Global investments and talent have gravitated towards Hong Kong and Greater China since it began its integration efforts with the global economy, and the red dragon has since ascended rapidly as a world economic power.
However, research by Manpower Group, posits that we are now in “the human age” whereby companies can no longer rely on money to grow; they must rely on the quality of their talent.
As China continues to grow, the demand for qualified talent - and the competition from other companies to entice them - will undoubtedly increase. Local and global companies will need to assess their talent management strategies to ensure that they are exploring all sources of talent, and have programmes in place to ensure that they don’t lose existing talent. More than this, though, it is becoming increasingly important for human capital strategies to be contextualised within the dynamic Chinese business environment in order to succeed.
Many companies have recognised the growth potential in Asia since it is a huge continent with more than 3 billion people experiencing steady and strong growth, with China being among the brightest stars.
Two main challenges for employers in China, however, are talent retention and sourcing talent. Highly sought after talents are more independent than ever before, and are willing to transfer to other companies if better opportunities arise. China is the world’s largest automobile market and so naturally, a heated market will breed fierce competition for talent. Sourcing the best and most experienced talent is certainly a priority, but talent retention is also extremely important.
One possible HR strategy is to offer competitive salary packages with the view that profit cannot be squeezed from pay, but relies heavily on employees’ efficiency and proficiency.
One form of encouragement is to give employees higher salaries for them to work better and to ask employees to work better for a higher salary; an encouragement that will generate more revenue. This strategy combines the interests of both the staff and the company.
Multinational companies that are turning to China are all facing similar challenges - strong competition from local companies, rising labour costs and a talent war. However, some are more successful than others. What are the differentiating factors?
Obviously, a sound business plan is a pre-requisite but there is a crucial need for a strong local leadership team. One of the ways to do this is to launch a leadership model which includes cultural considerations as a key parameter. In doing so, companies can potentially boost sales growth, improve employee satisfaction levels and increase talent retention rates.
An effective leadership strategy should cover clear and pragmatic leadership profiling, sourcing, integration and development planning.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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