Foreign firms need to retain the brightest and best

Major foreign companies need to work harder to hang on to Chinese staff as the business environment becomes more competitive. Retaining talented employees is crucial if an enterprise wants to grow here.

Hao Jie, executive deputy general manager of Beijing Foreign Enterprise Human Resources Service Co Ltd, or FESCO, has questioned the working practices of some Western multinationals when it comes to handling local workers.

"Chinese staff should be regarded as core elements in a multinational company. They should have equal status to Western workers, with the same rights to make crucial decisions," Hao said, adding that FESCO has helped provide staff to 20,000 companies globally. "It's important not to forget that people are the most important assets in a company."

The employment sector in China has changed dramatically in the past few years. Enticing and then retaining highly qualified staff has become a top priority. "Businesses are constantly on the look out for talented individuals, and job hopping has become more frequent," Hao said.

But it was not always like this. When foreign companies started to flourish in China 30 years ago, they attracted the cream of the country's talent because of their open corporate culture, environment and reputation.

Yet State-owned and private enterprises have become increasingly popular with Chinese staff looking to take their careers to the next level.

Salaries can be up to three times higher when switching from Western multinationals. There are also greater opportunities to climb the corporate ladder.

"More State-owned enterprises and private companies are going global," Hao said. "They are enjoying a higher social status after moving onto the international stage. This is changing the landscape when it comes to hiring."

Chinese Internet companies, such as the BAT group, an acronym for Baidu Inc, Alibaba Group Holding Ltd and Tencent Holdings Ltd, are the favorite destinations for experienced staff with a background in Western multinationals here or abroad.

Lavish benefits and generous compensation packages are hard to resist, while career development is another major draw card. "But attracting talented people with higher salaries cannot be a permanent solution," Hao said. "This ends up producing a brain drain in certain industries and triggers a vicious circle, which is difficult to break."

To combat this, Western multinationals need to change their employment structure and incentives. They need top Chinese staff, with exceptional knowledge of market trends and local culture, if they are to be successful here.

To retain this pool of talent, they must open up career opportunities, so Chinese staff can progress at the same pace as their Western colleagues.

"The only way for multinationals to pursue long-term growth strategies is to retain local managerial staff and help them progress through the organization," Hao said.

"Giving local talent the same career choices as Western colleagues is the most cost-effective way of dealing with the problems of staffing," Hao said. "They need to retain the brightest and the best."

Contact the writer at zhengxin@chinadaily.com.cn