Money isn’t even in the top 10 reasons an employee in China remains on the job, according to a study conducted by Development Dimensions International (DDI) and the Society for Human Resource Management (SHRM). In fact, out of 20 retention drivers, compensation was 14th on the list.

The study ‘The Flight of Human Talent” reported that employees are shortening their tenure and organizations are searching for a solution on how to keep them longer. One quarter of employees have already had three or more jobs in their career and while many of the employees surveyed were new to the organization, one in five were likely to leave their positions in the next year.

“Job hopping has become a culture for Chinese workers,” Rich Wellins, Senior Vice President of DDI, said. “They’re staying for a short time, gaining some experience and jumping to the next opportunity. They’re not looking for longevity—they’re trying to climb higher and faster and changing jobs helps make that happen.”

“China's rapid economic growth has created more job opportunities than qualified workers—a significant misbalance for businesses,” said Steve Williams, Director of Research at SHRM. "This study illuminated the fact that organizations need to rethink their retention strategies to hold onto the most talented workers."

The study was conducted with 862 employees, who are leaving their organizations, seeking new employment or new to the organization, and 215 HR professionals in late 2006 and early 2007. A distinction in this research is that many employees were new to their organizations; more than half had been with their employers for less than one year. The study measured employee satisfaction, reasons for turnover and what organizations are doing to promote retention.

Some other major findings from the study include:

There is more to retention than compensation.
Companies put a lot of focus on financial retention strategies like rewards, bonuses and compensation to keep employees, yet three out of the four top factors inducing employees to stay with an organization have to do with leadership.

“Raises may be a way to get someone to change a job, but its not going to be a primary reason for staying. Companies just need to be competitive with compensation—employees aren’t basing their entire decision to stay or go on the money,” Wellins said.

According to responses from employees, companies should focus their retention efforts on having quality managers, providing opportunities for accomplishment and recognizing individual contributions, as these were the top three retention drivers.

Senior leaders are the greatest turnover risk
While the rapid turnover of talent poses a real challenge for organizations, it’s even more disturbing that mid-management and executives indicated a higher likelihood of leaving the organization within the next year than did individual contributors. While HR managers expected higher-level employees to remain longer, these senior managers indicated more dissatisfaction and less loyalty to the company than others, making them ready targets in China’s highly competitive market for executives.

Employees and HR are out of sync
While HR and employees agree that the top public reasons for employee turnover is lack of growth and development, better career opportunities elsewhere and insufficient compensation, HR underestimated the importance of interesting work for employees. When asked to rate its importance, HR ranked it near the bottom of the list at number 14, while employees put it near the top at number 4.

“There’s a real disconnect between employees and organizations on the reasons behind turnover—and organizations can’t solve retention problems without understanding the reasons behind it,” Wellins said. The stated reasons often obscure the underlying reasons. For example, HR overrated the importance of “external factors,” like going back to school, which might be hiding more sensitive issues. At the same time, HR put ”poor relationship with the manager” much higher than employees did, which could be attributed to the fact that the Chinese culture considers speaking badly about one’s manager as ”washing dirty linen” in public.

Organizations are ‘experimenting’ with retention strategies
In an effort to retain more people, organizations are trying a wide assortment of retention strategies—but not doing much measurement to see what is actually working. And when asked to rate the value of 32 different retention methods as well as their own use of them, it was revealed that organizations weren’t using some of the strategies rated among the most valuable, including career planning and treating retention as a corporate objective.

“It’s amazing that the majority of respondents are not seeing retention as a corporate priority,” Wellins said. “There is no silver bullet for retention—but you need to measure what motivates your employees to stay and address those areas, because your solution should fit your organization’s specific needs.”

About “The Flight of Human Talent Employee Retention in China 2006-2007”
Conducted by Development Dimensions International (DDI) and the Society for Human Resources Management (SHRM), the study was completed by 215 HR representatives and 862 employees in a wide range of organizations operating in China. In addition, 100 one-on-one telephone interviews were conducted with managers, employees and HR representatives. 81 percent of the participants’ organizations were multinational, nearly half were publicly traded and the average employee size was between 1,000 and 5,000. The study was sponsored by BMR magazine and ChinaHR.com.

About DDI
Founded in 1970, Development Dimensions International, a global human resources consulting firm, helps organizations close the gap between today’s talent capability and future talent needs. DDI’s expertise includes designing and implementing selection systems, and identifying and developing front-line to executive leadership talent. With more than 1,000 associates in 75 offices in 26 countries, the firm advises half of the Fortune 500. For more information visit http://www.ddiworld.com/aboutddi

About SHRM
The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 210,000 individual members, the Society's mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available. As an influential voice, the Society's mission is also to advance the human resource profession to ensure that HR is recognized as an essential partner in developing and executing organizational strategy. Founded in 1948, SHRM currently has more than 550 affiliated chapters and members in more than 100 countries. Visit SHRM Online at www.shrm.org.