you when this is the case.

Ensure that your leaders demonstrate strong management skills and your employees will be more inclined to remain loyal to your company, and will feel more proud of the establishment they work for.

Strategy 6: Drop Down a Tier

The East is often considered to be the powerhouse of China. Full of opportunities, it has grown exponentially in a very short space of time, experiencing rapid economic transitions. There has been a mass exodus of migrants to go to work in first-tier cities such as Shanghai, Beijing and Guangzhou.

However, the focus is shifting. The second-tier cities are now taking the lead in terms of entrepreneurship and growth opportunities, and the forecasts are very optimistic for businesses establishing themselves in this middle tier. You can read more on this in Maxxelli Consulting’s article on China’s second tier cities.

Further to this, in larger, first-tier cities, migrant employees do not tend to remain in the same position for long, often opting to return to regional cities closer to home and family. Resultantly, staff turnovers are very high, with estimates suggesting a turnover rate as high as 45% in 2014. The numerous second-tier cities are thus more attractive from an HR perspective too, due to the comparatively lower staff turnovers as people can work in closer proximity to home.

So, when considering where best to locate your company, the west is an attractive location not only for the plethora of business opportunities emerging there, but also from an HR perspective. Rather than expecting prospective employees to come to you, go to them, and retention levels will be significantly higher. And remember, if people are relocating to work for you, make it easy for them. Sustain the support throughout their employment, consider housing assistance and education allowances, and make sure that you are aware of the social security requirements. For more information on this, Maxxelli Consulting have written an article outlining some things you need to consider regarding social welfare benefits for Chinese employees.

Conclusion:

Whilst these six strategies should be followed anyway for good business practice, they are especially targeted at helping you to build a sustainable, cohesive and loyal team of employees, who will think twice before job-hopping. Think intrinsic motivation and strong opportunities for progression, top management skills and the values of local leadership, a good company ethos and opportunities beyond the first-tier.

I hope this guide will have helped you to alleviate some of the issues faced in talent recruitment, but if you would like further advice on HR solutions in China, please do not hesitate to contact me at [email protected]