China HR: Whose Problem is it?

A recent post on the China Solved Weblog, this post gives western managers advice on ways that would benefit the comapny and help to recruit and retain employees when they start out in China, and are looking for new talent.

The US HR manager visiting Shanghai from the Midwest was nearly foaming at the mouth. 35% of her company’s local team has quit in the last 6 months, and the average annual pay package has climbed 25% a year for the last 3 years. And now her local counterpart wants to increase the training budget and over higher bonuses this year to hold on to the staffers they still have. ‘Are these people crazy?’ the visiting HR manager asked. ‘What’s their problem?’

They don’t have a problem. You do.

That’s the piece of the puzzle that western HR and general managers sometimes miss. Their Chinese workers are doing fine. They have a pretty good understanding of the situation on the ground in China. By now they know that their chances for advancement are better across the street than in their own shop. US firms are famous for big pay packages when things are going well and for firing excess staff when things aren’t. There’s a shortage of workers and new offers are coming in all the time. Furthermore, their relative standard of living is the best in Chinese history. They are making 10X what their fathers did in many cases. They have nice homes, plenty of food, well stocked stores and little to fear from the government or thugs on the street. Remember – these are the kids who grew up hearing stories of shortages, deprivation and security fears. They are doing better than any Chinese generation in recent history (probably EVER), and they are acutely aware of it.

Manage (and promote) according to the potential and limitations of local workers. They aren’t going to show initiative or creativity, so you have to start structuring your teams differently and rewarding based on different performance. They like executing on specific instructions and working with transparent, discrete processes. Typical Chinese education is suited for technicians or applied engineering – not creative problem solving. You have to structure your organizations accordingly.

Don’t wait for them to ask for things. They won’t. The US sales manager can wait for performance or for their aggressive young shark to make demands. The China sales manager will watch his whole team quietly move off to another company if they think they are being ignored. You have to beat them to the punch with a raise, a bonus, an award, or some kind of recognition every 6 months or so. Western companies like to wait 2 years until they promote – in China you’ll need to break that up in to 3 or 4 intermediate moves.

Show them a way up. Chinese workers are bailing because they think their prospects are better somewhere else. You have to take control of the retention situation, and decide who you want to hold on to. Then start career coaching.

To view the entire article at its orignal location click on the title of this post.

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