HR Challenges and Solutions in China

This assignment delves into the significant human resource (HR) challenges plaguing Chinese companies. It examines factors contributing to these issues, such as rapid economic growth, changing demographics, and cultural differences. The assignment further explores potential solutions and best practices to address these challenges, focusing on talent acquisition, retention, performance management, and employee development strategies tailored for the Chinese business environment.

STRATEGIC HRM

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
QUESTION 2 ..................................................................................................................................1
Assessing the major HR challenges which is being faced by the companies operating in China
.....................................................................................................................................................1
Strategies for meeting the above mentioned problem ................................................................6
CONCLUSION ...............................................................................................................................8

ILLUSTRATION INDEX
Illustration 1: HR challenges in China.............................................................................................2
Illustration 2: Staff turnover reason in China..................................................................................4

INTRODUCTION
The practice and work of human resource (HR) has changed totally as now-a-days the
operations which are carried out by HR are viewed in a strategic way. In this context, earlier
manager of firm believes that the main role of HR is to handle and perform daily operation of the
firm effectively. But, the given thing has changed as in the present scenario manager of the firm
consider HR as one of the most important function of the enterprise (Afiouni, 2013). This is
because; it assists them in tasks of attaining tactical goals and objectives of the corporation in an
effectual way. In the present essay, question number two will be answered. In accordance with
the given context, the essay will provide detailed explanation regarding major HR challenges
which are faced by the companies operating their functions in China. Furthermore, the report will
also state the ways with the help of which significant measures will be taken by the manager of
China with an aim to overcome the HR challenges which are faced by them.
QUESTION 2
Assessing the major HR challenges which is being faced by the companies operating in China
There are many types of HR challenges explored which are being faced by the
organization who is operating their business in China. Among all, one of the most significant HR
challenges which are faced by the local and multinational firms in China is related to shortage of
talented and skilled employees. In accordance with the given context, it is identified that MNC's
in China are facing the respective problem. Here, they are witnessing difficulty in terms of
carrying out recruitment of highly talented and professional workers especially for the middle
level department. Here, the Jonathon Taylor which is the HR director of Coca Cola has said that
to find a good professional level talents in China is being consider as one of the most difficult
task (Armstrong, 2012). He had also added in his statement that the given problem is not only
restricted to only one industry, but it is the matter of concern for varied other industries which
are operating in the respective country. In addition to this, other HR managers of different
multinational firms have stated that they require specific type of talented employees in China. In
this regard, different characteristics of human resource are assessed which MNC's in China are
looking among its employees which they are going to recruit. For instance, the employees should
be young and must have good technical skill and should have the ability to work according to the
international management techniques (Azmi, 2010). In addition to the given attributes, the
corporations are also expecting that the employee should possess strong foreign language skills
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and must have the ability to think and work strategically. But in reality, firms are facing major
difficulties in finding the given type of employees (HR challenges in China, 2016).
The China has been facing the problem of talent shortages because of its traditional
education system. In this context, it is analyzed that Universities and schools operating in China
follows traditional way of delivering education. Here, these firms motivate their students for
achieving high marks or score in their academic career (Boselie and Paauwe, 2005). As a result
of it, many of the students in China lacks soft and hard skills which are needed to build their
career in local and international firms. In this regard, different areas are evaluated where most
severe talent shortages are seen. It consists of project management skills, sales, marketing,
leadership skills and specialized technical skills. For example, Chinese companies such as
Huawei and Haier are looking for the skilled and talented employees. The major skill shortages
problem is occurring within the top and middle level department.
The above given graph depict the condition of China in present as well of the future.
Here, from the above graph it can be interpreted that the availability of talent is the major issue
in China. Thus, for the nation it is necessary that it should take action towards the given problem.
This is because; if any step is not taken then the problem related to the unemployment may
2
Illustration 1: HR challenges in China
(Source :Chang and et.al., 2013)

become worse in the future (Cartwright, 2005). In addition to this, the problem of skill shortage
is occurring in China because of its tight labor market. In this context, it has been assessed that
the Chinese labor market is aging who lacks number of skills which are required to fill the
position of the senior level.
Furthermore, apart from the talent shortages, retaining employees within the firm for
longer period of time is regarded as another most critical HR issue being which is faced by the
Chinese firms. In this regard, it is assessed that Chinese companies are facing the problem of
high turnover rate. Here, there are some reasons identified which forces the Chinese workers to
take such type of step or measure (HR challenges in China, 2015). Many of the Chinese firms
lack employee culture. Here, employee culture is the type of culture where needs and demands of
the employees are given major importance. In addition to this, in this culture employer makes all
sorts of efforts to maintain the satisfaction level of its workers. Thus, this culture not only raises
the productivity of employees but also motives them to get associated with the company for
longer period of time. However, it has been critically evaluated that it is not necessary that
culture which Chinese corporation follows is the major factor which helps in maintaining the
satisfaction level of the employees who are working within firm (Leonard and Cardy, 2011). It is
due to the fact that there are some other factors too which has very critical role in maintaining
satisfaction level of the buyers in an effectual way. The factors consist of firm compliance with
training and development programs and reward policy of enterprise etc.
Besides this, another reason explored for the Chinese staff turnover is small increase in
salary and lack of appreciation of the work which is being carried out by them. Here, in return of
giving services, each and every employees expects some sort of increment in their salary.
Furthermore, they also want that the efforts which is being put up by them needs to be
recognized by their senior staff members. If they will not get all these things at that time they
will tend to feel highly dissatisfied and demotivated (Fox, 2008). The impact of same will be
seen upon the work which is being carried out by them. Furthermore, due to this the sales and
profits of the corporation which are operating their operation in China will also be impacted in a
negative way. Thus, it is required by the government of China as well as firm operating in the
respective nation that it should take necessary steps with regard to the same.
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The above given chart depict some major reason which Chinese firm are getting with
regard to turnover of their employees. Here, it is analysed that many Chinese employees are
complaining that the corporation in which they are working are offering good growth and
development opportunities (Pattanayak, 2005). Furthermore, insufficient benefits, rewards and
compensation are being consider as another most significant reasons behind the employee
turnover in China. Thus, for the firm it is very essential that it should take necessary step with
regard to same. Here, through such type of activity only Chinese firm can mark their effective
presence in the market and can deal with the prevailing competition effectively.
Furthermore, hiring and recruiting the talented employees is being regarded as another
most significant HR challenge in China. In this context, it is assessed that Chinese companies
takes help from the number of sources with an aim to search the right candidate for the particular
post. The most common sources are employment agency, job search websites and headhunters
etc. With the help of all these given sources, Chinese firm can fill the positions which are vacant.
But, the major problem which is associated with the these given sources that they do not
guarantee that the candidates which they are recommending have given authenticate and correct
information about the skills which they possess (Asgary and Walle, 2002). In addition to this,
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Illustration 2: Staff turnover reason in China
(Source:Armstrong, 2012)

many of the Chinese firm has also faced the issues related with the mismatch between the
Chinese firm expectation regarding candidate and what they actually got through recruitment
(How To Address The Major HR Problems Plaguing China, 2016). For example, candidate who
is found qualified and interview well may discover that it fall short of many skills from the
movement they are being given responsibilities. This put the firm into dilemma. This is because,
in the given circumstances firm cannot terminate the respective employees because of strict and
rigid Chinese government regulation regarding employment. Here, the employment law of China
depict that the employer cannot terminate its employees without any relevant reason. However, if
company do so that several complications will be bear by the firms. Overall, it can be said that to
perform the recruitment of right employee at the right place is the major HR issue in China
which firm needs to address (Benevene and Cortini, 2010).
In addition to this, another HR challenge identified which is being faced by the Chinese
companies is related to enhancing the motivation of Chinese workers. In this context, it is
assessed that a firm cannot apply one specific technique of motivating the workers for all
employees. This is because, each employees have varied needs which plays very critical role in
maintaining and enhancing their motivational level. For example, some workers feels highly
motivated when firm offer them non monetary rewards in the form of recognition, increasing job
roles and responsibilities of the workers and promotions etc. In comparison to this, some
employees feel highly motivated when firm offers them the reward in the form of bonus and
incentives. Thus, it can be said that for the enterprise it is very difficult to find the suitable
method of motivation in order to enhance the motivation level of the Chinese employees. Hence,
it is very essential for the corporation that it should take necessary action with regard to the given
challenge (Bridle, 2010). This is because, if not taken the sales and profitability related condition
of Chinese firms will be impacted in a negative way. Moreover, the motivation level of Chinese
employees can also be enhanced by involving them in the decision making process. Through this
way, such feeling can be entail among the workers that they are being regarded as the important
part of the firm. As a result of it, they tend to deliver their high performance to the firm. As a
result of it enterprise can get the benefits in the form of increased profits and sales.
Furthermore, attracting the talent from outside the country are being consider as another
issues which Chinese firm are facing. The rigid and highly bureaucratic culture of Chinese firm
is creating problem for them in terms of attracting talented pool from outside the boundary of
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nation. In addition to this, the low salary offer from the side of Chinese firm is also being
consider as the major issue which is creating problem in front of them with respect to attract
talented and skilled workers towards the nation in an effective way. Here, it is essential for the
government of nation that it should take necessary steps with regard to the given issues which are
related with the human resource. However, if not taken then in future these small problem can be
turned into big one (Budhwar and Debrah, 2001). The major impact of same will be bear by the
nation's economy.
Strategies for meeting the above mentioned problem
All the problem which are mentioned above are major and significant. But, among them
two most critical issues are assessed which needs to be addressed first by both respective
Chinese firms as well as government. The problems are related with employee turnover and
shortages of skilled and talented employees (Chang and et.al., 2013).
The first problem is related with the retaining employees within Chinese firm for the
longer period of time. With regard to the given problem, several reasons are assessed if
necessary actions with regard to the assessed reasons will be taken by the Chinese firm
managers, at that time the problem of retaining employees within firm can be resolved. In this
regard, it has assessed that Chinese employees are leaving firm because they seek lack of growth
and development opportunities (Guest, 2001). In this regard, it is recommended to the manager
of Chinese firm that they should prepare an effective career development chart for each position.
Here, through this way enterprise can maintain the motivation level of their employees. As a
result of it they will get associated with the enterprise for the longer period of time in an effectual
way. This is because, it has been seen that motivated employees tend to retain within firm for
longer period in comparison to the other workers. In addition to this, the problem of employee
turnover can also be resolved by forming the link between the reward and performance. In this
context, it is recommended to the Chinese firm manager that it should employ an effective
reward management policy which should be connected with the employee's final performance.
Here, the individual who perform well should be offered rewards in the form of promotion and
incentive etc (Karami, Analoui and Cusworth, 2004).
In the similar way, the employees who tend to perform outstandingly well will be given
reward in the form of giving high roles and responsibilities. Here, by complying with the given
type of activity satisfaction level of the employees who are working within Chinese firm will be
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maintained. Thus, Chinese enterprise can take action towards the employee turnover related
human resource issues. Moreover, the problem of employee turnover can also be resolved by
adopting the job rotation type of tactic. Job rotation is the practice of moving the employees from
one task to another (Mello, 2006). In this regard, it has been seen that many employees leaves
organization because they find their assigned work uninteresting. In addition to this, it has also
being assessed that employees feel highly dissatisfied when they to perform one specific type of
work on regular basis. It is due to the presence of given aspect they make the decision about
leaving the organization. But, given problem can be resolved with the help of job rotation
method. With the help of given method, Chinese workers can be given opportunity with regard
to learn and improve their skills regarding different type of works. The given tactic will not only
help in improving the skill of employees, but it will also assist in developing motivation and
satisfaction level of the Chinese workers in an effectual manner. Furthermore, the issue of high
turnover of employee can also be resolved by performing significant increment in the salary
structure of workers. For this purpose, manager of Chinese firm can use different salary
increment schemes (Trim, 2004). In addition to this, the control over the problem of employee
turnover will also be carried out by appreciating the efforts which is being put up by the Chinese
employees. Here, top level authority should take efforts with regard to give letter of appreciation
to the workers who have performed well. By complying with all the given type of activity, firm
can maintain the motivation of their employees and can motivate them to get along with the
company for longer span of time (Bratton, 2007).
Apart from employee turnover, shortages of skilled and talented employees are being
regarded as second most critical HR faced by HR firms in China. The respective problem of
nation can be resolved by organizing different training and development programs for the
Chinese workers. In this regard, it is recommended to all the Chinese firms that it should develop
necessary skills among the employees through the development programs. Herein, efforts should
also be made by the government of nation (Rogers and Wright, P2008). With this context, it is
suggested to the Chinese government that it should perform some kind of changes in its
educational system. In this context, it should motivate the individual of private universities that
they must organize different type of activities in their institution which leads to the overall
development of students. Through this way, significant improvement in the employability skill of
employees will be found out. In addition to this, the problem of skilled employee shortages can
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be meet by MNC who are operating their operation in China by adopting the outsourcing related
tactic. In this context, Chinese firms can outsource the employee from the other nation labour
market (Kim, 2012). However, it has been critically evaluated that the given tactic is effective
but it will lead to raise the overall cost of Chinese enterprise. This is because, attracting and
retaining the talent from the other country is not the simple task. It is due to the fact that in order
to do the same firm will have to given very lucrative options to the respective workers. The
offers can be in the form of high paid job, free accommodation and other related facilities etc.
Here, through this way the problem of talent shortages can be resolved (Francis and D'Annunzio‐
Green, 2005).
CONCLUSION
From the given essay it can be depicted that for the purpose to attain the tactical goal of
HR, it is being required by the HR manager of firm that it should take necessary steps with
regard to the assessed HR issues. This is because, if not taken then in this circumstance it will
become very difficult for the enterprise with regard to attain both SHRM (Strategic Human
resource management) and overall organizational goal in an effective way. In addition to this, by
working as per the above given strategies, firm as well as government of China can resolve all
the HR related issues which is being faced by them.
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