From Cultures by Accident to Cultures by Design

When it comes to marketing, companies are prompt to adopt the rule of “thinking globally and acting locally”; but, in talent management, they tend to promote values and working styles of the company’s home country.

Nevertheless, despite ongoing efforts to encourage uniform productivity, process standards, management style, performance expectations, etc., a significant degree of misalignment occurs between organizational cultures in China and global agendas. Consequently, hybrid cultures emerge from cultures carried over by expatriates, cultural dynamics of local Chinese, and the divergent third-cultures of returnees and overseas Chinese. These cultures are very much “by accident” and not “by design”.

Specifically, reasons for the development of cultures by accident include:
• People management practices can remain defunct because other methods exist for management to increase shareholder value.
• A “come and go attitude” of expatriates. Expatriates’ job embeddedness is relatively low since their connections to the community and the local organization are weak.
• High attrition rates among senior managers and employees. As the majority of employees seem to be quite new to the organization, there is no one to pass along company values and socialize new hires into the established culture. Consequently, every individual applies their own set of values when working with internal and external stakeholders.
• An inability of HR to engage in the organization from a strategy perspective and design a system to develop a desired culture. The role of strategic partner is overshadowed by the role of administrative expert.
• Scarcity of talent precludes recruiters from assessing candidates’ values and whether a cultural fit exists.

Cultures in China will become by design and play an increasing role when the following changes occur:
• Companies will run out of options for bottom-line improvements. Cost effectiveness and quality standards become uniform and will no longer differentiate the company substantially from their competitors.
• The selection of expatriate candidates becomes more rigorous. The candidates will have the “right” skills, cultural attitudes, and a long-term intention to live there.
• Companies develop strategy to effectively retain leaders and ensure their high commitment levels.
• HR professionals learn tools to uncover organizational self-perception and develop skills in culture management and change management.
• With the growing number of qualified candidates, knowledge and skill sets quickly become redundant.

Do Not Apply

When advertising positions, companies attempt to prevent unqualified candidates from applying through setting different bars.

Recently, a position for the Head of Human Resources at an “established Foreign Bank, upholding its long tradition of providing value-added services for both institutional and private investors in the region” was advertised by a third-party recruiter.

The most interesting requirement was, "candidates currently earning less than RMB 700,000 do not apply."

Obviously, this point implies that the bank is seeking a professional:
• … with experience at an established and more bureaucratic company as opposed to a smaller and more entrepreneurial company. In most cases, younger and entrepreneurial companies are much less likely to offer high salaries.
• … who has worked for an international company as opposed to a local Chinese company. Again, international companies are more prone to pay higher salaries.
• … who is older as opposed to younger. Older professionals earn higher salaries than younger ones. Ogilvy's Matthew Anderson says successful executives earn 80 percent of their net worth after the age of 40.

One cannot resist thinking of other motives behind this restriction.
• First, the assumption that the more one earns, the more valuable and pivotal one is. Unfortunately, compensation is not always commensurate with contribution. Furthermore, compensation does not necessarily correspond to strengths and talents, especially in cultures in which leaders are promoted based on age and status.
• The bank follows the belief that one has to climb the career ladder step-by-step instead of leaping over steps.
• The bank yearns to attract a person who has the same role at another organization. The bank probably motivates, encourages, and rewards people performance mainly with money. Consequently, the organization seeks to hire people motivated by money more than intangible elements of EVP.
• The bank is “trying to kill two birds with a single shot”. Upon completion of the recruitment process, the bank owns benchmarking data on compensation packages among professionals with similar qualifications and experience at competitor organizations (within financial or professional services industry).

The only question remains, how likely is it that professionals earning RMB 700,000 will find this job offer since they tend to be passive candidates in China’s job market. An alignment of the medium and the message is inevitably critical.

All Talk

Over the past couple of days, I read several articles on “employee retention” in China based on research data with insight into why employees stay or leave.

In short, employees are simply looking for sound interpersonal relationships, a healthy organizational culture, a sense of contribution, and opportunities to learn and grow; all of which have been considered primary retention drivers (fair compensation is classified as a secondary retention driver).

One can assume that many companies in China under deliver on these factors because of the rising attrition rates and relatively short average tenure of employees (about two years) and leaders (between 1-2 years).

Even so, when providing recommendations to subdue the attrition problem in China, the authors advise to “select the right people”. Accordingly, the candidates should be the right fit to the job, the organization, and the leadership in order to increase retention.

Yes, this is a significant challenge to find talent that not only has the skills, experience, and knowledge, but also does not mind a poor relationship with his/her boss, weak leadership, lack of recognition for their contribution, growth opportunities, and dull work.

Birds and HR

"A bird in the hand is worth two in the bush" says an English proverb. In addition, the Polish adage goes like this: "Lepszy wrobel w garsci niz golab na dachu" (German equivalent: "Besser ein Spatz in der Hand, als eine Taube auf dem Dach"); literal meaning: "A sparrow in your hand is better than a pigeon on the roof".

In all three languages, this proverb relates to decision-making and risk-taking even though the English proverb suggests taking a chance for quantitative gain and the Polish and German proverb focuses on the qualitative win.

The current HR practice is just the opposite of the wisdom espoused in the proverb. It implies to see many candidates before hiring the “best”. So, the hiring decision is postponed until interviews are held with a handful of candidates. Even though HR will meet highly qualified candidates, it tends to continue the process by bringing in yet another candidate for an assessment and interview. Indeed, this entire process is a poor use of time and a gamble toward losing qualified candidates on-hand because HR is trying to secure better candidates (more qualified or less expensive, please decide on the one you prefer) though they may be out of reach anyway.

Thus, although well known and passed on from one generation to another, the “bird” proverb has been overruled by indecision in HR. Instead, an applied proverb would cause action once HR finds a suitable candidate. Just-in-Time HR instead of the typical 60-day recruitment cycle would be a real breakthrough.

Lastly, birds are indeed a good metaphor to help shape thinking in contemporary HR because of the way talent is flying around these days between employers as discussed in DDI’s article “Flight of Human Capital”; which I referred to in one of my earlier blog entries.