Employee Retention in China

A 2007 SHRM study of Employee Retention in China found very high turnover challenges in China, with turnover rates among Chinese managers more than 25% greater than the global average and 30-40% of senior managers at multinational organizations changing jobs every year. And trends show the rate only increasing. “Leaders” especially felt less loyal to the company and said they were less likely to still be working for their company in five years.

Considering the ever-increasing importance of China – both as a producer of goods and services in multinational organizations and as a consumer of international goods – these figures are concerning at many levels. Finding qualified leaders and managers is difficult enough. According to this report, encouraging them to stay and remain committed to the organization is nearly impossible.

So what were the reasons cited for employee turnover? Out of the top 10 reasons cited, insufficient rewards and recognition was fifth and unappreciated efforts was seventh. When combined, these concerns over recognition and appreciation rise to third place behind lack of opportunity to grow and better opportunities elsewhere. Interestingly, poor fit with organizational culture ranked ninth.

Employee retention drivers mirrored these findings. Out of the top 10 work characteristics cited for why employees stay, recognition for individual contributions was third, a creative or fun workplace culture was fifth, and an organization you are proud to work for was ninth.

Just as everywhere else in the world, getting recognition right is critical to business success in China. Only when employee recognition programs are implemented strategically can companies begin to evaluate their success and positively impact these abysmal retention rates.