Shenyang Company Annual Return Service
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Human resource management and labor-management relations in China are different from those in other countries because of different political and economic systems and social and cultural backgrounds. Lots of changes have taken place in human resource management since the 1978 economic reforms. As the economic reforms deepen and a market economy is established, changes will take place in the nature of labor- management relations and human resource management in Chinese enterprises.
Shenyang Human Resource Management – The Existing Problems
Many Foreign Investment Enterprises (FIEs) are now finding that the biggest obstacle to their growth in China is the acute shortage of high quality and experienced management. Foreign direct investment has soared in recent years and with it has the demand for quality management. As established businesses have grown, the need for new and far more complex management roles has emerged, which previously hardly existed in China's old state run enterprises.
Furthermore the rapid rise in the economy has resulted in a workforce with career aspirations and attitudes that have been forged solely from the experience of knowing a booming market. Job-hopping has become commonplace. With traditional local education still largely focused on academic knowledge to real life business situations, there is an acute shortage of practically skilled young people joining the workplace.
Shenyang Human Resource Management – The Necessity
As a result, the HR function has become one of the key issues for any developing foreign business in China. Pressed with the need to fill positions quickly, HR departments are hiring it seems at any price, lowering the qualifications they are prepared to accept to dangerous levels. This does not only result in a wage spiral, but also with a far lower level of competence in high end management positions. HR departments are now being thrown into a new era. Whereas originally HR was mainly about recruitment, the focus has shifted increasingly to development and retention and there are indications that salary levels are already beginning to rise - particularly when fringe benefits are taken into account. Average employee life may be no more than a year and so HR departments are under increasing pressure to find ways to retain staff. Candidates are also more sophisticated these days. They are getting choosier and are far more particular about what a company has to offer.
Shenyang Human Resource Management – Attracting Talent with Additional Benefits
So what are companies offering to appeal to their prospective employees?
Career development and training schemes are popular. However what is vital is that the training is delivered. It has been found in surveys that a large number of staff looking for jobs have left their previous positions because training or career development promises were never fulfilled. This stands in contrast to the belief of many companies that employees leave because they seek better pay.
Other strategies that companies are using to boost retention rates are company car, home loans, generally run over five years, or an MBA or EMBA sponsorship run over three years. Stock options are another perk for senior management that are being used in the market. There is also a trend to give local managers greater responsibility for managing their own affairs between clients / customers in China and the overseas offices.
The salaries of highly qualified staff, especially those with work experience, will continue to climb. Foreign enterprises will have to learn that key employees must be paid according to their marginal revenue product i.e. to the value that they add to the company, not to quickly out-dated and simplistic ideas about cheap Chinese labor. There is no adequate business reason to pay different salaries to two equally qualified employees, simply on the grounds that one is Chinese, and the other is a foreigner. The value of a staff member lies in what they produce, not in how little they can be paid.
Shenyang Human Resource Management – Retention of Staff
Retention of staff, particularly at a senior level is becoming a major company priority, not just for the costs in recruiting replacements, but because when senior management leaves, it is commonplace for members of the subordinate management team to leave with them. A reason for this is that generally senior management changes are amongst the most unsettling for staff. They feel insecure with how they will fit in with a new boss, and many decide it is time to look elsewhere. They also find it reflects poorly on the company and its image.
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