What keeps Managers awake at night? One issue of constant and major concern is certainly Human Resources. We are therefore dedicating this Fiducia China Focus issue on this ever important topic by giving insights into talent search, coaching and employee management.
 

The unabated influx of foreign investment to set up new production facilities as well as to expand existing projects continue to exert a high demand for skilled and talented human capital against a very limited pool of talents, be it on the managerial, professional or skilled labour level. The consequential "war for talent" results in turn-over rates of up to 30 percent and "employees’ life spans” of less than 12 months in specific areas and professions. Under these conditions RETENTION MANAGEMENT is a must and sets in from day one to retain talent within a company. But retaining talent within a growing organisation is only one part of the equation and not enough, considering the sheer volume of demand seen against the acute shortage of skilled talents.

How can this situation be overcome? When we look at the present educational system – generally the tool to remedy the above described imbalance, we find that the system is – at least for the next few years – not in a position to do so because of the following reasons. Firstly the present educational system is mainly based on academic learning thereby providing little practical skills and this accounts for the technical as well as the managerial sector. Although significant efforts are being made by the relevant authorities to change that it will take a number of years to adapt to the quality and numbers demanded, e.g. today we have 20 foreign invested enterprises sharing one MBA graduate. Exacerbating this situation even more is the fact that the local private sector and since recently even the state owned sector are more and more competing for the same skilled talents and we therefore see the situation worsen before it is gradually getting better in the next few years.

A shift to human development - More and more the human resources departments see a shift from the formerly purely recruitment orientated activities to human development activities. Human development meaning the introduction of internal and external training and coaching programmes for staff to develop existing talent within the given human capital base of each company. So with relatively little effort and input an employee’s latent talent can be easily tapped and brought up to higher levels. This improves the human capital potential of the company but also the performance, and – very important for every Chinese employee – also enhances the career development prospects.

So what are foreign companies in China doing – considering the above:
The multinational companies started the trend of providing training to staff and it is now followed by more and more medium and small sized foreign companies whereby it is offered these days in a multitude of forms:

In-house training

• In-house training with external trainers, the most common form of training. The priority is on vocational training for English language, followed by skill development in different sectors (technical, sales, marketing etc.)

• Second stage and for larger organisation is the setting up of company own training centres as all multi nationals have done and are continuing to do, e.g. Metro has just opened its third training centre in China.

External Training

• Mainly for senior staff. The most common in China at present are external MBA programmes (EMBA). There are already some excellent programmes offered by local institutions e.g. China Europe International Business School (CEIBS), etc.

• Overseas training at company head-quarters - proving to be a very valuable retention management tool as well as a skill enhancing tool.

In regard to the external training and the relevant cost involved, constituting an investment in the employee, companies are contractually locking in employees with non-compete and punitive clauses to safeguard against early departure of talent enhanced staff. The good news is that most employees do accept such without complaint.

Special cultural aspect within retention management – Human development is in general a main tool of retention management. In China however, where a career development programme / plan forms a major and integral part of an employees reward package it has a higher priority and has proven to be a really effective tool to retain staff. Best examples are last year’s employees of the year of which all of them did not pay the highest salaries but all offered excellent career development programmes to their employees thereby generating a positive corporate culture resulting in some of the lowest turn-over rates in their respective industry.

Written by Mr. Hans W. Stremme, Senior Consultant.  Contact the author at
hwstremme@fiducia-china.com (www.fiducia-china.com)

China is now a daily news item. Businesses lust after China’s huge market — 1.3 billion people generating $150 billion of economic activity. China’s growth rate, at 9%+, is blistering. The world is mesmerised by the idea of such a vast country emerging onto the industrial scene.

Service professions have rushed in. Coaching practitioners, however, have been tardy; business coaches are scarce in China. As a recognisable service industry the field is barely 15 years old. But coaching is now becoming professional, with bodies such as the International Coaching Federation establishing standards and qualifications. And in China, simply teaching a new generation the fundamental rules of business is an overwhelming task. Do mainland businesses really have time for more training?

Despite these concerns, coaching is a concept that finds broad appeal in China, and a field that promises to become a cornerstone of business consulting.

Chinese Reactions to Coaching
My company’s work with multinationals in China convinces me that coaching is a tool easily assimilated by Chinese companies.

Most Chinese employees erect no barriers to adopting a coaching perspective. Like people everywhere, they differ as individuals in the extent to which they are able to learn and use coaching concepts. But there is no unique cultural barrier. In fact, I contend that coaching skills are universally applicable, because in coaching we focus on people and their individual aspirations, surely something fundamental to inter-personal relations in all contexts.

In business coaching the degree to which an individual can absorb and appreciate coaching skills varies not with culture but, much more crucially, with maturity and management experience. Newly appointed staff frequently confuse the purpose of coaching with other goals. For instance, a manager’s responsibility for directing and coordinating tasks often takes precedence in
the inexperienced person’s mind, making it difficult to broach a relaxed coaching discussion. The experienced manager, instead, will put such tasks on the back burner while allowing the person being coached to guide the discussion. This lack of clarity is the biggest challenge to coaching in China, not any presumed cultural barrier.

China’s Biggest Issues
China’s unique historical position compounds the problem of receptivity. There are, simply, too few experienced managers and too many enthusiastic but clueless young staff. Finding and developing the right human capital remains a key issue.

Underlying socio-economic problems complicate the lack of experienced staff. There is, first, a growing imbalance between China’s developed east coast and undeveloped inland areas.

Second, there is an obvious generation gap: people in their 20s have little in common with their parents. Third, the education system is in need of reform and the private sector is rushing in, but neither will be sufficient to match retraining needs for a generation of displaced workers. And most important, there is a value vacuum at the heart of society.

The Outlook for Coaching
The search for inner direction explains many of the social fads and passions now sweeping Chinese society. Hence the explosive growth of direct marketing and insurance networks, interest in popular spiritual practices (“qi gong”, for example), and impressive sales of inspirational literature.  Inevitably, when the individual concludes it is on its own in finding a value system, it becomes keen to absorb every possibility. This fuels openness to self-transformation, an openness one can feel in the air in China. Such individuals are ideal candidates for coaching. Coaching is the consulting work that most honours the individual. The general population will respond positively to coaching principles when they are available.

Conclusion
For businesses in China, the middle-management competency gap is perhaps the most glaring personnel problem. The coaching process, because it empowers people to fill that gap, is a fast track to solving this problem.

Written by Mr. Edward Irons, a Hong Kong-based consultant and coach trainer.  Contact the author at edirons@aol.com (www.coachingchina.com)

A dog and a horse loved each other very much. So they wanted to do the best for each other:
The dog kept the best bones for the horse and the horse served the dog with the most scented hay.
And both starved.

I often feel reminded of that story when I talk to businessmen who start working in the Chinese market. Most are convinced it is enough to act with the best intentions. But to reach your goals it is important to know your partner must be happy. This is true for all business matters. It is extraordinarily important, however, when we talk about staff management.

The war for talents
Where highly qualified employees in China are concerned, one may speak of a current “war of talents”. Job hopping is a big problem. Western companies invest a lot of time and money in ambitious Chinese graduates or employees. But often they use their newly acquired qualifications to earn more money by moving on to other companies. This means loss of money as well as brain drain. You may also feel disappointed and cheated. So the urgent questions for Western companies are: how can we try to guide or motivate our Chinese employees in a culturally appropriate way to make them stay with our company?

Hierarchical thinking has an impact on your staff organisation
Western firms often believe in flat hierarchies. In China one finds a strictly hierarchically structured society where differences between people are seen as part of a natural order. To demand equality between people or within a group could provoke the following reaction: “All employees have the same rights and positions? Do the monkeys rule the zoo?” As a consequence you should establish clear hierarchical positions with clearly defined responsibilities. Other solutions will irritate your Chinese colleagues.

Management by…?
Giving your employees a free hand to reach certain objectives, encouraging them to work by themselves without permanent assistance from a superior is – in the view of a Chinese employee – not a compliment or a sign of confidence but a lack of interest in his/her work. You don’t care for them, you don’t instruct them, which means: you are not interested in them, or worse, you don’t like them. As a consequence they will not develop any loyalty towards the company.

Ambitious young tigers
Young, highly qualified Chinese want to make use of all the opportunities the booming Chinese market offers. Good salaries and clearly defined career prospects are therefore important means of keeping them. Company size governs whether you add a private pension system, health insurance or loans to help employees to buy flats, cars or education for their children. But don’t forget the most important (and cheapest) method of retaining staff: accumulating knowledge of the culture you have to deal with! What are its philosophical roots? What perception of time, of communication or of aims in life do your employees have? What do these values mean for your way of doing business or leading your staff?

Written by Dr. Hanne Seelmann-Holzmann, owner of “Dialog – Management Consulting for Successful Business in Asia”.  Contact the author at h.seelmann@dialogasia.de (www.DialogAsia.de)

Mr. Liu Zhengrong, a 36-year old Shanghai-born Chinese, who studied at a university in Cologne, Germany, is a Human Resources Manager at Lanxess in Leverkusen, Germany, a former subsidiary of Bayer AG. He is now responsible for 21,000 employees, 10,000 of whom are in Germany. Before becoming Human Resources Manager at Lanxess in July 2004, Mr. Liu had first been an intern at Bayer in Beijing and was then appointed Chinese teacher for the management at the Bayer AG headquarter in Germany. That was the beginning of Mr. Liu’s career development in a foreign country.  Mr. Karl-Josef Ellrich of the Workers’ Council said that Mr. Liu knows what he wants and expresses himself very clearly. Through his work as a Chinese teacher for the Management at Bayer, the company realized his potential. Mr. Liu was promoted to Human Resources Manager in 2004. The management and the Board of Directors appreciate Mr. Liu’s performance highly and he is well-recognised in the company.  In order to save 100 million Euro, Mr. Axel Heitmann, CEO of Laxness, is planning to close down one of the unprofitable subsidiaries either in Dormagen, Germany, or Tarragona, Spain. He believes that it will be the first major challenge for Mr. Liu having to deal with thousand of employees being laid off, and how to maintain staff morale in the company.

The story of Mr. Liu sends a signal that emerging Mainland Chinese can be successful in foreign companies, and that they can go international successfully.

According to a survey regarding personal development goals of Chinese Managers, it was found that Chinese Managers have similar development goals. Most of them want to improve practical management skills to make an immediate impact on performance. This includes the development of practical management skills, improving their ability to build effective work groups, learning how to initiate and implement change, how to enhance the ability to think creatively, the ability to think and act strategically, as well as to develop skills related to the facilitation and coordination of their day-to-day work such as goal-setting, planning and developing systems and procedures.  However, few managers show their interest in developing skills through indirect processes. To most of the Chinese Managers, increasing their ability to develop others, developing a better understanding of their own strengths and weaknesses, improving their ability to get along with many different types of people as well as increasing their ability to balance conflicting demands are not ranking high. Based on the survey, fewer even think to develop and improve the ability to communicate clearly with and listen carefully to others.

It was pointed out that building effective teams is crucial for Chinese managers, but building communication skills is not important by comparison.

Clarity is one of the keys of good business writing. Learn how to KISS means how to “keep it simple and short”. Time is very valuable for management levels. They do not have time to read long pages. Some companies even limit the memos into less than two pages with single line spacing. It can also be in form of bullet points or PowerPoint slides.

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