Plugging the holes

Editor's Note: Shanghai is striving to establish itself as a global financial center on par with New York and London. But there is one major hurdle: talent shortage. The city needs to have a pool of highly skilled professionals to realize its dream of becoming an international financial center and sophisticated service economy. Lan Gang, a board director at Manpower China, a leading employment services firm, talked to China Business Weekly's reporter Wang Zhenghua on what businesses can do to cope with the supply and demand imbalance in the skilled labor market.

Q: Which sector in the service industry has seen the harshest shortage for talented people?

A: The financial industry, in particular, suffers from an acute shortage of quality professionals. Foreign banks embarking on a rapid expansion of networks across China, are poaching the management from each other and there is a rapidly rising turnover rate in the industry. At some foreign banks, the annual staff turnover rate exceeds a stunning 30 percent. Domestic banks, many of which have gone public, also have a higher demand for quality individuals. Furthermore, the booming Chinese stock market has resulted in intense competition for fund managers, stock analysts and product designers.

We foresee an intense challenge for employers to retain their best employees in the coming five to ten years. Companies need to pay increasing attention to this situation.

Q: What suggestions do you have for retaining the most talented employees and what can companies do to enhance their loyalty?

A: It's important to make your salary competitive with the market, especially when January's CPI jump exceeded 7 percent already in China. But it's not enough. In addition to competitive salaries, companies should establish an effective system to help its employees improve themselves via continuous learning. As part of Chinese culture that emphasizes learning and education, Chinese employees show great fervor in digging into their jobs and hope they can receive continuous knowledge and skills for their positions. So some companies initiate rotational programs for their workers in order for them to learn from different assignments. Others put their employees in programs that go beyond their usual responsibilities. For instance, some companies grant their employees opportunities to participate in programs that feature teamwork with colleagues in other departments or overseas co-workers. But an increased training budget is not enough. The key is to establish a system to let your employees improve themselves out of their own wish to learn.

Also, in China employees always attach great importance to leaders' views of them. According to our survey, about 75 percent employees that move from one job to another polled say they would have considered staying at their original companies if their immediate bosses were changed. Sometimes relations with immediate bosses come before a competitive salary and proper corporate culture. Therefore companies in China should pay special attention to choosing quality middle-level managers who adhere to the corporate values that the company advocates.

Another aspect that companies should pay attention to is creating a structure and corporate culture that conforms to Chinese customs. With the rapid changes in the commercial environment, the legal system and industry structure in modern China, an organizational structure with a flat management model and clear responsibility descriptions will help the company be more sensitive to the changes. It will also make it easier for leaders to impart their knowledge to staff members. The fewer ranks are there in the company, the less difficult it will be for leaders to contact frontline workers. Chinese enterprises are also frustrated with a shortage of talented people who can help their companies to develop globally.

Q: Can you share an established practice by a successful business that attracts and retains talented people?

A: A successful company always takes a broad and long-term view. It also comes up with solutions before things get out of hand. In the banking industry, for instance, although China's banking sector fully opened recently, a leading international commercial bank began training local bankers in the country 16 years ago, when foreign lenders were actually only allowed to open small branches and didn't have many transactions. The bank also enlisted the most talented college graduates and sent them to its braches in other parts of the world to receive training and work with people with multi-cultural backgrounds. After two to three years, the bank sent the trainees back and assigned them jobs at home.

Now, these high-quality members have become the core team at the bank, which benefits it a lot today as it embarks on its wide expansion in China. It doesn't need to poach from the market at a very high cost, as many of its peers are doing now. It only needs the people from outside to fill complementary positions as the bank already has the experienced staff workers as backbones. Such a group of managers tend to have a higher loyalty to the company, better work ability portfolios and fit in better with the company's culture. Experience tells us that if we share an important growing-up period with a good company we always have a higher loyalty to it. That is a very important intangible asset of any firm. We not only feel the bond as it goes between employer and employees, we are more linked to the company by emotional ties.

(China Daily 04/07/2008 page3)