HR management

"A company should limit the employee turnover to a manageable degree, say 5 to 8 per cent a year," says Joyce Ma, vice-president of HR and organization with the telecom equipment giant Ericsson's China unit.

Ma started her career as a government official in the early 1980s, has worked at talent management positions at General Electric and Rebook; and has been with Ericsson for about a decade.

The period from the mid-1990s to 2000 marked the first wave of a high turnover rate for multinationals, when at least 10 per cent of employees left each year, she says.

"At that time, young people were anxious for quick career growth, which was not often possible by staying in just one company. So job switches became a shortcut."

When the first wave mainly happened in large multinationals, they set in place systems to keep people and adapted their organization and management to market changes, so the volatility is now low.

In contrast, the current second turnover wave is being felt mainly in fast-changing sectors and small and medium-sized enterprises (SMEs).

"How to keep good people is really a challenge for French SMEs in China," says Florence Gomez, director general of the French Chamber of Commerce and Industry in Beijing, which is compounded by the rising costs of acquiring talents amid a shortage.

This year alone, as many as 1,000 French SMEs came to China; and while they are satisfied with the growth, they are more concerned about talent retention, because they usually have a dozen or so employees which makes it difficult to implement a well-organized system to manage staff.

A similar situation is facing Norbert Heckmann, managing director of German electronic component maker Wurth Electronic, who comes thrice a year to China where business is growing at least 50 per cent annually.

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