China is characterized by rapid change and economic growth. Yet, this massive country with a population of 1.3 billion has a perplexing shortage of talented people that threatens the future growth of foreign and domestic companies.
According to the latest Manpower Employment Outlook Survey released in September 2007, hiring intentions in China fell to the lowest level in more than a year. Shortages are the most severe among senior managers. The 2006 Manpower Talent Shortage Survey indicates a greater need for managers and executives in China than in other countries.
Multinational corporations have a distinct advantage in competing for talent in China, as nearly 75% of Chinese employees would prefer to work for wholly owned foreign companies rather than joint venture companies or wholly owned Chinese companies, according to Manpower research.
Successfully working in China requires using special human resources techniques and practices, which stem from understanding the unique Chinese culture and values as well as the country's working practices.
Based on our experience in China, Manpower has developed a Workforce Optimization Model, which consists of five practical strategies for successful employee attraction and retention.
- Create a learning organization. Quite simply, teach employees something new every day. This may include giving employees projects that go beyond their current job responsibilities. Learning is a priority for Chinese employees because they are acutely aware of the limitations of their educational system and anxious to acquire marketable skills.
- Appoint competent leaders. Key skills for managers are coaching and communication. This is because managers in China are highly respected authority figures that must be able to clearly explain company strategies while linking employees' personal goals to business objectives. Chinese employees also respond best to hands-on leadership and appreciate having a role model to demonstrate what is expected of them.
- Build an appropriate organization and culture. It is critical for companies to appreciate and respect cultural norms and practices. These include encouraging a simple management structure and articulating the company's values. To provide credibility, managers must live and breathe the company's values.
- Provide competitive compensation and benefits packages. The tight supply of managers in China means frequent salary reviews may be needed to keep up with the market rate. But while salary is important, it's not the only factor. Companies may want to consider offering other benefits such as tuition reimbursement, housing allowances, insurance and long-term incentive plans.
- Select the right people. Employers need to anticipate what they'll require of employees in the future to ensure that job descriptions are realistic. Employers that are open, honest and patient with candidates during interviews are more likely to find employees that share their values. Given the rapid change in China, skills such as adaptability are just as important as experience for most roles.
The potential rewards are tremendous for foreign-owned companies that develop an employment strategy that fits the culture and values. This is because the preference of Chinese workers to join a foreign company may also spill over into preferences for products and services made by those companies. Companies that can turn cultural differences into a help rather than a hindrance have the potential to enjoy boundless growth.
Jorge Perez Izquierdo is senior vice president, Manpower staffing with Manpower Inc. To obtain the Manpower white paper, "The China Talent Paradox," go to www.manpower.com/ResearchCenter.