A global human resources firm has apparently discovered what many of us already know: the secret to keeping hold of staff could be money.
According to results of a survey released yesterday by Hewitt Associates, for the first time compensation payment for work done was reported as the biggest influence on employee loyalty, followed by processes the organizational structure a company has in place and career opportunities.
Findings that may explain high turnover rates for foreign businesses amid a shortage of talent.
"It is simply a supply versus demand situation," said Stella Hou, Hewitt Associates Head of Regional Sales and Accounts.
The result is a rise in salaries offered by foreign employers across the board in Shanghai, with the fastest increases year-on-year taking place for managers (from 9.6 to 10.1 percent) and professionals (from 8.7 to 9.2 percent).
For graduates fresh out of school, positions in marketing, research and development and management attract the highest monthly base salaries: Around 3,500 yuan (US$432).
Shanghai is not the only place in China seeing the rise.
Countrywide, companies are paying 8.4 percent more than last year, way above the 2.3 percent rise in the consumer price index and almost as high as the 9.5 percent growth in the gross domestic product.
High employee turnover is another striking feature of the survey.
Average turnover rates for foreign businesses across China rose from 8.3 percent in 2001 to 14 percent in 2005. In Shanghai, the numbers rose from 11 percent last year to 14.6 percent in 2005.
This talent crunch should be a sign for foreign organizations to develop a talent pool before forging ahead with expansion plans, said Jean Lin, a Hewitt consultant.
"Factors with the greatest impact on an organization's ability to succeed in China today are employee motivation and engagement, acquisition and retention of talent, talent management and management skills, a positive organizational culture, and effective brand alignment," Lin said.
This lack of human resources in certain fields has been a growing concern. Earlier this year, the British Chamber of Commerce in Shanghai held business forums to deal specifically with talent management. In a recent white paper, the American Chamber of Commerce said the No 1 challenge for its members was attracting, developing, and retaining management staff.
Sales and marketing staff are hardest to retain, the survey suggests.
(China Daily September 22, 2005)
