| The Rising Costs And Challenges Of Human Resources In China |
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About Janet CarmoskyJanet is a career China business specialist who brings China executional competency and strategic counsel to foreign invested businesses, and similarly advises Chinese government organizations on effective international communications and growth strategies. After earning a degree in Chinese studies from the University of Pennsylvania in 1985, Janet moved to Xi’an, married a Chinese man and spent the next 18 years - as Janet Zhang - living and doing business in China. During this time, spent mainly in Xi’an, Hong Kong, and Shanghai, with sabbaticals in Washington D.C. and Silicon Valley, she developed her extensive knowledge of China’s commercial landscape and the patterns of the US-China economic relationship. Fluent in Mandarin and Cantonese, she spent the 1980’s in trading, sourcing and buying agency projects before moving into strategy consulting with Coopers & Lybrand in Shanghai. Moving for the next 15 years between operations - mainly in China’s retail sector - and consulting, Janet held senior management positions in private equity (VP of Richina Capital), systems integration (COO, Web Connection/Chinadotcom Shanghai) and public relations (Director, Burson-Marsteller Shanghai) before moving back to the United States in 2003 to help integrate PR Newswire’s China operations into their USA base. She has written for Economist publications, authored an award-winning case for IMD and the Chinese language Harvard Business Review, and written essays for travel publisher Odyssey Guides. She speaks often - particularly to organizations new to the US-China business - on how to understand and align with, rather than struggle against, the cultural and economic forces that typically frustrate executives on both sides of the divide. Below please find a transcript of the podcast interview: Welcome back to the China Business Show, brought to you by Global Sources.com connecting global buyers and suppliers. Here is your host, Christine Lu.
CHRISTINE LU: As many as you have heard from many of our guests by now, the biggest challenges entrepreneurs and large companies often face in China are related to Human Resources. It’s getting harder to find good people. It’s just as difficult, in fact to retain them and it’s getting pretty expensive to do both. Joining us for this segment is our resident China Specialist, Janet Carmosky, President of China Prospects Inc. to give us the five minute breakdown on this issue. Janet, as always, welcome to the China Business Show.
JANET CARMOSKY: As always it’s great to be here, and I can’t wait to throw a bunch of facts, figures and data at people in the next five minutes.
CHRISTINE LU: Why is it so hard, Janet, to find good people in a country that has the largest population in the world? I don’t get it?
JANET CARMOSKY: Very simply - because the economic growth is so high and there is so much opportunity; and people are constantly wanting to hop jobs. It would be as if you or I or everyone in the United States were being given job offers by whoever was the competitor of where we were currently employed to increase salary, increase benefits; get a better title. The largest part of the work force for foreign invested business are only children. They are very aware of the fact that they are going to be the main bread winners for their parents, their grandparents, their only child and that they have a limited number of working years. So, they are going to be looking for the top dollar, the best training programs, the most impressive title; and the fastest track to the highest step on the ladder they can go. So, simply because people have so much opportunity.
CHRISTINE LU: It’s almost like a revolving door, I always say, where it is constantly moving. Sometimes you come across a Marketing Director who has only been there six months before they jump ship to the competitor. Its hard retraining people can you touch upon that? Why is it so hard retaining people for that reason? They are always on look out for the next bigger job title.
JANET CARMOSKY: There is that, and here is my ultimate insider tip - if you are operating a business in Beijing or Shanghai or a very sophisticated and expensive city. Your most stable staff are most likely to be people who were not born or raised in those big cities. If you find someone who has immigrated affectively to those big cities to seek there fortune and they are not going to go back to the countryside. Somebody from one of the cities from the interior who has come to the city to make it big and they have a greater appreciation for how lucky they are to have such a great opportunity, and they are going to be more willing to stick with your company and grow. Someone who has grown up with a lot of advantages, who has come from a family that is well to do, who has a lot of connections, who has an affluent home; is going to be looking at your firm, if you are a big foreign invested enterprise, the shortage ticket to an MBA, in the U.S. or graduate program. They are just going to be looking at your job, really quickly.
CHRISTINE LU: Right…
JANET CARMOSKY: So retention is a matter of really just continuing to give people a reason to stay. Better title, more training (training is very motivational). I think I have the turnover rates in China for a professional service firm is about 16% a year. So, you are going to lose one out of every seven of your staff and it can be higher then that in the middle management. Entry level people will stick around a little longer but if you just hire someone, as you said in marketing manager six months and then they can be gone. And there are so much people who are able to take responsibility and willing to take responsibility will be given an offer to lead a business smaller then yours.
CHRISTINE LU: With just under a minute left though, I’m having a hard time understanding why it’s getting so expensive?
JANET CARMOSKY: Yeah, I mean salary increases in China are 4-5 times inflation right now, people have rising expectations. Its really just that simple and you’ve got to get the executional challenge in China is coming more and more down to the level of finding people who are willing to work at an economically stable level, and it slows down and corrects.
CHRISTINE LU: In just under 30 seconds, can you tell us, are there companies that are doing it right? What are some companies doing right?
JANET CARMOSKY: I can’t tell you that in 30 seconds! (Laughing)
CHRISTINE LU: I know! (Laughing)
JANET CARMOSKY: But I can tell you to go to U-tube. (I’m going to be silly for a minute here) and PWC China there is a hilarious group dance by the Auditors, and I want all of us to think about what we can do to make our work place in China that much fun.
CHRISTINE LU: That sounds like a great plan. Janet, as always, thank you for joining us! If you’ve got a question for Janet, please feel free to visit check out thechinabusinessnetwork.com website and click on the “About Us” section. We’ll make sure to pass your question on to her. Thanks for joining us, I’m Christine Lu.
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Janet Carmosky shares insight on the growing human resource challenge companies face in recruiting, retaining and controlling costs in China.
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