The definition of ‘employee retention’ is the way a company can keep its employees. Keeping talented staff is very important for organizations and enterprises and can even be linked to maintaining a happy work environment and excellent production. If you pay competitive salary rates and offer loads of benefits alongside a healthy work-life balance, you will retain more of your best employees.
High staff turnovers in China are commonplace, especially among senior-level staff, office workers, and professional technicians. Not many skilled workers in China stay at one company for their entire careers. Employees leave their current companies for a multitude of reasons with relocation and career changes being the main two. Lack of satisfaction or getting tired of a certain working environment are also key reasons for leaving your current job.
Should Chinese Companies Have Concerns About Employee Retention?
All companies and enterprises should be concerned about not retaining their best employees. A higher staff turnover rate means something is not quite right. And the more competitive the job market, the harder companies need to work to retain their staff. China’s current restrictive population policies are a major cause of an aging workforce and the reason why it’s in a shrinking freefall.
Between 2011 and 2018, the working population in China aged from 16 to 59 years old shrunk by 2.8% to approximately 897.29 million. Studies from the National Bureau of Statistics have shown that by 2025, there will be over 300 million people in China that are above 60 years old.
The knock-on effect is already starting to be felt as Chinese companies are now in a war to retain and recruit talent. Having internal company policies that encourage employee retention strategies concerning keeping high-level management are now essential.
Creating Your Own Talent Retention Strategies
In order to reduce the turnover rate of employees, China companies need to increase their employee retention levels to remain competitive. A failure to do so can have massive negative ramifications going forward.
By creating a positive working environment that promotes engagement and employee appreciation, companies can encourage greater retention of talent in critical areas of their business. Other ways to encourage employees to stay at your company is by ensuring that your pay rates are competitive and that you offer benefits and a good work-life balance.
The vast majority of research on the subject shows that employees leave companies because they have problems with other team members, especially management. Low salaries, little to no growth, and a lack of motivation are all reasons why companies cannot retain talent.
Understanding the Total Compensation Model
If you already have top talent, using strategies that are aimed at retaining current employees is the sensible approach. Keeping the top talent that you already have is essential. And you can encourage retention by using ‘The Total Compensation Model’.
The concept of Total Compensation is where companies can combine enterprise culture, HR strategies, and corporation strategies that satisfy their current talent. And when used in tandem with excellent business growth, it garners confidence and gives employees reasons to stay.
Understanding the common dissatisfactions that employees have is the first port of call for Chinese companies looking to implement a Total Compensation model.
There are essentially four main reasons why talent decides to leave their current company. These key reasons are the breakdown of trust, companies failing to meet their expectations, a lack of job satisfaction, and a feeling of being undervalued. Companies can use total compensation concepts to offer internal and external benefits to employees to maximize the value that an employee can give a company. These add-ons include:
- Using external benefits that offer better salaries, bonuses, insurance, allowance, and stock equity.
- Using internal benefits that can balance a healthy work-life environment and give fulfillment, opportunities that create possible advancements, more training and development and even giving employees some company recognition.
Step-By-Step Guide for Employee Retention Strategies
Step 1 – Conducting Internal HR Audits
Companies need to get their HR managers to review their current documents, procedures, and policies to ensure that they are compliant with recent regulatory and legal standards so as to develop them and get them in line with a broader enterprise culture and HR goals.
Compiling a questionnaire that can gather information that is not already readily available is essential for gaining knowledge and insights that can be used to make a well-informed decision going forward. You can also use the info to find out any issues pertaining to employee dissatisfaction and any gaps in the company operations that can be rectified and improved.
Step 2 – Assessing Your Competitiveness
Finding out where you stand in comparison to your business competitors is essential to ensure you do not lose employees to other companies in your industry category. HR managers should find out the standard salary benchmarks in like-for-like roles across the industry to ensure their own are competitive.
Using this info to recognize your company’s strengths and why employees want to work for you is essential to identify. By doing this, you can attract more talented employees by giving them more access to benefits, competitive salaries, and other career advancement opportunities that they might not have in their current job.
Step 3 – Optimizing Roles for Individuals
After you have performed internal audits via HR, you can now analyze certain roles and positions in your current business structure. You can use this tactic to improve the job position in question which will help in securing better talents in the future. By optimizing these roles, you will encourage higher-quality employees that will get more rewards and benefit distribution than in their current positions at other companies.
Evaluating these positions can also measure the value of the job and how it sits in comparison to the current internal pay rates. Using this information to optimize the employee’s impact, innovation, knowledge, performance, and communication is a smart strategy.
Step 4 – Active Recognition
Last but not least, you need to ensure that a system is in place that actively recognizes the abilities and efforts of your employees. Because the job market is so volatile in China, using agile and varied performance criteria that balance traditional performance values while keeping at the forefront of achieving goals that can be adjustable is essential.
Employees need to be able to see a clear vision of the potential job progression and their salaries at each level to keep them motivated and happy. Management can also use this progression ladder to communicate and explain their job expectations in the role. This type of system can integrate a working relationship between both lower and higher level staff for a common goal.