Of the 862 employees surveyed for Employee Retention in China, 2006 - 2007, 25 percent had already had three or more jobs in their career. Twenty percent of those surveyed expected to leave their positions in the next year.
"Turnover in China continues to be a problem," says Rich Wellins, senior vice president of DDI. "There doesn't seem to be an end in sight."
Of the 215 human resource professionals surveyed, 38 percent say that turnover has increased in the last 12 to 18 months. Most employees are not expected to stay at the company more than two years.
"Job hopping has become a culture for Chinese workers," Wellins says.
High-level leaders indicated that they were the most likely - not the least likely - to leave their organizations within the next year. Survey data revealed that leaders felt less loyalty to their companies and were less likely to continue to work at their current organizations over the next five years. They also were less likely to feel that they had a good manager, great company leadership, or a creative or fun place to work.
"There are definitely enough people in the workforce, but there is a shortage of skilled people, especially at the leadership level," Wellins says. "The growth of the economy in China is outpacing the growth of skilled talent. I don't see this trend changing in the next five to eight years."
The report also shed some light on why employees stay or leave, and what organizations can do to stop talent from walking out the door. The survey finds a huge disconnect between employees and HR professionals about the reasons why employees leave the workplace.
Both employees and HR professionals agree that lack of growth and developmental opportunities and the availability of better career opportunities elsewhere are the two major reasons why employees leave.
In addition, both groups ranked insufficient compensation third. HR professionals reported that because of regional salary differences between China's coastal and inland cities, competitors offer higher salaries in an effort to lure employees to their companies.
However, employees and HR professionals couldn't agree on some of the other major drivers for leaving. HR overlooked the importance of interesting work, placing it 14th on a list of retention drivers while employees ranked it fourth on the list. On the other hand, only 6 percent of employees cited a poor relationship with their manager as a reason for leaving compared to 39 percent of HR professionals.
Three of the top four retention drivers are directly related to leadership. Employees are more likely to stay with an organization if they have a good manager or boss, were recognized for individual contributions, and had great company leadership.
"This just shows that organizations are in a position to temper that turnover," Wellins says. "I believe these factors or drivers are the same in any other workforce in the world."
DDI and SHRM recommend the following actions to curb the turnover problem in China.
Select the right people. Ensuring that candidates are the right fit for the job, the organization, and the leader reduces the probability of employee dissatisfaction after being hired. In addition to evaluating candidates' skills, experience, and knowledge, organizations need to take steps to understand candidates' expectations and match them with what the organization can reasonably provide.
Improve managers' leadership skills. In this study, having a good manager was more important to employee retention than any other single work factor. Skills such as handling poor performance or conflict are essential for new and experienced managers if they are to be effective leaders.
Examine retention factors more closely. Outsourcing exit interviews to neutral third parties can help uncover employee dissatisfaction that is not in personnel records or apparent to observers. Scheduling regular discussions with current employees and using surveys and interviews will help organizations understand the issues and meet employee expectations before it's too late.
Don't take higher-level employees for granted. Turnover of key managers can be among an organization's most expensive and disruptive situations. Unfortunately, higher-level leaders - highly pursued and less committed than other employees - are exceptionally vulnerable to poaching in China. Focused efforts on understanding and meeting the needs of these key employees should be high priorities.
Use the most effective retention methods, not the most popular. Organizations are trying a wide range of retention methods, but frequency of use doesn't always produce the greatest value. Targeted retention objectives and programs, including career planning services, should be used more often. At the same time, organizations should reevaluate their investments in less valuable approaches, such as team building and nonfinancial rewards.
Don't stop with compensation. Although it's important for organizations to remain competitive with rapidly rising salaries, compensation was much less of a retention driver than intangible factors such as having opportunities for accomplishment, being recognized for individual contributions, and having a good manager. Organizations should focus most of their resources on employees' primary retention drivers, including opportunities for development and advancement.
Focus retention strategies on your unique situation. To deal with turnover effectively, organizations need a precise understanding of employees' expectations and what matters most to them personally. The right retention strategy is the one that best fits each organization's circumstances and the nature of its employees.