How to Use Training as a Staff Retention Tool
By Drew Ross
In western countries, many companies already see that offering comprehensive training programmes to their staff is an effective way of retaining their employees. In China, however, where staff retention is such a major issue, many companies attempt to keep staff by throwing more money at them when, in many cases, competitors match these packages, thereby creating only a short-term solution.
The added value in using training and development is proven and clear. Training creates an increase in attendance, company loyalty, innovation, skills, and productivity. Ongoing training as part of a general, employee-focused culture - one that values and responds to the needs of the employee - will help to create a strong, loyal workforce, that has no desire to move onto ‘greener pastures’ or the next big thing.
The Issues
Research undertaken in 2007 by Development Dimensions International (DDI) showed that Chinese companies saw a considerable increase in professional and support staff turnover in the years 2006 and 2007.
The employees surveyed cited two main reasons for changing jobs: lack of growth and development opportunities with their current employer and the perception of having better career opportunities elsewhere.
In further research, according to the International Workplace Survey conducted by recruitment specialists Robert Half International in 2007, 73% of employers globally believe training is the best way to boost staff retention.
Bearing in mind that the cost of replacing staff is 25-50% of the employee’s annual salary, it is essential that companies here find a solution to a problem that is only going to become more evident as China continues to develop.
The Solution
It is clear, then, that development opportunities are an important factor in retaining staff.
Recently, we assisted one of China’s leading banks to implement an employee-training programme in the run-up to the Olympics. They took our advice and tailored the training to the needs of the individuals’ own personal and professional goals, whilst tying it into the needs of the organisation as a whole.
In this instance, the company took the option of tying their staff into new contracts. If an employee left the company within two years of completing the training programme, they would be required to pay back either all, or a percentage, of the training cost. Whilst this does seem a hard line to take, it was effective. Employees had no hesitation in participating in the training programme. They felt empowered and saw the training as an excellent opportunity to improve their skills. In combination with a decent remuneration package and results-led bonus schemes, the employees had no reason to jump ship.
Employers must begin to grasp the value of training in this volatile job market. Successful companies that retain their staff will be those who are seen to be offering the best working experience – security, development and personal growth. There are many training options - everything from basic English language skills, through Time Management to tailored Leadership Development programmes for the most promising staff members. At whatever level the employee is at, training will make them feel valued and empowered and see themselves as part of a company that cares about its staff.
Yaxley Education provides tailored training solutions to companies in China looking to achieve more from their employees. We pride ourselves on our deep understanding of our clients’ industry, company and training requirements.
Drew Ross, Managing Director, Yaxley Education
September 18th, 2008 at 12:22 am
This is way off topic, but it might interest readers: the US Dept. of Commerce is soon sponsoring a webinar on the sustainable rebuilding of Sichuan schools. Should be an interesting perspective.
http://www.buyusa.gov/asianow/chinaearthquakerelief.html
September 19th, 2008 at 5:50 pm
Hi, first of all, I fully agree that training is key to the success of a company in resource and talent development, productivity and efficiency improvement.
However, linking training to employee retention may be relevent in the context of the Western management culture, I may differ when applying the same concept to Chinese management culture.
Taking the example and statistics used in the article.
(1) “….cited two main reasons for changing jobs: lack of growth and development opportunities with their current employer and the perception of having better career opportunities elsewhere…” The link to lack of traiing is not obvious here, and are these worldwide survey or China employee survey?
(2) “….the International Workplace Survey conducted by recruitment specialists Robert Half International in 2007, 73% of employers globally believe training is the best way to boost staff retention.”. Are these statistics applicable to China as the scope is this article?
My point here is, it is dangerous to apply the western concept wholely without considering the cultural sensitivity.
Let me give you an example. Is training the responsibility of the manager or the employee? In USA company, it may be the employee (as I am trained), but in China company, it may be the Manager. Asking for training by employee may not reflect well in his/her capability and workload capacity.
I hope the article is not a promotion of training services, but a true annlysis what is suitable for China market and business culture environment.
September 20th, 2008 at 3:22 am
The underlying issue, not openly mentioned here, which makes Mainland China training / retention different, is that China employers view training as a risky exercise. Give your employees too much knowledge, and they will up and leave to the next career opportunity, maybe at your competitor, or even set up shop as a new competitor to you. This fear of training employees is not just paranoia, just ask any China employer - they will all tell you about key people in their firm “running away” after getting just a little more knowledge.
September 23rd, 2008 at 1:24 am
The writer does discuss that Chinese employees do ‘jump ship’ or run away and that training can be a valuable way to lock people into their contracts. He suggests that getting employees to sign into an agreement that they will be required to pay back their training fee. My company used this technique for our small team of ten engineers six months ago and I have not lost any employees as yet (apart from the one engineer who did not want to sign up for the training!). I am not sure how enforceable these agreements are, but it has worked (so far) in my instance.
September 23rd, 2008 at 4:51 pm
Training as well as a good work office environment and a career development plan are key to retain high potential employees.
Those three elements need to be together in order to achieve a high retention level.Putting all together, at the end of the day will give both the professional and the employer many more benefits compared with the catastrophic effect of high turn over.
As a Global Sourcing professional, i have visited and audited many companies around the world. I can tell that lack of training creates a demotivating environment, unskillful employees are more likely to be poor performers and the profitability of the company can end up being compromised.
With high retention you save money by promoting internal candidates, instead of relocating or paying more money when it’s already an emergency to outside candidates, who come eventually to put out the fires.
Other benefits for the professional are:
1) Long term career path within the same company
2) Highly motivated teams
3) Better performance, since employee is not worried job hunting or just doing the minimum to keep up with the pace.
4) Opportunity to escalate within the organizational ladder
5) Plenty of intangible benefits that boost loyalty.
In summary, do not neglect investing for the best.
Your work assets.
Regards to all,
Oscar Leon Chong
September 23rd, 2008 at 4:54 pm
I meant to say: Your human assets.
September 27th, 2008 at 4:53 am
# George Says:
QUOTE
Give your employees too much knowledge, and they will up and leave to the next career opportunity, maybe at your competitor, or even set up shop as a new competitor to you.
UNQUOTE
That is fact of business life in China, in a nutshell.
You could not get loyalty from a German at a Chinese company in Germany, if the foreign managers come and go every 2-3 years.
Loyalty is something personal, person to person, that needs time to grow. That is the the same here as it is everywhere else.
The notion that loyalty should exist by identification with the company or trademark and could be achieved by training is outright ludicrous.
September 28th, 2008 at 5:25 am
I agree, Thomas, that loyalty is something personal but I completely disagree that this cannot be achieved through training in China. I work in HR department for large multination European company and, through comprehensive training programs along with building the image of our brand in China, we have a much higher rate of staff retention and staff loyal. Chinese are driven by brands. Chinese employees see companies as ‘brands’ to work for that give them face and status. Training complements the brand amongst employees and gives them status.
Training is what can create the personal connection between all levels of staff in a company. A training program my company did, for example, help employees bond and get to know each other. This made employees feel connected and bonded to company. It certainly works for large and mid-sized companies in my experience, however I’m not sure about smaller companies.
Michelle Song
October 1st, 2008 at 2:31 am
Congratulaions to your success, you surely worked hard for your achievement.
Yes, Chinese do appreciate brand and status of their current company, but more than often this is because it increases their re-sale value to other companies. Likewise, a high level of training has caused a number of Chinese competitors engaging in aggressive poaching of staff from us.
I have also experienced a recent surge in “loyalty”, because the labour market got swamped with a large number of new, top educated young graduates, many of them from the countryside with less lofty aspirations than the big city folks, all of whom are now competing for jobs. Older staff now cling on to their jobs.
I guess the right mix is long term management commitment, a benevolent (not naive) employer, seniority perks and the balance of terror on the labour market.
October 7th, 2008 at 1:22 pm
Thomas, there’s no need to ridicule me just because I am happy with what I have achieved in my career. Obviously you not very satisfied with your own career achievements.
Anyway, I think you have agreed with my point. A ‘long term management commitment’ relies heavily on training. Which was my simple, non-confrontational statement in first instance.
I’m very glad that your staff stay with your company out of terror. That’s the best way to know if your staff are happy and valued by the leaders of the company. Good luck with the method you manage your HR.
October 8th, 2008 at 3:39 am
At Ace Wireless our focus has been on development of our employees both professionally and personally. Our employee rentention is 99.5% for over 2 years running. We have a “empolyee focused” environment that we work to encourage our team of 500 production employees to continue to learn through reading books from the company library, improve their English on breaks by using Rosetta Stone that is installed on all of their computers, and we throw sports competitions with prizes for the winners, and bring in development coaches every 3 months to encourage them to think outside the box. We have break rooms that encourage learning (internet cafe, library, brain teasers) and team building (Nintendo Wii, ping pong, board games). We work to meld the Western and Chinese culture to create our own corporate culture. We remodelled our employee dormatories and added air conditioners in all of the rooms to make life more comfortable so that our employees can get better nights sleep and can come into work refreshed. Our goal is to develop a team of employees that think outside the box and come up with ways to continue to improve the quality of our product, and output from our production lines. This environment encourages open communication between production lines workers and their managers which increases our ability to catch failures in the line and solve them quickly. Our average quality is 98.5% compared to the industry standard of our competitors in the US that is 97.5% and Chinese competitors that is at 89.5%. All of this has allowed our company to produce more and demand higher prices on our product.
If you would like to hear more please contact me and I can elaborate on the initiatives that we are working on in our facilities in China and worldwide.
Sincerely,
Jordan Sielaff