Corporate Brands Need Facelift to Fight the War of Talent in China
By Fanny Chan, Publisher,
About the author
20 Sep 2005

Powerful forces are shaping today's workforce and hampering companies' ability to attract and retain the talent they need to meet business priorities. Globalization, virtual work teams and the cross-penetration of markets by aggressive competitors demand a shorter and more flexible corporate planning cycle. Other important issues, such as the enforcement of corporate governance, the rise of the Asian economy and soaring oil prices, have changed the corporate landscape dramatically in recent times.

Consultancy McKinsey in 1998 coined the expression "War for Talent" (1,2), predicting the challenge of an "executive gap" an age of escalating competition to win superior talent , one triggered by global demographic, social and economic changes as populations in the developed world age and workforces shrink. . That age is now here. The public and private sectors now face a growing scarcity of executive talent.

The Human Capital Challenge in China
In the China context, these global trends in human capital management are playing out in particularly challenging ways. Although China has rapidly become a global economic force, at the same time a lack of skills has led to increasing labor shortages in many areas. As the economy grows and moves into higher value-added work, the challenge of attracting and retaining staff is rising with the skill level, as demand outstrips supply, especially in the mid-level and top-level leadership.

The establishment of many more foreign invested enterprises, 44,000 in 2004 alone(5), in recent years has steeply sharpened competition just as a much greater threat begins to come into focus ¡X the growing number of Chinese private sector companies able to offer competitive salaries and career paths for young, talented Chinese.

As a consequence of this competition, the salaries of technical and professional staff at multinationals in China have increased 25 percent in the last three years and job-hopping has become endemic. Turnover among skilled managers is in the 30 to 40 percent range annually, versus a global average of 5 to 10 percent.

Revisiting the Talent Management Strategy
The talent game is changing and companies must now make talent management a top priority, create and perpetually refine their employee value proposition, source and, above all, develop talent systematically.

Peter Drucker wrote about "attracting and holding knowledge workers in the next society".(3) Said Drucker: "Knowledge workers know when they can leave. They have both the mobility and confidence. This means they have to be treated and managed as volunteers...The first thing such people want to know is what the company is trying to do and where it is going. Next, they are interested in personal achievement and personal responsibility - which means they have to be put into the right job. Knowledge workers expect continuous learning and continuous training. Above all, they want respect¡Kfor the area of their knowledge".

Deloitte recently published a study on talent management strategy (4) and surveyed on top employees' expectation from their employers. The responses echo Drucker's earlier insight on managing talents to provide them with challenge and growth. The top three responses were: 1) interesting and challenging work, 2) open and two-way communication, 3) opportunity for growth and development. Monetary rewards came eighth.

Business leaders should revisit their talent management strategy regarding their top talents in order to identify talent and develop critical skills within their companies -- skills that will allow both employees and companies to reach new levels of performance. Companies need to engage existing talent and stretch its horizons and possibilities, by deploying talent in new and exciting ways in "stretch" assignments, while allowing employees to learn. They will also need to find multiple careers within the same organization for employees by connecting them to their peers and other professionals whom they can learn from and explore other career opportunities.

Attracting and Retaining the A-Performers
"A"-level performers are described(1) as "much more productive than their mediocre peers and provide a 50% to 100% performance premium to their employers, adding significantly to sales booked, customer satisfaction, quality of output, internal morale, contributing to the overall corporate competitive advantages and values".

The A-performers, amongst the best in their professions, are successful, almost always employed someplace else and are highly valued by their current employers and sought after by other employers.

A-performers never look for a job; they look for a career advancement opportunity. They seek out positions that will enable them to probe and extend the limits of their expertise in their field and employers that will provide an environment for accomplishing important and meaningful work.

A-performers are motivated in a very different way than their less capable co-workers when it comes to choosing employers to develop their career. They expect much more than an opening's challenge, its compensation, or the quality of life it supports. Instead, they have to come to believe that the value proposition of the recruiting organization is better than the value they receiving from their current employer, before they make any career decisions.

The A-Performers carefully evaluates a prospective employer's culture, belief system, mission, leadership priorities, employment practices and track record. Those factors determine the nature of the work experience an employer provides to the people it hires. And, that experience is the essence of an organization's corporate brand image.

Corporate brand management has been one of the top items in corporate agendas to be given a substantial facelift in recent years for a number of reasons; to rebuild and strengthen stakeholders' confidence as well as to fight the War of Talent. Corporate brands have now also become powerful tools used in talent management to win A-Performers. To compete in the new talent game, corporations should offer both a challenging job and a compelling corporate brand image; a brand image that describes its true company value proposition, culture and talent management experience from selecting, developing, and retaining world-class executive talent, a corporate culture image that cannot-be-matched by other competitors.

Living in the age of "War for Talent", many big multinational companies are fighting the war to attract and retain "A"-level performers, a person who is among the best talent in their profession. The companies doing the best job of managing their talent deliver far better results for shareholders. Thus the war for senior executive talent will remain a defining characteristic of the competitive landscape for decades to come. In the China context, the particular skill shortages mentioned most often are creativity, an aptitude for risk-taking and, above all, an ability to manage in everything, from human resources and accounting to sales, distribution, branding and project-management. The war to win Chinese talents looks to be a tough one to fight and corporate recruiters must be ready to sharpen their unique weapon, the corporate brand, to face the challenge.

  1. The war for talent - Elizabeth G. Chambers, Mark Foulon, Helen Handfield-Jones, Steven M. Hankin, and Edward G. Michaels III. The McKinsey Quarterly, 1998 Number 3.
  2. The war for talent, part two - Elizabeth L. Axelrod, Helen Handfield-Jones, and Timothy A. Welsh. The McKinsey Quarterly, 2001 Number 2.
  3. Managing the Next Society - Peter F Drucker, St. Martin's Press 2002
  4. It's 2008: Do You Know Where Your Talent Is? Why Acquisition and Retention Strategies Don't Work. A Deloitte Research Study, February 2005
  5. Human Resource Challenges and the Development of China's Financial Sector, Deloitte Touche Tohmatsu,: June 21, 2005

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