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.

Calling a Ceasefire

So, turnover in China is spiralling seemingly out of control. Why is this? Why has a full-scale talent war broken out? In previous blogs, I touched on two of the major reasons.

China's pool of talented, skilled and experienced employees is far too shallow. Since the days of Deng Xiaoping, China has been growing, and growing fast - in each of the past six years it has enjoyed double-digit growth. On face value, this is great news. China is developing faster than any other nation in history and, as a consequence, Chinese people are enjoying far greater economic freedom. However, dig a little deeper and things get a little more complicated. Much of this growth may have been built on Chinese manpower, but talent and expertise imported from elsewhere. Even now, two decades after China first began to seriously open to foreign investment, too many multinational organisations look away from the mainland for managers and highly-skilled staff.

So - even after the economic miracle we have seen in China - why is there still a dearth of Chinese talent? This brings us to the one of the major reasons behind the war for talent. Even with talent so scarce, organisations are not doing enough to develop their existing employees. To continue our military metaphor, many organisations are developing a 'siege mentality'. They are charging into the job market with all their guns blazing to fight it out over the scraps of talent that are available. Their weapons of choice - salary, benefits and promotion.

The problem with the tactics most organisations are employing is that, ultimately, they are self-defeating. Even if they bring victory in the short-term, they serve only to prolong the conflict. For example, if an organisation manages to lure in a skilled and experienced new hire with the promise of a lofty position and bump in salary, they satisfy their immediate needs, but sew the seeds for problems further down the line. Each salary increase they offer sets a precedent for both employers and employees. The employee sees that their talents are saleable assets, they can auction off to the highest bidder. The organisation learns that if it wants talented employees, it needs to open its wallets.

To use one final ‘talent war’ metaphor, organisations need an olive branch. They need to make peace. Rather than fighting it our for one or two talented individuals, they need to develop the talent within their own team.