THE CORPORATE CRUCIBLE
Vol 3 : Issue 1
THE OUTSOURCING CHALLENGE
Vol 2 : Issue 1
THE NEW DNA
Vol 1 : Issue 1

I. Attracting Talent in China
 
Historical Analysis: background on how the values on both sides (employers and employees) have evolved over the past 17 years. I will also conclude with a brief statement of where I think we are heading beyond 2007.
In order to examine the values, I want to look at how companies have attracted and retained staff over this period. This should give us a glimpse on how the market has evolved.
 
I am speaking primarily for management and executive management talent and not blue collar staff.
 
  • Early 1990’s – 1990-1995 – Calm Before the Storm
    • The build up and setting the stage for the huge human capital bull run that we are currently experiencing.
    • Beginning of the investment cycle and huge FDI
    • JV’s and Rep Offices are the norm for an operating environment
    • Hiring on education (which school you attended), language and connections are main qualifiers for many corporations at this point.
    • Job hopping really yet to start
    • Money not a major motivator
    • Gaining experience and training for employees was more important than dollars.
    • Companies were attracting talent based on “appeal” and working for a foreign company – something “new” and different from a SOE.
    • Companies were retaining by modest salary increments, and continuing training – primarily English or foreign language training
    • Primary vehicle to attract was newspaper, job fairs, word of month or FESCO.
    • Employees began to be a bit more careful when selecting companies, and brand (large company) was becoming more in vogue by the end of 94 and 95.
    • Rewards system is personal and random.
    • Generally, loyalty on both sides is not questioned.
Summary: Period of mutual respect, learning and…..It was the calm before the storm. A fairly nice balance between employer and employee. Companies who laid a good foundation during this period were better off moving forward. They even started campus recruiting and management trainee programs. Most companies did not have the systems in place nor were they big enough to prepare themselves for the coming decade.
 
  • 1995-2002 – Growth Years
    • The job “hoppiness” that we see on CV’s today starts in this period
    • Demand starts to outstrip supply – especially by 98-99 and the run up to the dot-com bubble.
    • Hiring is based on communication , achievements, and functional experience
    • Turnover starts to becomes a problem for companies
    • Professional training is becoming more common
    • Companies begin to start to implement internal Universities and training campuses (Motorola).
    • Attracting talent based on offering more monetary incentives and some additional fringe benefits. 
    • Company brand and perception in the market takes on a more important factor as well. 
    • Employees become more sophisticated “buyers” and realize that they have choice.
    • Title inflation also takes hold.
    • Primary vehicle to get talent was newspaper and then internet and recruitment firms and word of mouth.
    • Employers are not always culturally sensitive and are just beginning to learn how business is different in China.
    • Rewards systems is performance based.
    • Localization is the buzz word for companies, and many companies localized during this period.
Summary: Companies were not able to distinguish themselves enough. A name brand was important, but money in the end won out. This was driven partially by the rise of consumerism during this period – companies had to compete with the “market.” While loyalty was lacking, many employers did not invest in their employees as well and just re-hired and cycle repeated itself continuously. 
 
  • 2002-2007 – Boom Boom Years
    • Motto is hire quickly fire slowly (start with the J Welch Analogy)
    • Returnee trend – government encouragement
    • Executive education is on the rise – MBA schools flourish
    • Beginning of the PRC MNC – moving overseas.
    • Hiring based on experience, achievement and cultural fit. Language skills are taken for granted.
    • Overseas training becomes more prevalent
    • There is an equilibrium of Management Talent – senior management pay for PRC, Malaysians, Taiwanese are very similar. Even Singaporean and Hong Kong Nationals.
    • Localization is still being pushed but from year 2000 there has been a resurgence in expatriates just due to the fact that they cannot find the skill set locally.
    • Companies have started mentoring and coaching programs
    • HR is being invited to the table with management. Managers have begun to pay attention when HR speaks.
    • Primary vehicle to get talent is ANY WAY. Truly a war for talent.
    • Attracting talent by money BUT companies are also becoming more sophisticated by using other methods such as brand, culture, stock, LTIPs, MBA training, career mapping etc.
    • Reward systems are performance based, but also company and team based.
    • Loyalty on both sides begins to be questioned.
Summary: Frenzied exuberance period of time. Salaries are rising 10-15% across the board annually and most people if they move to another company are getting 20-40% increases. This is creating the 1 year CV bubble. Companies were panicked and shocked into changing how they approach recruitment and staff turn-over. They started to fight back and not let the high-potentials just walk out the door. They started to apply a financial cost to back filling these employees who left them. Companies started to invest more into their staff and management development. While money is important, I believe employees today realize that other intangibles are also just as important. And companies are providing this “choice” to prospective employees.
 
  • 2008 and beyond – What Does the Future Hold?
    • Hire slowly fire quickly – companies will become even more adept at hiring and firing.
    • Hiring based on PASSION, personal values and cultural fit will be even more important. The track record and experiences will be a given.
    • Supply demand equation is still tilted towards the employee, but this will shift after a couple of years.
    • Companies will start to balk at 15-30% salary increases. This will stop in 2008 if they want to stay competitive.
    • HR will become more and more strategic for companies, and will be treated more and more as a business partner with executive leadership.
    • Managers will be taking a GREATER role in HR
    • Technology will play a bigger role within the human capital management arena
    • Strategic work force planning will become more important and implemented – even though it has already started in China.
    • Overseas placements will become more common
    • Attracting talent will become more sophisticated (use the iPod example, and AIG example, viral).
    • Rewards systems will become more transparent and more collectively based.
    • Loyalty is a two sided street. Both employee and employer will have to show more commitment and this cycle (I believe) has started.
Summary: A more balanced equation moving forward. Both parties have become more professional and sophisticated. Companies realize that they have to move beyond pure monetary based recruitment and retention…a bit of a revival in the sense of loyalty. Values are going to change.
 
II. Retaining Talent in China
 
This is one of the most common questions we get asked by our clients. Now that you have found us the “talent,” how do we now hold on to them beyond a year? A year???? Is this metric for success??
To be honest, I do not believe we have successfully placed someone until they have been with an organization for at least 3 years. It is not until then can we say that the candidate is fully integrated into the client side, and should be generating the results beyond the clients’ expectations. Our internal metric for a “successful placement” is 3 years plus!!
Some of my most successful placements have been with their firms for 8 years!
 
Before you start solving your turn over problems, here are a couple of questions for you:
  • Do you understand the root causes of your turnover? 
  • Do we strategically invest in finding out the real reasons for turnover, and do we adequately match the solutions to the problems? It is very common that the solution does not address the root cause. 
This all begs the question: What does talent really want? In the end, it really depends on the level of executive, but for this discussion we are focusing on middle upper and senior management.
 
This is what we have discovered:
 
  • “An employee never leaves the company, they leave his/her direct boss.” I think this speaks for itself. It is the most powerful aspect to recruit and retain your best employees.
  • Career Development – They must be able to see where they are moving within the organization. We often encourage clients to provide “career mapping” when they initially engage the candidate (for more information on this, please contact us).
  • Dynamic Leadership – This also relates to the first point above. The leadership must have passion with a vision.
  • Stability of an Organization
  • A clear value proposition of where the company is going
  • Rewards Strategy – Pyramid based.
  • Frenzied Environment – fast paced, with many new opportunities to learn
  • Lifestyle Management – meeting their lifestyle needs/choices.
  • A good cultural match between themselves and the company value systems. Do not underestimate this.
  • A good work environment – commonly dismissed.
  • Flexible work hours – do they believe this is valuable? Interestingly enough, studies have been done and it is evenly split by male/females on how often do employees desire flex-time? Each about 23%. Even slightly higher for the males. Must not be marketed just to mothers, parents or carers, across the board. Do a pilot run and see how it works.
  • Career breaks – sabbaticals – 8 years on, 4-6 months off.
  • Training, coaching and mentoring etc.
You may find this surprising but we encourage clients to “move beyond money.” Otherwise it will never end. The monetary aspect lays the foundation (and money is important, but not the only factor), but we feel that there are many more factors for retaining your executives.
 
Before you embark on this, let me ask you the following:
  • Evaluating employee’s personal value system. How well do you know your employees/staff? 
  • Should companies drill down and customize retention programs for each segment of their staff (high pots etc.)? What motivates a 27 year old may not motivate a 45 year old. Gen X vs. Gen Y discussion. Generational diversity.
  • Do companies conduct personal value systems research (outsourced) to better understand what each country/person/age will respond to when structuring a retention program? How do personal value systems differ from country to country from province to province in China and beyond?
  • Do you use internal focus groups?
  • Does your company measure retention costs?
I believe that companies should structure an al a carte benefits menu. Give examples.
Use PR to market the benefits…
 
III. Employer of Choice & Corporate Cultures
 
Your retention strategies (similar to the ones I have spoken about) will drive you to be a employer of choice and drive your corporate culture. There is undeniable linkage.
 
Here are some of the attributes of Employers of Choice that we have seen:
 
  • You have to be visible – yes, even B2B…marketing yourself not just to your clients but potential staff
  • Continuously re-recruit top staff
  • Promote from within, to the extent possible.
  • Avoid layoffs – if you must down-size, cut fat, not muscle
  • Over communicate with employees
  • If possible, accommodate the employees work-life balance
The employer of choice strategy is not some theoretical humanitarian agenda. It is about more than treating workers with respect and rewarding them for altruistic reasons. In the end happy employees are more PRODUCTIVE. The biggest pay-off is reduced turnover.
 
Turnover costs include: Separation costs, Vacancy costs, replacement costs, training costs, performance differential. Usually 30-35% of annual compensation package.
 
IV. Leadership Values and Loyalty
 
Does a charismatic leader influence your retention, loyalty and motivation levels? Yes.
 
Leaders need to impact the thinking, behavior and performance of their people.
 
We are often asked by our clients what attributes they should be looking for in hiring a senior executive in Asia Pacific. We recently convened our Annual Partners meeting in Mumbai India and put together our Top 5 ingredients to be a successful leader in Asia Pacific.
 
Here are the top 5:
 
  • Intellectual Grunt – Should be able to intellectually engage at all levels
  • Culturally Adept – Asia is a conglomerate of Nations, all distinctly different
  • Emotional Intelligence – Smarts will only get you so far if you do not have the personality to compliment and manage your emotions
  • Exploration – A passion to question and understand
  • Energy & Persistence – This is a trait that many people overlook
There are many challenges that companies face with regards to developing their high potential executives over the next decade. Here is a sampling of just a few of the key challenges we have discovered based on our experience:
 
·         Concise and effective communication…..in many different countries
·         Creative and innovative thinking….having some imagination to solve problems
·         Courage to take risks……making tough calls
·         Influencing skills….being able to push back and manage within a matrix environment
·         Executive Presence…being adept enough to network
·         Global Exposure….working globally, not just in Asia
 
For more information please contact Jeff Stryker at jstryker@ap.hunt-partners.com
 
 
 
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