A couple of months ago, Knowledge @ Wharton China ran an article on how to retain talent in a fast-growing market like China that the doctor couldn’t resist skimming. It notes that protecting your workforce from competitors eager to recruit experienced staff is a challenge in fast-growing markets as well as stable markets (which makes sense, since a developing market is even more likely to need talent). It backed this up with a scary statistic – the financial services industry had employee turnover of 25% in Asia in 2005, and indications are that the turnover rate has been steadily growing since. It was even worse in sales and manufacturing where turnover rates of 40% are common!
According to the article, it takes more than a competitive salary to retain staff. This is obvious – anyone who wants talent is going to at least pay a competitive salary, and if they’re desperate enough, they’re going to be offering pay that is at least at the high end of market average. The article noted that pay does play a role, with predicted salary increases of 7.9% for administrative workers and 8.9% for senior management in China in 2007, as compared to a real average increase in the US of 1.4%, but insists that more pay isn’t enough on its own to retain talent.
One of the suggestions it makes, which was employed by Spansion China who’s turnover rate is half of what it is for the electronics industry as a whole, is to not only identify your employees as your core assets, but to take actions that demonstrate you mean it. Spansion accomplishes this by holding regular meetings, discussions, and gatherings where employees are encouraged to give their feedback, positive or negative.
Another suggestion is that you should, to borrow a western phrase, empower your people – and mean it. When Vanke groups hires someone for a job, the new hire is given what he or she needs to do the job and is free to make his or her own decision on what’s best for the company – and then act on that decision. Plus, it gives its employees a clear career path and free training programs. Those employees who work hard have lots of opportunity for advancement within the company.
The article also noted that, in the best companies, employees tend to have a clear understanding of organizational goals, that in the best companies, there are aggressive goals at all levels of the organization and that the best companies reward employees appropriately.
In other words, there was nothing fundamentally new in the article, but they were all points that deserve repeating.