The reason for [The,War,for,Talents]

　　What’s the weapon for success in the commercial world? Maybe most of the respondents will answer “people”. For foreign companies in China, high-end talents, especially the Chinese local talents, always play an important role in their development in this country.
　　In 2012, the foreign companies are to spend a great amount of time, money and energy in finding the best employees in China. The 2012 war of contending for talents was even started at the end of 2011. Like previous years, Ms. Zhang Yuzhu still devoted herself to the recruitment campaigns in the campus and tried to persuade the high-talented graduates to join in her company instead of others. As the vice president of HR of Amway Greater China & Southeast Asia, Ms. Zhang could fully feel the vehemence of the war for talents in the universities. “Every foreign company in China wants to have the best graduates work for them,”she said. “A top student should have ten offers in his/her hand. We could thank the God if 60% of our candidates take our offers.”
　　Mr. Wang Wenji, Employment Director of Deloitte (China) shared the same feeling with Ms. Zhang. At the end of 2011, Deloitte established the goal of recruiting 2000 graduates every year in China. Now he has to face the competition from both other foreign companies and Chinese local banks and financial institutions. He was not surprised to find that the title of the “Best Four Accountancy Firms in the World”Deloitte shares with other three companies is not as appealing as before for the new graduates. This is a new challenge for Deloitte.
　　“Years ago, the competition for high-end talents only existed among the four accountancy firms. But now the Chinese local banks are more and more attractive for the young generation of students. From 2010, we have to deal with more competition from those nonaccountancy firms,” Wang Wenji said. He could not remember how many times he was asked to compare the reliability and stability of working in Deloitte with working in state-owned banks when he attended the recruitment meetings in the universities.
　　This is only the epitome of the war for talents in 2011 and 2012. It is undeniable that the HRs of foreign companies are under bigger pressure of recruiting and retaining suitable workers. According to the statistical data from a famous job-seeking website, the daily number of new vacant positions in China could reach 2 million in 2011, one third larger than 2010. Half of these vacant positions were published because of the resignation of former employees. Some entrepreneurs of manufacturing companies even raised the salaries by 30% but still failed to find enough employees. According to the forecast of the website, the Chinese will see the average growth of 9.8% in the salaries of different industries. 　　In addition, the depression of global economy forces many companies to lower their expectation of growth. Against this background, a large number of companies diverted their eyes to the emerging markets represented by China– they on the one hand increased the investment and efforts of recruitment in China, leading to the salary increase of Chinese employees. On the other hand, these companies have to deal with the increasing labor cost in China and the weak performance in the European and American markets. “Actually they all face multiple stress,” said Cao Yanping, Consultancy Director of Mercer Management Consulting.
　　 High Staff Turnover Rate
　　Quoting Ms. Zhang Yuzhu, “Am- way has 300-400 job vacancies every month”. The employees’ resignations and company’s expansion make the talent reservation of Amway stay in the status with demand larger than supply. In spite of the uncertain economic outlook, she believed that the average salary of Amway China will rise at least 10% in 2012.
　　After all, “the annual salary increase of Amway China was beyond 20% in the past two years. Even the grassroots employees enjoyed such a big increase, let alone the employees with management experiences. They have more opportunities in the market,” Ms. Zhang said. “Every time they found a new job, their salaries could increase by 30% to 40%. It is hard to retain high-end talents.”
　　In 2011, the turnover rate of Amway China is about 16%, lower than the average rate of the food industry (21%). Compared with Amway, Deloitte has to witness more employees leaving. In Mr. Wang Wenji’s opinion, the number of employees that actively resign is increasing in all industries. There are two tendencies being formed in the talent market of China. Firstly the staff turnover rate is so high that the companies cannot finish the inheritance and spread of corporate culture. Secondly, the time an employee stays in a company becomes shorter and shorter, forcing the company to take more measures to retain high-end talents.
　　“Previously, an employee could change a new job every three years, but now he/she may do it every two years. The industry Deloitte is engaged in is very young. Every year we recruit 2000 graduates from Chinese universities. If one of them just leaves before working for three years, it will be a great loss for the company,” Wang Wenji said. Usually, a new employee can exercise his/her own real power in the second year after joining the company. Therefore, if the employee just leaves before making real contributions to the company, it is definitely a kind of loss for any company. 　　Presently, the staff turnover rate of Deloitte China is around 20%. The company needs to recruit excellent graduates from first-class universities to maintain the sustainable growth of the company’s talent pool. Wang Wenji said that “Deloitte is caring China as much as other foreign companies. Maybe recruiting 2000 students one year is not enough. We are planning to change it.”
　　Not only Amway and Deloitte, other foreign companies are busy recruiting high-end talents to support their fast expansion in China, which generates a lot of vacant positions. Therefore, the demand for the new graduates is reasonable. In addition, it is quite normal for a foreign company to take the talents from its peers when proper time comes.
　　“The survey of Mercer revealed that it is quite normal to see companies recruiting each other’s employees in the positions of distributions and marketing. It is noteworthy that the turnover rate of frontline workers is very high, bringing huge pressure of labor cost for the labor-intensive enterprises,” Cao Yanping said.
　　The world-known consultancy company Towers Watson shares the same opinion with Cao Yanping. According to the company’s yearly salary survey, the industries with a large number of grassroots employees had an amazing turnover rate in 2011. The rate was even higher in the manufacturing and hi-tech enterprises, whose turnover rate of frontline workers reached 103.7%. That means some enterprises have changed all their employees within one year.
　　Liang Yaping, HR Director of BASF Asian-Pacific Regions, did not deny the difficulty in recruiting frontline workers in China. “It is hard for us to recruit machine operators, for example. This is because people are not willing to work for a chemical company because of the possible contamination. In addition, some experiences are needed for machine operators in a chemical company. They should be trained before and have a high recognition of environment and safety. It is hard to find qualified people.” Therefore, BASF usually begins to recruit workers half a year or even one year earlier than their projects in China. They also need to try their best to retain these workers because it takes a long while to train a new employee if the old one leaves, increasing the cost of the company.
　　The high turnover rate of the frontline workers, especially the blue-collar workers, has become a severe headache for more and more companies. Cao Yanping attributed this to the expanding size and increasing production capacity of these companies in China. “In addition, the frontline workers are very sensitive to the salary increase. If another company offers a wage that is one hundred yuan more than the current one, they will leave.” 　　 Retain Key Talents
　　Apart from the grassroots workers, the key talents are also the focus of the war for talents. Nearly all foreign companies HRs admitted that their companies faced great competition in the talent market in 2011 and the situation would be continued in 2012. “The more famous your brand is, the more chances you have to see your employees taken away by others,” Zhang Yuzhu said. “Many companies have clear strategies of headhunting employees of P&G, Unilever and Amway. This is a problem for the well-established enterprises.”
　　In her opinion, a company should take measures to retain the good employee planning to leave. But what’s more important is that it needs to set up a talent training system. In other words, it should have capable substitutes for key positions and won’t be lost if the key positions are left vacant.
　　“The managers could see who are potential substitutes and make proposals to us. We then move the potential employees from different provinces (about 20-30 people) to our headquarters for an intensive training session, through which we screen out one fifth of them as our key talents. These people will be given a bigger space and more opportunities for promotion in the following year.” This is how Amway China’s talent training system works.
　　BASF has a similar system of promoting internal workers. Guan Zhihua, board chairman of BASF China said:“We do not implement our strategies of talents like headhunters. Good opportunities should be given to the inside employees first.” BASF China encourages the free flow of employees in its dozens of joint ventures and self-owned enterprises in China. Therefore they have bigger opportunities for promotion.
　　Nevertheless, the salary is an inevitable topic despite the consummate talents reservation system. When more and more employees resign to pursue higher salaries, HRs should think of how to balance the increasing labor cost and the weak business in depressed economy.
　　Xu Wenzhong points out that the companies should have a full understanding of their own profiles and strength. “The managers should know what they want and what they can afford – business development and talent team construction. Then he can think of efficient solutions.”
　　Xu suggests that the executives should make use of the limited resources to satisfy the biggest demand. This requires the differentiated resource allocation. “Take the fund company for example, a fund manager might have the bonus six or seven times as high as another fund manager at the same level because his performance is much better than the other one,” said he. In addition, a company should develop more soft incentives from the viewpoint of “overall com- pensation”, such as the encouraging development system, friendly corporate culture and so on, to retain the talents. 　　 2012: Salary Competition
　　According to the survey made by the global HR survey organization CRF Institute, the companies in China attached more importance to the sustainable development of their business, such as the customer satisfaction, brand positioning and technological innovation in 2010; but the strategies turned to the career development of employees in 2011 for the purpose of retaining key talents. After making an appraisal for hundreds of foreign companies’Chinese branches, CRF found that 94% of smart employers had fixed career development paths for the talented people inside their companies. The proportion was much higher than the figure in the European market, which was 83%. In addition, the number of HR departments shifting their focus to employees’career development increased by 8% in 2011 compared with 2010.
　　This brings another problem for the HRs of foreign companies’ branches in China. The rising Chinese market excels the European and American market in outlook and growth potential. Then, how can the HRs in China persuade the headquarters to make bigger budgets for China for the betterment of employment system. Usually the European and American bosses could not understand the requirements of Chinese employees, especially when they are busy fighting against the depression in the home countries.
　　“There must be difficulties in communication and persuasion,” Cao Yanping said. “The GDP growth in Europe and the U.S.A is between 2% and 3%. But in China the growth rate hit 8%. HRs should keep informing the headquarters of the development in the Chinese market.”

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