• About
  • Archive
  • Contact
  • Home 1
  • Submit a Story
  • Submit a Story
  • USCBC Podcasts
China Business Review
  • Operations
    Managing Risk in the “New Era”

    Managing Risk in the “New Era”

    Design Patents vs. Trade Dress: Protecting IP in China

    Design Patents vs. Trade Dress: Protecting IP in China

    As China Emerges from COVID-19, US Companies Invest to Compete

    As China Emerges from COVID-19, US Companies Invest to Compete

    Inside the Mad Rush for Masks – Anatomy of a 10 Million Mask Order

    Inside the Mad Rush for Masks – Anatomy of a 10 Million Mask Order

    Addressing Risk in the Era of US-China “Great Power” Competition

    Addressing Risk in the Era of US-China “Great Power” Competition

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

  • Politics
    Hong Kong’s National Security Law, Five Months In

    Hong Kong’s National Security Law, Five Months In

    China Implements its Long-Awaited Unreliable Entities List Mechanism

    China Implements its Long-Awaited Unreliable Entities List Mechanism

    Competing WTO Reform Agendas and the Contest for the Next Director-General

    Competing WTO Reform Agendas and the Contest for the Next Director-General

    China Eyes Further Northeast Asian Economic Integration in RCEP

    China Eyes Further Northeast Asian Economic Integration in RCEP

    COVID-19 Could Doom or Deliver US-China Commercial Relations

    COVID-19 Could Doom or Deliver US-China Commercial Relations

    A Game of Chicken

    A Game of Chicken

  • Tech
    Export Controls on Emerging and Foundational Technologies: A Null Set?

    Export Controls on Emerging and Foundational Technologies: A Null Set?

    How Companies Are Reacting to China’s New Data Security Scheme

    How Companies Are Reacting to China’s New Data Security Scheme

    China’s Participation in International Standards Setting: Benefits and Concerns for US Industry

    China’s Participation in International Standards Setting: Benefits and Concerns for US Industry

    The Hidden Challenges of China’s Booming Medical AI Market

    The Brave New Business Models Making Waves in China’s Ecommerce Market

    Defining “Emerging Technologies”: Industry Weighs In on Potential New Export Controls

    Defining “Emerging Technologies”: Industry Weighs In on Potential New Export Controls

    Trending Tags

    • Intellectual Property
    • innovation
    • cybersecurity
    • ecommerce
    • tech
  • Society
    COVID-19 Could Doom or Deliver US-China Commercial Relations

    COVID-19 Could Doom or Deliver US-China Commercial Relations

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

    Open Government Developments in China: Implications for US Businesses

    The Hidden Challenges of China’s Booming Medical AI Market

    The Handshake that Changed the World

    President Carter and Vice Premier Deng at the Performance of American Arts

    January 29, 1979 Performance of American Arts for Deng Xiaoping

  • Media

    Gallery: Craig Allen’s Trip to China

    USCBC 45th Annual Membership Meeting

    USCBC 45th Anniversary DC Open House

    USCBC President’s China Visit

    USCBC Hosts Business Roundtable with Zhejiang Party Secretary Che Jun

    USCBC hosts Comprehensive Economic Dialogue (CED) Luncheon

  • Podcasts
No Result
View All Result
  • Operations
    Managing Risk in the “New Era”

    Managing Risk in the “New Era”

    Design Patents vs. Trade Dress: Protecting IP in China

    Design Patents vs. Trade Dress: Protecting IP in China

    As China Emerges from COVID-19, US Companies Invest to Compete

    As China Emerges from COVID-19, US Companies Invest to Compete

    Inside the Mad Rush for Masks – Anatomy of a 10 Million Mask Order

    Inside the Mad Rush for Masks – Anatomy of a 10 Million Mask Order

    Addressing Risk in the Era of US-China “Great Power” Competition

    Addressing Risk in the Era of US-China “Great Power” Competition

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

  • Politics
    Hong Kong’s National Security Law, Five Months In

    Hong Kong’s National Security Law, Five Months In

    China Implements its Long-Awaited Unreliable Entities List Mechanism

    China Implements its Long-Awaited Unreliable Entities List Mechanism

    Competing WTO Reform Agendas and the Contest for the Next Director-General

    Competing WTO Reform Agendas and the Contest for the Next Director-General

    China Eyes Further Northeast Asian Economic Integration in RCEP

    China Eyes Further Northeast Asian Economic Integration in RCEP

    COVID-19 Could Doom or Deliver US-China Commercial Relations

    COVID-19 Could Doom or Deliver US-China Commercial Relations

    A Game of Chicken

    A Game of Chicken

  • Tech
    Export Controls on Emerging and Foundational Technologies: A Null Set?

    Export Controls on Emerging and Foundational Technologies: A Null Set?

    How Companies Are Reacting to China’s New Data Security Scheme

    How Companies Are Reacting to China’s New Data Security Scheme

    China’s Participation in International Standards Setting: Benefits and Concerns for US Industry

    China’s Participation in International Standards Setting: Benefits and Concerns for US Industry

    The Hidden Challenges of China’s Booming Medical AI Market

    The Brave New Business Models Making Waves in China’s Ecommerce Market

    Defining “Emerging Technologies”: Industry Weighs In on Potential New Export Controls

    Defining “Emerging Technologies”: Industry Weighs In on Potential New Export Controls

    Trending Tags

    • Intellectual Property
    • innovation
    • cybersecurity
    • ecommerce
    • tech
  • Society
    COVID-19 Could Doom or Deliver US-China Commercial Relations

    COVID-19 Could Doom or Deliver US-China Commercial Relations

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

    The Year in Social Credit: Where is Corporate Social Credit Going in 2020 and Beyond?

    Open Government Developments in China: Implications for US Businesses

    The Hidden Challenges of China’s Booming Medical AI Market

    The Handshake that Changed the World

    President Carter and Vice Premier Deng at the Performance of American Arts

    January 29, 1979 Performance of American Arts for Deng Xiaoping

  • Media

    Gallery: Craig Allen’s Trip to China

    USCBC 45th Annual Membership Meeting

    USCBC 45th Anniversary DC Open House

    USCBC President’s China Visit

    USCBC Hosts Business Roundtable with Zhejiang Party Secretary Che Jun

    USCBC hosts Comprehensive Economic Dialogue (CED) Luncheon

  • Podcasts
No Result
View All Result
China Business Review
No Result
View All Result
Home HR & Staffing

New Talent Outlook

Christina Nelson by Christina Nelson
April 1, 2011
Share on FacebookShare on TwitterLinkedin

A recent survey of mid- to senior-level managers in China shows they have rising ambitions—and a desire to balance work with home life.

By Christine Raynaud and Chris Watkins

Is there still a talent war in China? A recent MRI China Group survey shows that the talent war is as strong as ever as Chinese professionals strive for more responsibility and money. The survey results also reveal that a subtle shift toward more work-life balance (in which employees attempt to balance their work and personal lives in the face of China’s typically long hours for managers) is emerging. The shift is taking place as mid- and senior-level talent in multinational corporations and fast-growth Chinese companies begin to reevaluate their options in China’s rapidly expanding economy.

Many US companies list talent recruitment and retention as one of their top concerns in China (see the CBR, November-December 2010, US Companies Report Views of China Business Environment). As companies expand further into China, human resources trends will become either a nightmare or an opportunity, depending on the company’s ability to manage talent.

Key survey findings

The latest annual MRI China Group Talent Environment Index was conducted in China and the Asia Pacific region—including Hong Kong, Singapore, and Taiwan—during the fourth quarter of 2010. MRI surveyed mid- to senior-level management across a range of businesses, industries, and locations. Of the more than 3,200 respondents, over 2,200 were based in mainland China. More than 90 percent of the respondents held full-time positions, had bachelor’s or master’s degrees, and worked in publicly listed, local, regional, or multinational companies.

A volatile talent environment—with no promise of recess

As China and the world emerged from financial and economic crisis in 2010, companies actively courted Chinese talent—and the talent responded. The MRI survey results show 64 percent of respondents received a job offer from another company in the previous 18 months (see Figure 1). Of this group, 73 percent received two or more offers, and 32 percent accepted counter-offers from existing employers. Of those who received counter-offers, 71 percent had already left their company or were already looking for an opportunity within two years of accepting a counter-offer.

Though the desire for more responsibility was a major motivation for employees to leave or stay at a job, the desire for higher wages also played a role: 73 percent of those who accepted offers with new companies received a 20 percent or more increase in compensation. Forty-three percent of those who accepted offers from new companies indicated they received more than a 30 percent increase in total compensation when moving to a new employer.

Whether perception or reality, 68 percent of respondents indicated that they did not see themselves in the top 30 percent of the market in terms of compensation. Roughly half (55 percent) of respondents indicated that they were unhappy with their current compensation.

Looking at the future, 77 percent of respondents stated they believe they will have better opportunities to change jobs in 2011. Most respondents (85 percent) were either actively looking for a new opportunity or said they would be open to a new opportunity if it presented itself. Only 12 percent of respondents indicated they did not intend to switch jobs in 2011.

The results suggest employees’ beliefs that they are underpaid combined with great prospects for career changes in 2011 make for a potentially lethal combination for employers in China. Employees know they can test the market to confirm their value with other employers, which creates the potential for higher turnover of top performers.

A mobile workforce—but not necessarily in the right direction

Since 2007, the economies of many cities in China’s interior have been rising faster than those on the coast. The economic expansion of inland Chinese cities should accelerate further in the coming years with an increased demand for top professional talent.

Ideally, companies moving westward should find and develop local talent. But as a first step, companies may need to attract management and professional talent from their coastal-based operations to transfer best practices and support their expansion.

The MRI survey indicates that employees have a strong appetite for mobility into and out of China, but less so within China.

  • About three-quarters (70 percent) of respondents outside China indicated they were mobile and listed mainland China as their first destination choice for employment.
  • Nearly half (45 percent) of respondents in China indicated they were interested in relocating to a job outside China, with Singapore, Hong Kong, and Australia being the most sought after locations.
  • Respondents in China, primarily those living in coastal areas, still picked coastal cities as their location of choice for employment.

The survey results did not indicate that China’s “Go West” initiatives or cost of living increases in Tier 1 cities greatly influenced people’s desire to relocate. In fact, respondents did not cite location as a key motivation to move. This may imply that people will move outside of coastal areas with the right incentives, but it may also imply that incentives, including greater responsibility and compensation, must be high to encourage movement. Because managers may not be motivated to move to lower-tier cities, despite significant media coverage and investment in the “Go West” initiatives, companies looking to expand inland should focus on attracting and retaining local talent.

raynaud chart 1

A demanding talent pool

The MRI survey asked respondents to share their top motivators when looking for a career change. As their top motivator, 34 percent of respondents indicated the desire for increased responsibility, 20 percent indicated the desire for higher compensation, and 13 percent indicated a desire for more work-life balance (see Figure 2).

Significantly, these findings reveal a shift in generally accepted ideas about motivations of talent in China, as well as a potential conflict in motivations. In recent years, talent in China was primarily attracted to compensation increases, but the MRI survey shows two significant additional motivators.

One possible reason that work-life balance is ranking higher could be the rapid increase in compensation for mid- to senior-level talent in China over the past five years, which may put people in a more comfortable position to take a broader, more holistic approach in their career choices. Those born between 1975 and 1987 make up a significant portion of this highly sought-after talent pool and have reached a stage in life when many are getting married, buying a house, and having a child during a critical phase of their professional career. As the competitive intensity and pace that characterizes business in China has created a highly stressful environment for this generation of professionals, it is understandable that they would want to slow down. Conflicts may occur, however, when professionals want more responsibilities, promotions, and pay at work, but also request better work-life balance. Many professionals may not yet realize that their motivators conflict with each other.

Employees’ desire for increasing responsibilities and for work-life balance could create a significant problem for companies that seek to attract and retain top talent. China’s development pace and companies’ high year-on-year growth combine to produce long work hours for senior management. In addition, the high matrix structures (multiple reporting lines internationally, regionally, and locally) of companies require China-based mid- to senior-level talent to be engaged in late night and early morning calls to corporate offices in the United States and Europe. If a manager is no longer willing to work the long hours required of a job, a conflict could occur.

raynaud chart 2

Recommendations for businesses and talent managers

Many companies are experiencing double-digit growth in their revenues and significant headcount and leadership needs in China. The supply of mid- to senior-level talent has not kept up with demand because of China’s rapid growth over the last decade. Companies must therefore re-assess their talent management and recruitment strategies and consider new approaches. In light of these latest survey results, approaches should factor in the added complexity of a maturing mid- to senior-level management profile that is looking for more work-life balance along with fast careers and money.

Even if companies recognize managers’ key motivators to leave, it will be difficult to retain talent in such a competitive environment. If companies place the talent agenda at the core of their China strategy, however, they may stand a better chance of successfully coping and transforming a talent problem into a strategic weapon to surpass their competition.
Retaining employees

Considering the insights gained from this survey, MRI recommends that to retain top talent companies should

1. Understand and listen to their workforce

Businesses should identify key internal talent as they are most vulnerable to outside proposals for higher responsibility and compensation. Each business unit or department may wish to perform a vulnerability assessment of their top employees, through an annual review process or some other method, to identify where there is the highest risk of losing talent. Companies can then reduce these risks by offering solutions, such as raises or opportunities to balance work with personal life.

2. Provide a career path for top talent

In MRI’s experience, people listen to outside proposals most when they cannot see their potential evolution—or triggers for such evolution—in their current company. Companies’ top executives should communicate their vision and expansion plans for the business, as well as career paths in their organization that will enable individuals to advance while enhancing company success.

Though it is good news that talent in China does not leave a job for more money alone—but also for more responsibility—it means key talent may leave within a year of accepting a counter-offer if the promises made during the recruitment process, such as increased responsibility, are not fulfilled. Companies must implement a promotion policy framework to prevent the attrition of key talent. Knowing that staff may receive 20-30 percent salary increases externally is painful, but this knowledge provides a benchmark for how aggressive the company should be when considering compensation for critical staff. Effective counter-offers should be sincere rather than reactive to a situation.

3. Over-invest in development and mentoring

Western organizations are often surprised at the speed by which young talent are promoted in China. In some ways, promoting quickly is a self-inflicted challenge: A talent shortage drives higher risk-taking and more offers to young employees who are not necessarily ready for more responsibilities. But ready or not, when offered the job, employees often seize the opportunity. Organizations should over-invest in developing and mentoring their talent in China to enable them to climb the career ladder at a faster rate than the firm would normally consider. Employees will then be able to handle the greater challenges when they are promoted.

4. Use Tier 2 and Tier 3 city expansion plans to retain talent

Employees with high potential respond well to increased responsibility and autonomy. Companies might implement an internal development plan for key staff that includes assignments with higher responsibility in less desirable locations on a project or fixed-term basis. This approach will help retain key talent in the organization, while giving employees a chance to thrive in a visible role, earn more money, and grow in a high-impact assignment.

5. Be more aware of work-life balance

Like all challenges, striving to achieve a work-life balance may be turned into an opportunity. Companies should be aware of potential derailment in this area and develop initiatives after internal consultation. Since work-life balance is a relatively new concept in China, some business leaders may even want to build a strategy around it as a core company value, as part of the company culture, or as a staff benefit.

Attracting employees

To attract top talent externally, companies should

1. Put talent acquisition at the heart of their business structure

To better attract talent, companies may wish to assign a talent acquisition leader with a strong line to the firm’s China-based president, CEO, or managing director. Many companies have moved this reporting line two or three levels down from the head of the corporate structure. By doing so, talent acquisition becomes a cost-saving exercise instead of a strategic driver of the business. Nearly every executive in China identifies failure to attract top candidates to their company as a major obstacle to meeting the company’s business goals. As its own department with the full sponsorship of the China head, talent acquisition has a better chance of receiving the necessary resources and attention needed to be effective.

2. Develop an attractive employer value proposition

To enhance the effectiveness and the return on investment of hiring in a competitive market, companies should clarify what they promise employees. With career development and work-life balance holding such a strong position in the minds of staff, companies should accurately communicate the job’s benefits and company culture to recruits. The firm’s should also choose recruiters that are able to convey the firm’s promise and employment brand to the market in a positive way.

3. Be proactive

To prevent “crisis hiring,” companies must take a proactive approach to talent acquisition. Through talent mapping and a thoughtful candidate engagement strategy, companies can increase their chances of attracting “passive” candidates—meaning those who are not actively looking for new opportunities. Talent mapping involves a comprehensive assessment of the talent pool—examining the total number of potential candidates, compensation averages, and openness to opportunities—within a given function, such as sales or marketing. Engagement strategies include any method companies may use to reach and hire potential candidates, including online engagement, direct engagement through headhunters or internal staff, the interview process, and post interview communication. Passive candidates will, by definition, be at a lower risk of receiving multiple offers during the recruitment process and thereby allow the company to attract them without having to compete with multiple other firms at the same time.

4. Be decisive

The length of the hiring process in China is a critical component of a company’s success rate in attracting top talent. As noted previously, the MRI survey indicated that 73 percent of respondents had received more than one offer in the last 18 months. These multiple offers are often received around the same time because of most companies’ slow interview and offer processes. The long timeline gives candidates the opportunity to interview with multiple companies, compare offers to determine their “market value,” and play companies off each other. Much of this could be avoided if the selection process could be streamlined and kept within 30 days.

5. Be aware of the compensation challenge

As mid- to senior-level talent in China demand international compensation standards, companies must be competitive to attract the best people to their business. As derailing an internal compensation system to attract new talent is not an easy option, companies must juggle and adapt to outside talent demands, while seeking damage control within their organization as salary bands are stretched.

As the talent war shifts, so must companies

In an overheated talent market, 2011 holds significant challenges as companies come to grips with the rising and shifting ambitions of talent in China. More than anywhere else in the world, talent should be on the agenda of all business leaders in China, as business success will be achieved through the retention and rise of a highly capable but demanding pool of professionals and executives. As always—this is a problem to solve and an opportunity for the best employers.

Christine Raynaud ([email protected]) is CEO of the MRI China Group; she is based in Hong Kong. Chris Watkins ([email protected]) is country manager, China, MRI China Group; he is based in Beijing.

Tags: Professional DevelopmentRecruitment and Retention
Christina Nelson

Christina Nelson

Next Post

Understanding Chinese Consumers

Recommended.

How Biden’s Economic Team Views China Trade Policy

January 14, 2021

Hong Kong’s National Security Law, Five Months In

November 25, 2020

China Implements its Long-Awaited Unreliable Entities List Mechanism

October 7, 2020

Competing WTO Reform Agendas and the Contest for the Next Director-General

September 22, 2020

Latest Podcasts.

New MOFCOM rules on extraterritorial application of foreign laws

January 12, 2021

The EU-China agreement and a look at other market liberalizations

January 6, 2021

Is the BRI debt trap diplomacy? And how can the US compete with it?

December 18, 2020

A broad recovery in China means shipping challenges for some companies

December 15, 2020
China Business Review

China Business Review is the official magazine of the US-China Business Council, a nonprofit and nonpartisan trade association that represents more than 200 American companies doing business in China.

  • How to contribute to China Business Review

Categories

  • Bilateral Relations
  • Business Etiquette
  • CBR Spotlight
  • China Deals
  • Corruption
  • Cybersecurity
  • Ecommerce
  • Environment
  • Finance
  • Galleries
  • Getting Started
  • HR & Staffing
  • Infographics
  • Innovation
  • Intellectual Property
  • Management
  • Media
  • Operations
  • Opinion
  • Policy & Regulations
  • Politics
  • PR & Marketing
  • Rural Issues
  • Safety
  • Social Policy
  • Society
  • Standards + Licensing
  • Sustainability
  • Tax
  • Tech
  • Top Story
  • Trade
  • Uncategorized
  • US-China Business Council
  • Videos

Tags

Agreements Agriculture Alibaba Best Practices Business Environment China China's Investments Abroad China Market Intelligence Chinese Consumers Chinese Investment Commentary Consumer Trends E-Commerce Economic Trends Energy Environment Events Food Foreign Investment Going Global Healthcare Reform Human Resources Infrastructure Internet Interview Investment Investments into China IPO Joint Venture Labor Legal Analysis M&A Manufacturing Media National People's Congress Q&A Strategic and Economic Dialogue Supply Chains Technology Trade Transparency US-China Relations USCBC US Exports to China Xi Jinping

Join our Mailing List

Sign up for the US-China Business Council's newsletters to stay ahead of the game with roundups, analysis, and commentary.

Sign Up

Follow Us

  • About
  • Archive
  • Contact
  • Home 1
  • Submit a Story
  • Submit a Story
  • USCBC Podcasts

© 2020 China Business Review

No Result
View All Result
  • Operations
  • Politics
  • Tech
  • Society
  • Media
  • Podcasts

© 2020 China Business Review