The War for Talent in China (Part 1)

In early November 2011 I spent a couple of weeks in and around the city of Shanghai. One item on my itinerary was a discussion hosted by the Ivey Alumni Association, Shanghai Chapter and the Canadian Chamber of Commerce in Shanghai.

Of all the many challenges facing China is the need not only for workers but, increasingly, skilled professionals. The war for talent is perhaps most keenly felt in the huge and rapidly growing region of Shanghai. With a population of 24 million, it is both the largest city in China and one of the largest in the world. To see Shanghai today is to experience a highly advanced, dynamic, and sophisticated consumer culture. It is also one of the toughest places in the world to find and keep talent.

Consequently, the topic of my speech was the war for talent and my perspective on the actions organizations in Shanghai can take to attract and keep talent. But there is nothing unique about the advice I provide. The tactics and methods I suggest are equally useful and relevant in any region of the world, but especially in those situations where organizations need more than pure labor but instead need highly skilled and mobile professionals.

Part One

A presentation by Bruce Miyashita to the Ivey School of Business Alumni Association and the Canadian Chamber of Commerce in Shanghai

November 2, 2011

Last year most of us spent at least 150 days working and commuting, 90 days sleeping (we hope), 30 days eating (if that), and perhaps 95 days for everything else. A job is important. It provides the money that buys our food and pays the rent. For some, a job brings money and the chance for a materially wealthy lifestyle and social status. But for some with the education and means there is also a desire to have a connection and meaning to their work beyond money.

I am not going to tell you that money isn’t important in convincing a young Shanghainese graduate to join or stay at your company, but I hope to make the case that many people want to belong to a respected organization that will help them develop, treat them fairly, and provide them with a pathway of progression. This is, I believe, the only way to successfully grow and improve when talent is scarce.

For years firms have fought a war for talent. The nature of this battle has evolved and there are differences depending on the region and industry. But like physics, there are also some universal issues and tactics.

It is also a global war because the skilled professionals you need are the same people other growing markets want. Consequently it is not just a battle for talent within Shanghai or China, but a battle to retain talent within China and to draw them from other countries.

As you know toughest battle is occurring in China and particularly here in Shanghai. This morning I read that Shanghai alone needs at least another 90,000 Chinese and foreign financial professionals in the next 3 years, an increase of 40%.

My aim is to share with you my ideas on what talent strategies might help in your incredibly challenging business environment. I would not presume to inform you of the challenges you face, but as a visitor in your country, here are my observations:

First, there is no single “Chinese economy” but several enormous economies growing and evolving within China. Some are focused on relatively low wage, low skilled operations, but other regions have advanced to high value-add products and services and have customers with high expectations.

Second, to meet the needs of more demanding customers, firms must attract and retain workers and professionals who are mobile, marketable, and who know they are marketable.

Third, multi-national firms are no longer the automatic favored choice of Chinese professionals. There are many Chinese firms that offer ambitious people opportunities for interesting work in fast-growing and respected organizations with possibilities of advancement and good pay. This trend is underscored in a recently published study by Korn/Ferry (“Rise of the Chinese enterprise as employer of choice” by Marie Han Silloway, Steve Fisher, and Steve Jiang).

Fourth, in many industries the easiest productivity gains are mainly captured. The need to increase productivity, quality, and consistency continues, but will increasingly require skillful knowledge workers.

Fifth, rising expectations of consumers is driving a shift to an innovation economy. But shifting a business from a commodity focus to an innovation agenda requires changes in how managers behave and in the kind of talent needed.

Lastly, many countries, including China, face huge demographic changes as their population’s age.

I do not believe there is any single answer to the challenges faced by you and your firms. But I have had direct experience in seeing the benefit when one and ideally several of the following elements are used by organizations.

To grow and improve when faced with scarce talent and talent that are mobile, I suggest a strategy that attracts and retains a few “star” employees, but emphasizes raising the performance and retention of the many solid, middle-range employees.

Here are the elements that I will discuss:

• A properly designed management accountability hierarchy;
• The ABC approach of positive reinforcement;
• A golden career pathway for employees;
• Effective adult learning;
• Processes to tie pay to competencies to results;
• Managers who coach, not just supervise;
• Building pride of belonging.