EMPLOYEE RETENTION - FROM A CHINESE PERSPECTIVE
- Published in Shanghai Star Business Journal 25 February, 2008
For Western companies operating in China many false assumptions flourish regarding local employees’ main reasons to leave a company. The cost of losing good local talents starting to learn company procedures and common practices is high. However, few Western companies understand how most Chinese employees decide their career move.All companies want motivated, high performing and professional employees. Our research has verified that some companies have consistently better employee retention and productivity than others. What do these employers do differently?
•Are they keeping employees with high salary incentives? Not necessarily.
•Are they promising employees trips to foreign countries? Not necessarily.
•Are they attracting them with educational programs? Sometimes.
•Are they less demanding of their staff? Absolutely not, many are more demanding.
So, what do virtually all these employers do differently?
Our research shows that Chinese employees will choose to stay or leave a company based on evaluating the following conditions, listed in order of importance:
1What personal relationship do I have with my closest boss?
2What experience and network (guangxi) do I have in this industry sector and company?
3What is my company’s situation and maturity level? (Career Opportunities)
4Does the competitor satisfy points 1-3 above?
5What is the competitor’s offer (Remuneration and Title)?
Most Western managers are expatriated to China on a 2-3 year contract, following which they will return home. When this happen his Chinese employees has lost 2-3 years of relationship and trust building, which must be rebuilt with a new manager. The personal relationship with the new boss is subsequently the most important criteria to deciding whether to stay in the current company or to select a new job. Rebuilding a new manager relationship in the current organization or with the competitor’s company often provides an identical challenge to the Chinese employee. If a competitor tempts the employee with a higher salary, title and apparent career opportunities, why should the employee NOT leave their existing employer and seek his fortune, one step up the ladder, with a competitor?
From our experience, employee retention does not start with selecting the right CHINESE employees; it starts with selecting the right WESTERN manager to run Chinese operations. Here are some keys to improve employee retention in China:
•Carefully evaluate and select the management team.
•Assign expatriates dedicated to a long term career in China.
•Have a fair and simple performance management system in place.
•Have sincere annual career discussions with employees regarding their future in your company.
- Tomas Gustafsso