As the economy cools down, resist the urge to retain employees who stay out of fear, and increase your proportion of loyalists.
It’s no secret that modern corporate America owes no allegiance to employees (save executives) but what’s been a bit slower to sink in is that the new worker feels the same way right back at them. In fact, some corporate moves, such as elimination of training, use the results as justification to exasperate the cause. Gamification and other ‘measurable methods’, such as personality testing, etc… are trying to make up for what could be achieved through transparency, leadership, and development of soft skills.
Here’s where China’s otherness can play to your advantage: while China has its own HR rules, you’re likely not bound in the same way as you are domestically at the corporate level. So rather than rely on the fad-derived opinion of some disproportionally powerful director with no hard skills or sense of your business, you can just do what works. Of course if you have an HR superstar, take advantage of it, but my experience is that field is still lagging even at otherwise progressive companies, to say nothing of application in a foreign culture.
A lot has been made of high turnover in China. However at companies doing it right turnover is remarkably low, and was even during the most frenzied growth. I’ve failed more than succeeded at poaching some top performers, despite promises of promotions and massive raises.
Let’s get one thing out of the way: you have to pay competitively. There’s no employee you want who will stay at 30% below market. There’s no trick, no combination of benefits, that can statistically bridge this gap.
Of the three, I’d rather keep the loyal and lazy over the scared. Why? Because workers who are afraid are unpredictable, and here I think I’m in line with modern thinking that can value reliability over even short-term incremental gains. Things scared employees do: take another job on the side (maybe even with a competitor), put up even higher barriers to communications, sabotage morale, steal, lie, disengage.
To clarify, by lazy I mean those who may have a malaise on the job, but don’t feel enough pain to either rock the boat or look for other work. I don’t mean those who can’t show up on time. And by afraid, I mean those who feel their position, status, prestige, or income are in jeopardy.
One advantage of a slowing economy is it gives the ambitious a wider tolerance band to wait for you to get your act together, and it gives the scared more willingness to listen to your overtures. Even the loyalists will appreciate the relationship more as they see the hardships their friends endure. The point is, you have to do what it takes to earn their loyalty. I’ve posted on how before, but this is carried on best by your local champions, supported by corporate.
Because China had a massive skills gap similar to our post-WWII boom, you have a situation a lot of near-retirees (should) appreciate: many hold jobs they’re essentially unqualified for. And like in the US, the good ones rose to the challenge. On both sides of the Pacific these people have something in their hearts you can’t buy: they recognize they were raised up by the grace of their employer.
They, unlike most of the new workforce, will tend to consider the company’s long-term needs ahead of their immediate bonus. They will organically create an environment that attempts to pass on the same ethic. The magic is that in China, these people could be in their 30’s, and you could get another 20-30 years out of them. If you don’t have any, now is also a good time to develop some.
The key is not to turn that loyalty into fear as you strive to apply your modern management theory. Just like they learned whatever hard skills they needed 10 years ago, they need to approach it like a problem to be solved and skill to be learned, not an attack on their position, ability or character. ‘Matrix organization with Chinese characteristics’ may be order of the day, as they color things for local application, dynamically adding value so they’re not being 100% dictated to.
And in turn, giving them freedom, whether that’s for payroll, training, or team building, will allow them to take advantage of the slowdown to swell your ranks with the people you want, which will inevitably show up in whatever metrics you’d like to apply.
Practical China 