What Scarce Labor Means for Talent Development in China

A look at what best practices attract the best talent

Jennifer Lawrence

A China-based human resources (HR) director for a leading US multinational corporation (MNC) recently lamented, “We recruited for a regional sales director based in Shanghai, selected four candidates as finalists, and scheduled interviews. None of the finalists showed up to interview, because they had already received job offers from other companies.”

Sound familiar? Virtually all companies operating in China are plagued by significant labor scarcity in their professional and managerial ranks. And this is not a new problem. According to the US-China Business Council’s (USCBC) annual member company survey, talent management has ranked among the top five challenges every year for the eight years this survey has been conducted, with turnover an acute constraint, especially among middle managers and the emerging leaders talent pool known as “high potentials” (or Hi-Po’s).

Where labor is a scarce resource, utilizing best practices to nurture talent can greatly impact talent development’s “3R’s” of Recruitment, Retention, and Readiness. Cambridge Corporate Training, a USCBC member company, recently interviewed Asia-based senior HR professionals at 21 leading multinational companies to discover these best practices. Interviewees were asked:

1. Given the relative scarcity of professional and managerial expertise in the region, what talent development approaches are working well?
2. And, specifically, which best practices can be replicated successfully among MNC’s in China?

Based on the research findings, four distinct approaches to developing talent at MNC’s in China emerged as best practices. Implemented in harmony, these four practices can help to improve outcomes for the 3R’s of talent development.

Best Practice #1: Practicality

Leadership development activities should be simple and easy to implement without extensive logistical preparations, especially when convening participants across the organization. One talent development executive remarked, “We try to choose programs that are feasible to repeat, since managers will tell coworkers about programs that are useful. Then colleagues will want to take the same program, and they will thank us for continuing to offer it.”

Repeating a good program encourages participation, since word-of-mouth helps to promote the initiative internally. However, talent development activities must be sufficiently flexible to adjust to changing corporate priorities and market conditions. Continuity is important to ensure a talent development program’s impact, so arranging activities that easily fit busy schedules is a must.  Practicality is a smart practice because it reminds managers that talent development activities need not be complicated or time-consuming to provide effective results.

A US-based MNC initiated an “executive roundtable” to provide a forum in China for headquarters executives to share learning and insights, as well as test out potential corporate and regional strategies with senior managers. A group of 30 to 40 China-based leaders are invited to join the roundtable each year, and a calendar is laid out with the names of top global executives who take turns speaking to the group in two-hour sessions that take place one or two times per quarter. Each global executive is thus invited once a year, making attendance feasible and appealing. Regional leaders sign up to “host” each session and introduce the individual to the group. The executive roundtable works well because it is practical to implement and sustain: It delivers a high degree of shared learning and individual exposure to senior leaders in relatively small, discrete chunks of time, on a regular schedule. The model encourages continuing commitment to the group, which in turn provides a visible forum to develop the heightened business acumen and strategic thinking rising leaders need to demonstrate their readiness to take on global roles in the company.

Best Practice #2: Partnership

Experienced human resource professionals know that successful talent development initiatives require executive commitment combined with employee engagement. HR professionals who leverage their company networks for committed sponsors who will support, participate in, and promote talent development programs, demonstrate another best practice: partnership. By involving as many interested executives as possible, an MNC’s senior team communicates shared dedication to developing the company’s leadership bench. According to one vice president of HR based in Shanghai for a US MNC, “We expect our senior leaders to be engaged in doing this. Everyone is part of talent development.” Partnership is a smart talent development practice because it both builds capacity and deepens engagement, factors that directly contribute to increased managerial retention and readiness.

A US-based MNC developed an in-depth program to prepare high-potential managers across Asia for expanding responsibilities and increasingly senior roles.  Called “Path to Leadership,” the structured program includes two Hi-Po cohorts who gather twice annually for two years, in order to develop and build skills to more effectively “manage yourself, manage your priorities, manage your team.” The Asia senior leadership team owns the process of selecting Hi-Po cohorts and creating materials to instruct them. In addition, senior leaders champion the program and help deliver the training, led in equal measure by internal executives and external experts. The Hi-Po cohorts learn important lessons, not only by absorbing training content, but by interacting with senior executives who emphasize the program’s purpose—to retain and ready the company’s future leaders for extensive opportunities across Asia. Additionally, the program helps to brand this MNC as an appealing place to develop a long-term career, thus indirectly supporting Hi-Po recruitment as well.

Best Practice #3: Personalization

While it is tempting to consider entire groups of talent as one cohort, all requiring the same opportunities and activities, each manager brings a unique set of experiences and skills to a leadership role. For this reason, an essential best practice for talent development is personalization. Talent development professionals can most effectively support senior executives, middle managers, and Hi-Po’s by asking them what they need to accelerate professional development; assessing individual requests to determine which are most productive and practical to fulfill; and working collaboratively with managers to customize these talent development activities. The personalization approach entails a concerted focus on listening actively and asking open-ended questions of individuals before implementing a program or activity. Perhaps equally important, encouraging self-directed talent development plans provides managers an opportunity to practice flexing their leadership skills. According to an HR executive at one US MNC operating in China, “We expect our employees to take ownership and request resources. Our view is that each person’s comparative advantage is different, so they might need different resources for professional development.”

At an MNC with a diverse grouping of country presidents (CPs) across Asia, headquarters executives required increasingly ambitious strategic plans from each CP. For that company, however, the processes that CPs had been using to generate strategies for individual markets were no longer sufficient. A subset of these CPs then requested a “Master Class on Strategy” to expand their thinking about how to develop strategic plans and share the planning process with their country teams. The area’s talent development leader listened carefully to the CPs’ learning goals and criteria and, collaborating with external expertise, devised a two-day strategy workshop followed by individual coaching to maximize impact. Shaping, attending, and replicating the strategy workshop contributed directly to building leadership readiness for the CPs and their teams across the region.

Best Practice #4: Plan

Devising and executing a broad array of talent development programs requires strong project management and team coordination skills. Companies that have incorporated planning and assessment steps into each talent development activity generally report strongly positive results.  Setting and assessing objectives for talent development activities enables stakeholders to determine what works most effectively, to demonstrate engagement and impact, and to adjust activities where needed for improved results. As an experienced professional operating in China remarked, “We have moved from inconsistent, unstructured to more consistent, more structured talent development.” Committing a budget and setting timelines, deliverables, and metrics for a specific talent development program helps ensure its implementation—and decreases the likelihood that talent development funding and management schedules will be reallocated for other corporate initiatives. Executive sponsorship and budget support are easier to obtain when talent development programs are cohesive and clear.

A leading European MNC requires all managers to complete a one-day workshop on “Managing Hi-Po Talent” before conducting performance assessments for their teams. After the performance assessments are completed, managers are assessed on the quality of the talent development conversations and objectives that they set for their direct reports who are tagged as high potential talent. The results are tracked to assess Hi-Po retention, engagement, and performance, and managers are evaluated on these metrics. One director who leads this type of initiative at her company reported, “We track the statistics, so we know that our retention is better than industry competitors.”

The four P’s in practice

Multinational companies in China seek practices that work most effectively to develop talent, given an operating environment in which professional and managerial expertise continues to be a valuable commodtiy. Four themes emerge clearly:

• Practicality: Are initiatives feasible to implement? Can iterative adjustments in activities be made easily to ensure continued employee engagement?
• Partnership: How deeply are executives committed to developing talent, and how do they demonstrate this involvement? How engaged are employees with the talent development process and associated programming?
• Personalization: Are employees encouraged to take individual initiative for their professional development? Can programs and activities be customized to meet specific employee requests that further business objectives?
• Plan: How robust is executive sponsorship? Do budgets and timelines support stated talent development objectives? What assessment mechanisms are in place to ensure impact?

Together, these best practices can positively impact a company’s ability to recruit, retain, and ready its executive leadership. Having a well-detailed talent development process in place is essential to support ambitious business objectives in a challenging environment for professional and managerial expertise.

[author] Jennifer Lawrence ([email protected]) is president of Cambridge Corporate Training, a USCBC member company that provides advanced business education for professionals across Asia. [/author]

(Photo by David Tan via Flickr)