ChapmanCG’s latest series of HR roundtables took us to Shanghai where we were hosted by Ferrero, GSK, EMC and American Express. There were lively discussions on the talent life-cycle in all four meetings, and some interesting synergies became clear across all industries. Of particular interest was the link between Talent Acquisition and retention, and the general consensus was that retention and preventing attrition can and should start during the attraction and subsequent ‘courtship’ process.

There are five main areas organisations should reflect on when considering this link between Talent Acquisition and retention, a brief overview of which follows.

1.) Culture

The organisational culture must be a good fit. For example, it doesn’t matter how good a sales person was in one company if he or she can’t operate effectively in a different organisational cultural context. The bottom line is that employees must buy into the working environment in order to be successful. Every organisation has a cultural reputation in the market, and it’s important to be honest about the reality of this during the ‘courtship’ phase. There is little point in communicating one type of corporate culture and value set if the reality in China is very different. It’s also important for search partners to understand this and present the true picture to the market. If this isn’t handled correctly the company is likely to see high attrition in the first 12 months. Having an aspirational Employee Value Proposition and employer brand is ok, but the current state of the culture must be authenticated during an honest and open recruitment process.

2.) Scope and the ‘Right’ People

In China, we often see people change companies based on factors such as increased management responsibility, number of countries under their scope and/or the size of the headcount under their leadership. These may make the scope appear larger and more exciting, but ultimately these additional responsibilities will not necessarily create a successful fit. This really shouldn’t be the main focus, as factors such as the ability to make a positive impact and form relationships are often more important. It is therefore critical at the start to be honest about the day-to-day, what it looks like, how people get things done, what are the positives - and the challenges. Hiring the ‘right’ person for the right role is clearly key, but it is also important to hire the right person for a particular organisation. As one HR Director put it, “We don’t need the best talent, we need the right talent.” More organisations are being increasingly careful when it comes to hiring talent that fits not only their culture, but also their organisational capability.

Rather than simply trying to hire ‘the best talent’ it’s important for organisations to be asking key questions such as ‘Who are we?’, ‘Where are we now?’, ‘Where do we want to be?’ and ‘What is the talent base we need to get there?’ Hiring based on organisational values and setting some clear competencies that are linked to those values is more likely to create a successful match.

3.) Hiring Managers

Whether we like it or not, hiring managers have reputations. They can create sub-cultures that are completely contrary to the organisational culture, and this can be a real barrier both during the interview process and also in terms of retention. We can hire people who fit into our culture, but ultimately we need to establish whether they are going to work well within the sub-culture of the team they are joining, and whether they are really getting an honest view of what this will be like during the interview process. Leadership needs to ‘walk the talk’, as they are the key culture carriers. As one TA Director at a tech firm mentioned, top talent in a function like sales may be top performers in one environment, but they may move and become stifled by their hiring manager or the new structure and culture. “How many times have we heard people say: the people around me make my job harder and I’m fed up. I just want to be set up for success.” On the flip side, if the team and manager are a great fit, the likelihood of retention is increased, so involving all the key decision makers in the process and being honest, transparent and authentic at the start is key.

4.) Career Aspirations and Development

Best practice Talent Acquisition requires regular catch-ups with the candidates as they move through the process. During these interactions, the recruiter will get to know the candidate, and they’ll also have a better understanding of his or her motivational drivers. It’s then important that this information is shared with the HRBPs and L&D professionals to ensure that they design the right career development and retention programmes. As one TA Director said, “It’s about understanding key employees’ wants and desires carefully at the hiring stage, and then following through by managing proactively throughout their career.”

Career development is more about understanding the human side. One HR Director shared, “Coaching is key, as is having regular catch-ups, but this should be balanced with the need to maintain a high performance culture. It’s also about connectivity - connecting the pieces for employees and outlining the journey, highlighting where people can get to. They need to know where they are going. This level of clarity on the employee journey and career development opportunities can also be positioned in the market to help attract people. It can be a point of differentiation.”

5.) Compensation

Compensation in a market like China is still a key differentiator. We have heard many candidates in China say, “I love my job but I’m leaving anyway.” This can be down to brand, scope and/or culture, but ultimately compensation also comes into it, especially in China where local Chinese companies are able to pay above market value. It is a well-known fact that it’s more expensive to hire external replacement talent than to keep the talent you have, and in a market like China it’s not uncommon to see someone secure an increase of between 30-50% in the external market. Internally, however, when top talent is promoted, they won’t receive this sort of incremental increase. Do we therefore need to start looking at the ‘norm’ for internal promotion?. Retention may cost more than you might like at the time, but it is more cost-effective in the long run. One HR Director stated, “Be proactive with retention, promote on the front foot and show people you value them.” In addition these high calibre hires coming in on 30-50% more than their previous package have the potential to become high maintenance and more difficult to retain, as they may always be chasing the best remuneration.

There are signs that things are starting to shift in China. Gen Y talent coming through will look beyond compensation, so engagement levels, cultural fit and also mobility may have some influence when determining whether someone will stay or go. These are things that can be explored, communicated and registered during the hiring process. When done well, good selection is good retention.

Here's What People are Saying:

“Thanks to ChapmanCG for arranging the roundtable. It’s always valuable to share ideas and best practice with industry peers, and interesting to know that many of the key issues we face are ubiquitous.” - Ryan Owen, Nike

“Extremely insightful discussion and high energy exchange of information on current trends and industry intelligence. Thank you ChapmanCG for organising this meaningful event and creating a healthy HR community learning platform.” - Annie Lim, Sanofi

"The topic of retention strategy itself is one of the key challenges facing business and HR leaders. It’s a terrific idea to integrate Talent Acquisition’s view and talent market intelligence into the company’s retention strategy development and execution. The discussion is a great starting point for bringing the idea to the real business world.” - Gary Qin, SAP

"The ChapmanCG sessions are always informative and energy packed with multiple interesting topics discussed. Key takeaways for me were to hear the comeback stories by some organisations and the proactive planning on Talent by others. I think this was by far the most active session that I have attended." - Kiran Ragiredd, IBM