China Business

How To Retain Your Star China Employees

China employee retention tactics

Anyone with a business in China knows how difficult it is to retain high level Chinese employees. Rapidly rising salaries obviously factor into this difficulty, but according to Andrew Hupert at ChinaSolved, a China retention policy must consist of more than “just dumping cash, bonuses and big commission payouts on star employees.”

In his post, China Key-Person Retention Planning now a Strategic Battle, [link no longer exists] Hupert sets out what he calls “3 arrows in the quiver of China Key Man Retention strategy”:

1) High-end health care plans. Hupert calls for a family plan so that the spouse of your key employees “will get used to the convenience and prestige in a hurry — and thus become your advocate in the household.”

2) Pension plans that vest over 3-5 years. “There are many ways to structure a company retirement or long-term savings plan, but the key is vesting.” Set up  your China company retirement plan so the longer your employee stays, the more portability he or she will have. Do not make the vesting period so long as to be unattractive to your employees or potential employees, but do not make it so short that you are doing little to stop the revolving door.

3) Company ownership and profit sharing. Hupert sees this as the “least valuable” of the three because if your company’s growth slows or reverses, it will not serve as much of an incentive to stay. It is nonetheless “a great idea for building long-term loyalty and motivation, but you will find it doesn’t help you much when you need help the most.”

All great advice.

Any other ideas?

5 responses to “How To Retain Your Star China Employees”

  1. Company ownership and profit sharing is still workable during start-up or pre-IPO phase of new ventures. It seldoms becomes effective when the venture reaches its saturation point. Pensions plan and high-end health care plans work well for mega ventures with sustainable market share. They can be attractive for talents who are professionals (accountants and in-house lawyers…look for stability in career development) However, they are basic but not a must to other talents in the fields of marketing or financial investment who are less risk averse and more entrepreneurial.

  2. What is missing is basic, obvious and sadly missing in so many organizations.
    Build up good relations with your employees, share lunch with them, show them respect, be flexible when family emergencies show up. Make work fun if possible. Strategize career futures with them. Don’t transfer successful managers out of the operation unless absolutely necessary (loyalty is more often to the person than the organization).
    As a search consultant, I am always talking to employees about why they are considering other options and the working environment and work/family balance comes up big in their considerations. Yes money is important, yes a new fancy title is tantalizing to the ego, but without basic relationships/connection all else is for naught.
    It is amazing how many overseas Chinese, expatriates and even internal Chinese transfers (from Shanghai or elsewhere) and returnees end up looking down on the local Chinese and end up grousing about all of China’s problems and how no one is honest, no one is capable/loyal whatever. While not expressed to the employees faces, those sentiments are sensed and resented.
    A “le guan” optimistic “sui he” easy going boss will more likely retain good staff than an anal retentive suspicion prone task manager. It is basic and sadly missing in so many.
    Unhappy employees resent being tied into long terms financial entrapments such as the ones outlined above, and make poor unmotivated employees.

  3. Most people don’t work solely for money. They want respect and feel being important in an organization. To retain your star Chinese employee should start with a thorough review of the company’s management and leadership skill. Most of the time, the employees leave the boss instead of the company. An abusive and abrasive boss cause prodigous damage to the company’s most valuble asset-human resource.
    In my point of view, the three “R”s, respect,remuneration and recognition should be the three pillars of a company’s talent retaining strategy.
    Without respect, people feel their work and existence are not appreciated. Then the connection between the employees and the company will be seriously debilitated.
    Remuneration is also extremely important. Especially in a developping country like China. Money is not only an important tool to lift the standard of living, but also a measurement of success.
    Recognition make employee see the future of their careers. When the employee feel their contribution is recognized by the company, they know the earn the credit to advance their careers. They will keep doing good things to win more recognitions. What else company can do is always to put an employees’s stellar performance under the spotlight, as a motivation to the star employee and also as the goad to inspire more other employees.

  4. Sounds like what people are talking about is not ‘how to keep your star employee’ but ‘how not to pick the wrong guy as your manager’ or ‘how not to be an a**e hole to your employees’.

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