Escalating Turnover

With the recent earthquake in Sichuan having such a massive impact on China, I am sure many of us failed to notice when a minor tornado ripped through the small town of Wuchuan in Guangdong province in early June injuring 16 people. That, I suppose, is unsurprising. There is, however, another tornado currently ravaging China. This one is the problem of spiralling employee turnover.

In my previous entry, I discussed the two very different pools of talent that organizations based here in China can drink from. The one containing talented, experienced and available employees is close to running. This means that organisations across the country are desperate to get their hands on the finite talent that is available to them, and they are prepared to do almost anything to do so.

The most common way of trying to entice talented employees is by offering them better positions and more money. A survey by Mercer in 2006 revealed that these two were the weapons of choice for the majority recruiters - 23% preferring more money and 19% opting for promotion. Clearly, throwing money and better positions at employees will work in the short term. However, this tactic creates something of a vicious circle. If an employee is attracted to an organization by money, it is also likely they may be attracted away from an organisation by money.

This is where we see turnover spiralling out of control. As soon as one organisation begins to offer more money, then others follow suit. This has lead to some worrying statistics. In many major cities, turnover has now topped the 10% mark and is in no danger of declining. Mercer also revealed that the average Chinese employee between the ages of 25 and 35 is now likely to stay with their organisation is now likely to stay in their current role for less than two years - a figure which has decreased dramatically in the past five years.