If you want to keep your employees around the world, only competing on pay won't retain them anymore
With preferences for working for Chinese domestic employers rising, Western corporations' need to sell candidates on careers, not pay, to win in China's war for talent. And in the recession's wake, companies need to reassess their competitive position in labor markets around the world.
The pending acquisition of Volvo by the Chinese carmaker Geely is one of many recent examples of the growing competitive strength of Chinese firms. But it isn't just Chinese product brands that are gaining on the competition—it is their employment brands as well.
Working for Western companies has long been as a status symbol in China. But a recent study by the Corporate Executive Board (CEB), reveals that multinational employers are facing unprecedented competition for business-critical talent in this vital growth market.
From 2008 to 2010, the percentage of China's labor-force participants preferring employment with a Chinese domestic employer almost quadrupled—rising from 9% to 33%. Meanwhile, the percentage preferring to work for a multinational employer held steady at 46%.
When competing for talent in China, an alarming number of Western companies may be caught flat-footed. Many assume their employment brands will always be "premium" brands or think they can simply pay their way out of any talent attraction problems.
In order to protect their talent advantage against the rise of domestic companies to attract and retain talent, Western companies in China must be competitive on pay, but center their employment value proposition on three core elements:
Sell career opportunities not just the job;
Differentiate the unique professional development opportunities afforded by your career paths;
Exemplify respect and ethics to signal organizational commitment to your employees.
And it's not only China where companies need to reassess their labor market competitiveness. The downturn altered the competitive landscape in labor markets around the world. In the U.S., for example, as candidates who got burned in the layoffs of the past few years seek stability, many companies are facing stiff competition from government employers for the first time ever. In fact, CEB's research on the Employment Value Proposition shows that stability increased from the 5th to 4th most important attribute for job seekers between 2006 and 2009. The tactics that are detailed above will help companies not only attract but also retain top talent globally.