Employee retention in China

One of the main problems in the management of human resources in China is so-called “job hopping”, that is the tendency of Chinese employees to easily leave the companies to get better opportunities. According a survey released in September 2014 by the Chinese search engine Baidu, 96.15% of the respondents (Chinese people who were born during the 1990s) said they wanted to change their jobs.

At present, the foreign companies in China try to solve the problem of “job hopping” above all with economic incentives, underestimating other benefits related to the professional improvement and to the quality of life.

It’s true that the economical aspect has great relevance in China, also because the personal salary is not considered, like in the western countries, a private issue, but can easily become the subject of a conversation between friends and colleagues with unavoidable comparisons and consequences on the personal prestige; but, using only the economical incentives to favorite the retention of the employees can create a quantitative escalation of wages and could be a strategy that only have short-term results, always threatened by more attracting offers by other companies.

Then, it’s important to rely also on long-term incentive systems that invest in the human capital. First of all, the companies seeking to keep an high level of retention, should establish clearly communicate their training programs scheduling them in order to give this opportunity according the seniority in company.

In China traditionally the knowledge is associated to the power and the social mobility has been always linked to the level of education: for this reason, it could be a strong incentive for the employees to have the opportunity to attend an MBA or other study programs (especially abroad) that can benefit their careers.

In general, the companies that have training programs are more attractive for the candidates and have an higher score of personnel fidelity: in fact, the vocational training can be useful non only to transfer the skills but also to spread the corporate culture communicating to the employees the mission, the objectives and strategies.

It’s also important to stimulate the spirit of corporate membership through recreational activities and to promote a common corporate culture scheduling periodical meetings with the participation of all the employees.

Another effective strategy against the “job hopping” is to settle preferential career path for the employees that have a longer seniority in the company: for example, the French company Oreal has in China, at present, a top-management composed entirely by people that have developed their career inside the company and this corporate policy has allowed Oreal to reduce the turn-over of employees to very low percentage.

Another success story is related to the Italian company Perfetti Van Melle that has provided with some benefits (educational courses for children of employees, medical insurance and vacation prize for their family) to reward corporate loyalty and this allowed to reduce the turn-over under 3%.

 Post Scriptum

I wish everyone Merry Christmas and Happy New Year