Playing the People Game

For this entry, I decided to draw inspiration from the sporting world. Specifically, I drew from an area close to my own heart, football (soccer for those who prefer to use American English). I realize that for those of you who are no sports fans, this might sound particularly dull. However, I will ask you to stick with me as I feel the comparisons I am about to make could be very useful to HR professionals and managers in China.

The football ‘industry’ in England is one of the most fiercely competitive spheres in the world. I am not just referring to what happens on the field here. Teams like Manchester United, Liverpool and Chelsea are not just fantastic teams; they are also massive businesses, competing for customers and advertising revenue as well as trophies. Another thing they also compete for is talent.

So, how is this relevant to you and to HR? Good question. The comparison I intend to make is simple. The world of football is ultra-competitive and the stakes are unbelievably high. As we all know, competition within the Chinese job-market is also extremely fierce. And, now, with the onset of the global financial crisis, the stakes are growing by the day. I would now like to give two examples that could relate to the Chinese job-market.

PAULO SOUSA – The benefits of patient hiring
The first example actually comes from my own favorite team, Queens Park Rangers. Before the start of the 2008/2009 season, they had a vacancy for the position of head-coach. The board decided to act quickly - some might say too quickly. They appointed Ian Dowie, an experienced, but limited candidate. The speedy appointment allowed Dowie plenty of time to settle in and to prepare the team for the upcoming season. However after three months in the role, results were poor and were getting worse. So, Mr. Dowie was on his way out of the club. The board then had to appoint a new manager mid-season to improve performances. In such a pressing situation, it would have been easy to make another hasty appointment. This time, though, they were in no rush. And, after much deliberation, they appointed the inexperienced but talented Portuguese coach Paolo Sousa. How did this affect results? It appears the patient approach has worked. After 13 games Mr. Sousa has lost just once.

I know, I know, you are now screaming, and “How is this relevant to me?” In the current economic climate, the stakes are just as high as in the cut-throat footballing world. Therefore, it is important you hire right. A wrong move could cost money your company can ill-afford. Therefore, it is vital to stay calm and do not panic when searching for new hires – use QPR’s second hiring model as an example. Even though a quick hire may guarantee limited disruption in the short-term; a wrong hire will guarantee major disruption in the long-term.

GIANFRANCO ZOLA – Avoiding knee-jerk reactions
My second footballing example takes in West Ham United. After their experienced manager decided to quit, they opted to replace him with a young up and coming Italian coach, Gianfranco Zola. Lacking experience and facing an uphill challenge, Zola initially struggled and results were poor. The board quickly fell under pressure from fans to remove Zola and speculation in the media grew quickly. However, they decided to stick by their man. Three months in and Zola began to find his feet, results improved and the pressure abated. In fact, at present, were he to leave the club it would be for bigger and better things.

This example can also translate into Chinese HR terms. Currently, not only is finding talent immensely difficult in China but the fiscal climate means that new hires – particularly in senior management positions - no longer have the luxury of a prolonged settling-in period – all that matters is results. It would have been easy for West Ham to see that results were not as good as they had hoped and to have panicked, with Zola being sent packing. However, they stood by their man and have begun to reap the rewards.

THE MORAL TO OUR STORIES
These two examples teach us two important lessons in regards to recruitment: (i) It is – now more than ever – vital for any organization to ensure they are clear and thorough in their recruitment process. They need to take their time to find the right person. Hiring fast does not mean hiring right. (ii) Once that person is in place, the organization needs to show patience. Chopping and changing personnel is only likely to chaos upheaval and poor results. If an organization has the right person in the right role, it needs to give them time to shine.

Mr Turnover

As I am not a HR manager, I do not encounter the rampant turnover that characterises China's 'war for talent'. So, how do I know it exists, how do I know the war is raging. Well, first, by talking to HR managers across northern China and asking about their challenges. Second, by following the media and by reading surveys from major organisations like Hudson and McKinsey to understand major employment trends. Just recently though, I encountered a third way - I met Mr Turnover.

Obviously, Mr Turnover was not actually his name. He was actually called Mr Zhang. I met him at an event in Tianjin. It was just that he epitomised everything about the 'war for talent'. He graduated in 2003 and in the time since, he had got through six different roles. That's it count them, six! When he told me, I was dumbfounded. 2003 was one year after I graduated. In the same period, I have had three major roles, which I would actually consider a little excessive.

I must admit, I had read countless surveys and spoken hundreds of HR managers, all of which told me turnover in China is rampant. Yet, I had never seen a living breathing example quite like Mr Zhang. Because of this, I was keen to pick his brains.

My first question was a simple one, "Why?". Was there some fundamental underlying reason that he moved between roles? Was he so greedy that he whenever he caught a sniff of more money he could not jump ship fast enough? Did he have one particular skill that no-one else in China possesses that makes him a unbelievably hot commodity? Were the organisations he worked previously so bad at engaging their employees that he felt compelled to leave?

As always, the situation was not as simple as any one basic reason. It was as though Mr Zhang was a microcosm for China as a whole. His reasons for moving were a mixture of push and pull factors. He was well-qualified in a highly sought after field, which meant that organisations were keen to tempt him away. "Headhunters are always on the phone offering more money", he pointed out. He was, though, quick to add, "It's not just about the money. At two of the companies I only lasted around three months. This was not financial, I just did not like the atmosphere or environment."

And, what of his current job? Was he ready to make it number 7? "No, not at all. The salary is good, I feel very comfortable with my colleagues and they offer great training."

My conversation with Mr Turnover was fascinating. It certainly confirmed that China's 'war for talent' is a complex issue for which there is no quick fix.

The Pied Piper of Tianjin

It was early Saturday morning and the light was just beginning to permeate through my curtains. As it was the weekend, I was looking forward to rolling over and enjoying two or three more hours of blissful slumber. Unfortunately, my plans were wrecked by a rasping voice piercing the silence from outside. In a vain effort to escape the awful din, I pulled my pillow up over my head to block out the noise. Alas, it was to no avail. So, crotchety and bleary eyed I shuffled across my bedroom floor to my window. I pulled the curtains back to see what was going on.

Beneath my apartment block is a large hair salon.Considering I lost my hair at 20, this place normally has no impact on my life whatsoever. However, on this particular Saturday, things were different. The manager was standing in the doorway of the salon holding a megaphone, screaming at his employees. The situation made me chuckle. The manager was clearly irked about something, and was making his feelings known. Unfortunately for him, his employees seemed oblivious. I could tell by their blank stares and vacant expressions that absolutely nothing was sinking in.

This leadership style is one that I have seen countless times in northern China. It is one in which managers and supervisors do not look to stimulate or motivate their teams to help generate new ideas and better performance. Instead they just expect them to blindly follow instructions. This reminded me of the old children's tale the Pied Piper of Hamlin. In this story a town in Germany is infested with rats and is desperate to remove them. So, the mayor hires a piper to play beautiful music to make the rats follow him. The piper does this and leads the rats to the river where they are all drowned. Everyone in the town was delighted. However, when the mayor refused to pay the piper, he used his music to lead all the children in the town away, just as he did with the rats.

The manager of the salon was trying to emulate the piper. Unfortunately for him, he did not have a magic flute and his staff were certainly not following him.
This is an all too common scenario in China. Too many managers believe leadership is simply about making others follow their lead. Sadly, because of this, their employees grow increasingly de-motivated. Here are a couple of examples that I have encountered:

1. My first example came when I was training staff at a major multinational in Tianjin about meeting skills. I asked how useful - on a scale of 1 to 10 - they thought their meetings were. To my surprise, I heard lots of 2s and 3s. "Why, so low?" I asked. "Our managers" they replied. "They talk, we listen. And, then, they make the decision .... We do not even need to be there."
2. The second example was a little different because the manager in question actually realised there was a problem. She was the sales manager for the DongBei office of a major multinational and was frustrated because her staff were reluctant to offer ideas and simply wanted to follow her lead - whether she was heading in the right direction or not. There were two reasons behind this (i) her predecessors followed the pied piper school of leadership and expected obedience rather than ideas from the staff, and (ii) the sales manager was imposing both in physique and personality and, as a consequence, scared her subordinates. The problem was that even though she recognised the problem, she did know how to solve it.

It took me a little time to grasp the relevance of the manager who woke me that Saturday morning - I was still pretty sleepy after all. As I am sure you will have read in my previous entries, top-quality talent is in desperately short supply here in China. The area where this shortage is most acute is in qualified managers. There is a McKinsey report that I have quoted several times in Network HR that illustrates this clearly. It found that by 2015, China would need 75,000 MBA qualified managers to ensure its continued growth. However, in 2005, it had less than 5,000. To make up this shortfall, most organisations still look away from mainland China for their managerial talent. By simply importing managerial talent, China is handicapping itself - it needs to develop homegrown talent to plug the leadership gap. China needs to put down the megaphone and major organisations need to invest in training to help develop leadership talent.

Drinking from China's Talent Pools

I first came to China in the autumn of 2005, just in time for the National Day celebrations. However, being new to the Middle Kingdom, I had no idea just what the Golden Weeks were like for travel. I had planned to leisurely travel around the country enjoying the fine weather and discovering a fascinating blend of culture. However, as I am sure you can imagine, I found traveling a particularly difficult prospect. The trains were packed to the rafters and air tickets were being hawked at premium prices. Therefore, I spent most of my time stranded in Beijing, before eventually snaring a bus ticket to Shanghai.

My brief stay just over three years ago may have been ultimately disappointing, but it whetted my appetite for China - I knew I would soon be back. And, so it was. Fast forward a few months and I landed in a cold foggy Beijing just in time for Spring Festival. This time though, everything was planned out like a well-oiled machine. My friend Ossie and I were to stay in Beijing for the fireworks and holiday fun, before spreading our wings and exploring the country on a wider scale. We tramped our way around several fantastic cities. However, one I remember with greatest clarity is Hangzhou. We stayed there for two misty, drizzly days admiring the West Lake and the ancient buildings that surround it.

I certainly have fond memories of Hanzghou because of the wonderful traveling memories it provided. However, having worked in the HR field here in China for the past two years, my memories of Hangzhou now also affect me in a different way. The job-market in China right now is a little like Hangzhou – imagine it as a city built around a lake. Actually, imagine it as a city built around two lakes. Or rather, a country built on two talent pools.

The first of these pools is full of fresh graduates in the first year or first few months in the job-market. This pool is deep and overflowing. To give you a practical example of this, statistics in Beijing released in 2007 estimated that over 200,000 would graduate that year. However, just 87,000 could expect to find jobs requiring university degrees. The other pool though, is almost dry. Employees with strong qualifications and – crucially – rich experience are thin on the ground (sorry for mixing my metaphors a little there). A McKinsey Global Institute survey in 2006 estimate that in the upcoming 10 years China will need 75,000 MBA qualified managers, of which – at the time – it possessed just 5,000.

These two frighteningly dissimilar pools are the reason why today organisations in China are fighting one of the fiercest talent wars the world has ever seen. Over my next few blog entries, I will focus on just this – war for talent.