Anyone with a business in China knows how difficult it is to retain high level Chinese employees. Rapidly rising salaries obviously factor into this difficulty, but according to Andrew Hupert at ChinaSolved, a China retention policy must consist of more than “just dumping cash, bonuses and big commission payouts on star employees.”
In his post, China Key-Person Retention Planning now a Strategic Battle, [link no longer exists] Hupert sets out what he calls “3 arrows in the quiver of China Key Man Retention strategy”:
1) High-end health care plans. Hupert calls for a family plan so that the spouse of your key employees “will get used to the convenience and prestige in a hurry — and thus become your advocate in the household.”
2) Pension plans that vest over 3-5 years. “There are many ways to structure a company retirement or long-term savings plan, but the key is vesting.” Set up your China company retirement plan so the longer your employee stays, the more portability he or she will have. Do not make the vesting period so long as to be unattractive to your employees or potential employees, but do not make it so short that you are doing little to stop the revolving door.
3) Company ownership and profit sharing. Hupert sees this as the “least valuable” of the three because if your company’s growth slows or reverses, it will not serve as much of an incentive to stay. It is nonetheless “a great idea for building long-term loyalty and motivation, but you will find it doesn’t help you much when you need help the most.”
All great advice.
Any other ideas?