Embracing New Challenges in China – HR in Action

In the last week of October, ChapmanCG co-hosted six HR Leader roundtable sessions in Shanghai and Beijing with American Express, EMC, Ferrero, GSK, Li-Ning and Mercer. Over one hundred HR leaders from different industries and organisations joined us including representatives from Alcatel-Lucent, Apple, Baxter, Bayer, Danone, Dell, Deloitte, Deutsche Bank, DHL, Dow Chemical, DuPont, Fonterra, GAP, Google, Hilton, HSBC, IBM, Jones Lang LaSalle, L’Oreal, Medtronic, Merck, Nestle, Nike, Pearson, Philips, PPG Industries, Roche, Samsung, Sanofi, SAP, Standard Chartered Bank, Thermo Fisher Scientific, Walt Disney, Zegna and many others. All groups engaged in interactive discussions around the new challenges and opportunities in today’s China, and the impact these are having on the whole talent life-cycle. While the many industries and organisations did have varying issues and priorities, there was a lot of commonality in the sessions. Below is an overview of our discussions, which includes some interesting takeaways.

Gone Are the Golden Days

While China remains a hotspot for many global organisations, the reality is that the growth rate is levelling off. The days when global headquarters could expect double-digit or even triple-digit growth in China are gone, and many companies are experiencing low growth or even a business downturn in the country. China is no longer a low-cost location, due to the inflation of the currency, as well as the salary levels, therefore many organisations are considering shifting key operations to new emerging markets like India or other ASEAN countries. On the other hand, local Chinese companies and start-ups are performing well against multinational companies (MNCs) in the talent war, as MNCs are no longer the default-preferred employers for young professionals. There was consensus in all meetings that the golden days have gone, and MNCs now need to shake things up to face these internal and external challenges, and deal with the impact these are having on Talent Acquisition and retention.

Impact on Talent Strategy

While facing these new challenges, organisations have had to come up with new strategies for different stages of the talent life-cycle. From the Talent Acquisition perspective, companies have transitioned from hiring ‘the best people’ to hiring ‘the right people’. Employer branding has become more critical as the new workforce start to look for jobs with a purpose. New competencies, such as resilience and courage, are needed as success in today’s Chinese economy is no longer a given, so organisations need people who will not give up at the first hurdle. Retaining key talent over the ‘economic winter’ and preparing them for the ‘spring’ has become a key focus in talent retention. One solution that some organisations have developed is to send employees on international assignments to keep them engaged. Others are looking into individual customised retention plans that truly understand and take into account employees’ priorities and concerns. Innovation is a key word for many organisations, but often companies don’t really understand what it means to manage/develop an innovative workforce, or how to create a risk-tolerant environment that fosters and encourages innovation. Identifying and developing the key strengths of the workforce and moving those capabilities up the value chain is also critical in responding to the eroding cost advantage of China.

Leveraging Data to Stay Ahead of the Game

In challenging times, organisations are moving toward the use of data to provide business insights and to facilitate more rational and data-driven decision-making. However, a lot of companies are not clear about how to ensure that the information they are collecting will give them the desired understanding. This goes back to basics, right down to the fundamentals of how to use data — determine what you would like to assess first; choose the right metrics based on that; collect the data; analyse the findings; and then assess the impact. Several HR Leaders shared frustrations of drowning in the deep water of data because they failed to get the first two steps right before they collected the information. Although there are various systems that help companies to consolidate data, such as Workday (one of the most popular in recent years), bearing the end result in mind when tailoring the modules is still critical to avoid the ‘garbage in, garbage out’ syndrome.

Interesting Initiatives Shared in the Sessions

Some interesting and creative initiatives were shared amongst the groups:

1. Two organisations launched talent programmes targeting mid-career women returning to the workforce after taking a break to have a child (or children). These female professionals usually have good experience but are looking for a better work life balance. By providing relatively flexible work hours, companies can actually attract working mothers with a lower salary, as compared to the standard market rate.
2. In order to increase the mobility of employees, a European FMCG company initiated a ‘dual career’ programme to help the spouses of their international assignees to find jobs in the destination country. The organisation had huge success in markets like the US and HK, but it is yet to establish similar platforms in China.
3. One example shared around the individualisEd retention strategy was to provide support and care for parents for key talent facing the issue of aging parents living in other cities. A small amount of investment delivered a huge ROI in terms of loyalty and retention, as the company was seen to truly understand and then meet the needs of key talent.

Many thanks go to our co-hosts for these successful events, and we look forward to calling these groups together again in 2016.

Here’s what people are saying:

“The session was interactive with good insights from different companies. I really enjoyed the opportunity to meet up with other senior HR professionals.” – Richard Liu, Goodyear

“It was a good use of time to step back from the day-to-day of our jobs, and to exchange stories and ideas about talent retention.” – Angeline Wong Tucker, Dell

“I really enjoyed the open discussion about the challenges we are facing and sharing of best practices and ideas. I liked the safe and comfortable environment ChapmanCG provided.” – Amy Dong, SAP

“I truly enjoyed the discussion – a lot of valuable thoughts from the group of senior HR leaders on talent market analysis in China and challenges HR leaders are all facing.” – Charlie Li, EMC