KEY POINTS:
If you think it's hard work retaining staff in New Zealand, you should try managing a team in China. Hanging on to staff there is bare knuckle stuff; companies are giving talented people 50 per cent wage rises a couple of times a year just to keep them, says Guo Xin, managing director of Greater China and deputy head of Asia Pacific for Mercer Human Resources consulting.
"In a sense, China, for the most part, is raw capitalism," said the worldwide partner for Mercer.
And pay is not the only perk; companies have to be truly creative about the packages they offer.
China is advanced in terms of talent attraction and retention.
Guo Xin said: "You have to be creative, otherwise you will be obsolete."
Speaking this week at the Human Resources Institute of New Zealand annual conference, he said HR departments would be playing a bigger role in the strategic direction of companies as they tackled the challenge of finding the right people.
"To quote Bill Gates: 'There just aren't as many graduates with a computer science background. That creates a dilemma for us in terms of how we get our work done'," said Guo Xin.
HR departments should be managing the direction of retention and they had some educating to do with their own management.
"Companies are gradually beginning to realise the importance of HR and are involving them in making all the key business moves like strategic decisions and budget planning," Guo Xin said.
In China, the HR director would not be on the board but would be part of the senior operations team.
Management would be looking to their HR departments for a number of skills.
"HR now has to effectively manage the cost of benefit programmes and find ways to balance employees' needs and business considerations," said Guo Xin.
"[They] have to be creative and take into consideration the complexity of designing benefit projects and flexible work hours."
New Zealand management would do well to look at the situation in China.
Competition for good people in China was hot, hotter than anywhere else in the world, and HR departments could not afford to sit still waiting for things to happen.
"In China, the job turnover for people with engineering skills is 80 per cent. Many change jobs every year."
And money alone was not going to convince them to stay.
"Outdated solutions can be costly in terms of retaining staff," Guo Xin said.
"Mercer worked with one company which thought their work force would be motivated solely by cash.
"But a thorough study found that the approach was 10 years out of date. The workers were moving into their forties and cared more about pensions and health benefits."
Of course, you have to be a worthy employee to be treated well.
A Princeton degree will not necessarily get you a better deal at work and graduating from a good school will not make or break the deal. Guo Xin said good work experience was the key differentiator.
Attracting and retaining staff required a different pitch.
Mercer was increasingly being brought in to help companies with recruitment assessment.
"But only leading companies are beginning to pay more attention, it's not prevalent," he said.
In the United States, multinational companies were being creative at putting together programmes appealing to employees' needs.
Smart companies would look over their employee population, see what they needed, based on the changing environment and ageing population, and offer them things that would help soothe their anxieties.
Even if their work environment was pretty good, people did not stay in jobs for years in China.
Their move to the next job was, to a certain extent, driven by money. They mainly wanted salary increases for the status. They were, after all, human beings. "These people are not going, 'Okay, I've made enough'."
The Chinese did, however, share a global desire for more leisure time, with increasing talk about a work-life balance.
"Because the market is growing too fast, the demand is strong. You get a lot of people who have to work overtime to keep up because the employer could not find [the staff]," Guo Xin said.
The fierce demand for talent in the huge country was perhaps so aggressive because it was happening on such a large scale.
"There are a lot of big companies in China. There are a lot of people, so there are a lot of big companies and they are getting bigger and bigger, growing 20 per cent to 30 per cent a year."
Countries such as India shared some of the growth traits of China - a matter Guo Xin had noticed in his work with Indian colleagues. "There's a similar appetite."
China had taken a leaf out of the American book and was experimenting with internships.
Its internships were paid and the system appeared to be working well for the Chinese.
Guo Xin said giving someone an internship was a good way for companies to assess an employee.
A lot of people did them so they could learn and observe, while the employer had the opportunity to find out how good they were.
However, internships were not of a fixed nature with interns coming and going as was necessary.
Guo Xin said companies should employ lateral thinking and look at creative ways of keeping staff happy to find out what worked for them.
"Solutions need to be tailored to your company and your staff's needs. You must lead - not follow. Other businesses' innovation may be entirely irrelevant," he said.
* Gill South is a freelance business writer based in Auckland
Work in progress
* "Only 16 per cent of CFOs say they have anything more than a moderate understanding of the return on human capital investments." Source: CFO Research Services & Mercer HR Consulting
* 46 per cent of CEOs identify high labour costs as the greatest barrier to growth in developed markets. Source: EIU 2007 CEO Briefing
* While engaging staff is growing increasingly vital, Gallup Research shows just 29 per cent of employees are actively engaged.
