Here’s a very good article posted by Joel Backaler, a blogger in Forbes, worth reading on how to keep your top talents in your company.
“If you’re not switching jobs every two years, then you’re doing something wrong.” I continue to hear Asia Pacific-based senior executives echo the same sentiment about the career mindset of young Chinese white-collar workers in China. When I worked as a consultant in Beijing, it was clear that my co-workers seemed to be on a constant rotation program among the top multinational management consulting firms operating in China. During my first weeks on the job, I reviewed training presentations blatantly taken from the China offices of McKinsey & Company, Boston Consulting Group and Accenture. My co-workers did not seem to mind using this information, because so many had spent significant time at these different firms that to them it was public knowledge and not viewed as proprietary information.
Once you identify, recruit, and train top local employees in China, how can you retain these individuals to ensure they do not leave to work for a competitor taking your company’s proprietary information for a minor pay increase?
There is no surefire solution for retaining talented local employees, but many innovative western multinational firms have developed strategies to keep their prized hires within the firm. Here are three strategies worth considering:
Be flexible about employee titles
In general, it’s not wise to give inflated titles to employees whose skills and responsibilities don’t match up. While the title may initially satisfy an employee, he or she is likely to eventually consider themselves underpaid for the rank and demand more compensation.
However, some companies have found a way around this dilemma by committing to a standard company-wide title and pay grade internally, while granting the employee a more appealing outward facing title on their business cards and in the marketplace.
As one Asia Pacific CEO at a leading technology firm put it, “if the regional sales manager for China and Taiwan wants his business card to read ‘Greater China Director of Business Development’ I am ok with it, if that’s what it takes for him to stay in the company and continue to hit his sales targets.”
Think long-term when it comes to incentives
Convincing your local talent to buy into the company vision and stick around over the long-term may prove challenging.
Nevertheless, you may be able to increase the likelihood your top employees will stay past the two-year mark by tying their incentives to aspirational purchases.
The ideal path for a top graduate on the white collar career track is to graduate, get married, and buy a house. In recent years, a second major purchase typically follows home ownership – a car. Understanding this phenomenon, one company set up an incentive scheme for top sales managers.
The company would provide an interest free loan to selected employees to buy cars and match a portion of the payments for 5 years. If the employee leaves the company before five years, they would lose the car and the company’s contribution.
For those who stick around, they receive a car at a significantly reduced price. This is somewhat similar to companies outside of China issuing stock option plans, in which employees’ options fully vest only after a set number of years working for the company.
Shatter the glass ceiling
The Asia Pacific CEO at most Western multinational companies is often a foreigner from headquarters. Typically, other key positions such as VP Strategy, VP Marketing, even down to middle-management posts are filled by expatriates. This is unsustainable for a business seeking to localize for the long-term. As soon as a key Chinese employee sees a glass ceiling looming above her head, she will opt to join other firms.
Interestingly, an increasing number of mid-level managers are choosing to leave Western MNCs for domestic firms. According to Frontier Strategy Group’s 2010 China Talent Engagement Survey, domestic Chinese firms empower their mid-level managers with greater responsibility than their counterparts at multinationals.
On average, the typical mid-level manager (age 31-35) at a Chinese firm oversees 13 direct reports, while those at Western MNCs on average only directly manage 9 employees. It is important for top talent to see a clear career path at your company, or else ambitious employees seeking career advancement with increased responsibility may leave for a competing local firm such as Mindray, Baosteel, Huawei Technologies or Haier where there is more potential for career advancement.