Calling a Ceasefire in China's Talent Conflict

I believe I can bring the War for Talent to a peaceful end. I came to this realisation two months ago after I was invited to present at the ‘Corporate Travel and Technology World’ conference in Shanghai. The topic, “Selecting Potential Leaders and Turning a Company from Good to Great”, was provided some months earlier, giving me plenty of time to source opinions from around China. However, from the beginning of my research I realised that the title was a misnomer. From Beijing to Hong Kong, the opinion was (and still is) the same. Being able to ‘select’ a candidate is a luxury. In today’s war for talent the demand is far greater than the supply.

For years, this war has consumed entire HR departments and made recruitment firms wealthy. In the meantime salaries have doubled and even trebled as staff bounce up the pay scale, playing one company against another. Through all this, management's hands have been tied. This conflict has been a necessary evil, as multinational headquarters realised that management of China-based offices and factories has to be done locally. Leading China strategy from the boardroom in Frankfurt, London, or New York is nearly impossible. Yet, still the war continues - companies remain desperate to grow headcount and localise executive roles. However as a result of my research, I believe there may be a chance to bring things to a peaceful end at last.

This war, like the one currently being fought over oil, is driven by a narrow-minded mentality that causes us to focus on the ‘limited' resources, rather than generating alternative options. Dr. Michael Hewitt-Gleeson calls this narrow-mindedness, CVS. During his recent ‘X10 Thinking' tour of China, Hewitt-Gleeson emphasised the need to move from a ‘Current View of the Situation' (CVS) to a ‘Better View of the Situation' (BVS). CVS is how we see the world, the people, the challenges, and the opportunities that surround us. BVS is the potential, positive future that arises when we move away from our myopic way of thinking. "More often than not," says Hewitt-Gleeson, "we choose a future that matches our past." The power of BVS is that it allows us to "change the future".

Current View of the Situation

So what is the CVS in the war for talent today? The CVS states that there is a talent shortage and in order to get the best talent, we must wage war against our competitors. We can do this by:

1. Offering more money than our competitors

2. Engaging in employment marketing

3. Winning HR awards

4. Becoming more efficient in finding talent

Offering more money (option one) is unattractive to most employers, but widely used nonetheless. Unfortunately, when companies engage in salary battles with their competitors, the only winner is the employee.

Employment marketing, used by armed forces around the world, involves making your company more attractive to potential employees. This approach is growing in popularity across China and can provide an excellent way to differentiate your brand and communicate your Employment Value Proposition (EVP) to potential hires. The downside to it is the considerable investment in advertising campaigns. Some companies, like GE and Shell, combine both employment and consumer marketing into the same advertising campaign. Both companies currently employ an eco-friendly image, which is intended to attract both contracts and resumes into the relevant departments' inboxes.

Winning a HR award, such as the China Staff's HR Award, CRF's Top Employer Award, or Hewitt's Best Employer Award is another way to attract top talent. Award-winning companies become attractive to their competitor's employees, reducing the need for recruitment advertising and requisite industry training.

Current View of the Situation

The final method in today's recruitment CVS is improving the efficiency of finding talent. In the USA, more than 80% of companies use recruitment tools such as PageUp People, TalentNet, or SAP's ERP HCM system. Yet in China, less than 10% of companies utilise this technology. These powerful recruitment systems allow for faster ‘onboard' time, and minimise costs for companies with a large staff turnover.

Better View of the Situation

If all of the above are CVS, how do we ‘switch' to a BVS? Edward deBono, Hewitt-Gleeson's former colleague, believes that escaping from our point of view is one of the most difficult things for people to do. We need only be reminded of sixteenth century Europe to appreciate this challenge. Back then it was easier to burn heretics at the stake than to entertain the idea that the world could be round.

However, when CVS to BVS (CVS2BVS) is employed, it can be life changing. Take for example Jack Welch, former President of General Electric, who created a BVS to solve a personal staffing problem. As GE president, he was constantly being asked to meet with other presidents from vendor and customer organisations. As a result he was being worked to the bone, flying around the world. "How can I multiply myself by ten," he asked himself aloud while in front of Hewitt-Gleeson. He answered this question seconds later, "Give all your senior department managers the title of President!" That's CVS2BVS!

Calling a Ceasefire

So with this approach in mind, what is the BVS that can stop this war for talent? After all, a 2006 report by staffing industry leader Manpower stated that "it will take six to eight years before graduates gain sufficient work experience to ease the current competition for mid-level senior managers." This opinion was mirrored the same year in a study by China's National Bureau of Statistics, which highlighted the gap between the United States and China in tems of university degrees, stressing that only 5.2% (approximately 63 million) of the Chinese population had a degree, compared to roughly 25% (approximately 75 million) in the US.

In a nutshell, our solution involves creating industry associations, where companies within the same industry act as a collective to educate staff on industry specific skills. In this way, while employees may change jobs, they ultimately remain within the industry, and thus continue to develop industry specific skills. The industry as a whole can then take advantage of this talent pool. The employees in this pool will be far less likely to cross over to other industries.

One working example which is backed heavily by companies in the same industry, is the Australian Pharmaceutical Manufacturer Association (APMA). Made up of multinational pharmaceutical companies, the APMA ensures that once an employee begins with one of its members, they achieve competency in the industry via a ‘Continuing Education Program' (CEP), co-ordinated by Monash University in Melbourne. As the program takes 3 years to complete and must be initiated within 3 months of joining a member company, the CEP doubles as both an incentive for staff to remain working for an APMA member company, and also to remain within the industry. Consequently, the pool of potential candidates for pharmaceutical firms remains high, even when other industries are suffering. I know this first hand because I studied the CEP, and should I ever return to Australia, working in the pharmaceutical industry would be my first choice given my industry developed skills.