Although the economic crisis has slowed things down, experts still consider China to be one of the most exciting business climates today because of its financial transformation in recent years. Western companies sending employees to China, however, have to deal with a raging war for talent and a shortage of highly qualified applicants and college graduates.
Companies -- and the leaders they send from abroad to manage employees -- must do more to develop homegrown talent, says Erik Duerring, director of consulting services for Asia for Bridgeville, Pa.-based Development Dimensions International Inc.
Originally from Pittsburgh, but now working in Shanghai, Duerring is co-author of Leadership Success in China: An Expatriate's Guide, published by DDI Press.
He says expats managing employees in China should be ready for an environment where workers anticipate being treated like family and Western executives are not only expected to look out for their employees' careers and help them grow, but are supposed to attend family functions and even make toasts at their weddings.
In a Q&A with staff writer Jared Shelly, Duerring shares his advice about managing employees in China.
In your book, you state that the No. 1 problem with international assignments to China is dealing with a serious talent shortage. Why is it so difficult for HR leaders to find talented employees?
It's something that extends back several generations, where you basically have a lack of leaders coming up through the pipeline in the organization. You see a lack of leaders beyond 50 or 55. Around the age of 45 and below, that's where you see individuals who are more likely to have had either a different type of education available to them, or they've been built up in an organization that has a Western tie or is a multinational. That's where you see that leadership pipeline really start to kick in.
As we've all grown up in our careers, we have role models we look toward and say, "These are the people who live a leadership model, who I want to represent myself after." A lot of the folks in China don't have those models to grow up with.
With a full-scale talent war, what can HR do to try to find talented employees in China?
It's a fight. What you start to see people do is grooming individuals, basically bringing in M.B.A. grads and [utilizing] campus recruitment and management-graduate programs. So they're bringing them right in and taking more of a "come into the culture and let's throw you up as our future senior leaders of the organization" approach.
You see organizations taking them in at very young ages and giving them opportunities. Growth opportunities. Career-advancement opportunities. They understand that there's a leadership gap in China and they are very quick to find the best and groom them internally and give them a lot of opportunities and a lot of career development to keep them with the organization.
What are some best practices for attracting talented college graduates?
You see more and more companies putting a brand out there and really spending a lot of time marketing their company's name to the prospective Chinese employee. They're all going to offer about the same kind of money, so how do they differentiate themselves?
They differentiate themselves based on development, career-advancement opportunities and basically showing them a career path -- how you go from an employee stepping in the door to onboarding, to becoming a leader, to becoming mid-management, to becoming a senior leader.
They also highlight Chinese success stories. So, for instance, "Here's someone who came into the organization three years ago and now this person is a product manager for xyz product."
How do Chinese employees differ from American workers?
I don't want to boil down the Chinese culture to five characteristics, but there are five characteristics about Chinese employees that you, as a leader, really need to pay attention to and adapt to. They are indirect communication style, saving face, the respect for age and authority, strong family values and the preference to follow the leader.
With their indirect communication styles, Chinese employees might not proactively provide details; they might talk in broader [terms] or maybe generalities. As a Westerner coming in, it's hard to tune the ear in and make sure that you are really trying to clarify why the person is actually talking about generalities without getting into the details.
From a leadership perspective, you need to always be thinking about the implications of that. You need to be able to read between the lines and understand the context. You need to ask targeted questions with in-depth follow up. You really need to make sure you're talking through the details of an agreement or next step.
Chinese employees try to save face, and are even less happy than people from other cultures to be told they are wrong in public or in front of others. A Chinese leader or supervisor might avoid corrective action. The leadership implication for you, as an expatriate, is making sure you're holding leaders accountable for taking corrective action, creating an environment for feedback or learning, as well as help in knowing the appropriate time and place to give feedback to others ... . It's not necessarily appropriate to give feedback in front of others.
When we talk about respect for age and authority, basically, the elders are either formal leaders or they're highly influential, informal leaders. The interesting dynamic you're starting to see more and more now is young people taking on leadership roles because of this leadership talent gap. Leaders who are not the oldest must pay attention and respect older team members.
I have several people who report directly to me who are 15 or 20 years my senior and I need to always make sure that I'm giving them respect in front of the other colleagues. I think that's one of the things that is absolutely most critical.
How do family values in China extend into the workplace?
For the Chinese employee, family values naturally extend into the workplace. The employees take on their parents' views and decisions. It's just amazing. There have been times when we're trying to recruit someone and you're basically recruiting not just the employee, you're really recruiting them, their spouse and their parents into the organization.
They bring their families great pride in their accomplishments, and they're going to associate the employer as an extended part of the family. It's sort of this "take care of, compensate, develop and promote me" sort of mentality.
That's one of the biggest differences for a lot of expatriates who come from the West. The Chinese employees and the organization are one and the same family. You're going to attend evening activities, you're going to go to weddings -- and, as a matter of fact, when you go to a wedding, you're going to be the one who stands up and speaks at the wedding.
You're going to really demonstrate personal commitment to helping this individual succeed in his or her career path.
The leader/follower relationship is really modeled on parental relationships, so there's really a strong relationship between the leader and his or her team. And leadership attaches to the person, not just to the role. As the leader, you're really expected to act as a father or mother. You need to have concern for the employee's overall well-being.
You need to understand the employee in a work context, as well as outside the work. You need to inquire about personal life and call and follow up on information about the individual.
As a leader, you need to make sure you're taking accountability and not blaming others, your team or the mystery of culture for problems.
While the language barrier presents an obvious challenge for Western expats, you "knowing the language as well as the natives won't necessarily reduce the cultural mismatch." Why?
Language is just one component of it. What's just as important is the fact that you understand the culture. The language certainly gives you a window into the culture, but it is not the whole story.
It's [a matter of asking] what do you do with that understanding, how do you adapt, how do you flex your leadership style so that you're successful with your Chinese team? That's completely different than just being able to speak the same language. There are plenty of leaders out there in America who can speak English to their employees, but does that necessarily make each one of them a good leader? No.
I remember this young IT manager who actually spoke fluent Chinese; [discussing his own experience] he told me "it became blatantly clear that I was treating my employees like my boss treated me back in the United States. Harsh. More independent. Eat lunch at the desk. Crunching through e-mails. Back in the States, for me as an employee, it was my responsibility to reach out to my manager; it was my responsibility to kind of grow and think about my own career development."
He said, "I realize what I am going to do differently. I need to be sitting down with my people. I need to be having career discussions with them. I have to listen to people more; I can't just be the one talking the most. I know that I might know more technically than everyone else, but I need to ask questions first, and then share my own insight."
He could talk to them in Chinese, but a lot of the fundamental management skills that are so critical, and need to be applied tenfold in China, he did not do.
Why is trust so important in relationships in China?
When we talk about Chinese culture, people will put greater [emphasis] on the personal relationships, the ones built upon trust as opposed to the business relationship. The trust side really helps you get things done. It also opens up the communication channels between you and your Chinese team. That trust takes time to build and you have to build credibility from the very beginning.
There are numerous trust traps you can fall into. I think sometimes, unintentionally, there are promises that are put out there. It might come across from a Chinese perspective as a promise that has been made, yet from a Western perspective, it might very well just be conversation.
You hear a lot of promises being made: "I will get you this" or "I'll look into that." From a Western perspective, you might just say that and it might be on your back burner for awhile. In China, an employee might ask, "am I going to get that next week or am I going to get that in two weeks," where this person might not be thinking about it for six months.
So you must be very cautious not to break those promises because that breaks trust.
Do you have any other advice for HR executives sending employees to China?
One of the things you really want to make sure they understand is that expatriates do not fail because of technical competence. It is always a matter of leadership character. That would be rule No. 1.
From an HR perspective, as you send someone in, I would make sure that they understand how critical it is that they position themselves.
That means establishing themselves -- what is the formal title, [what are] the responsibilities? Even the reporting line is necessary to provide that clear sense of direction. These people need to make sure they are positioning their assignments in a way that addresses employee expectations.
They're going to expect a clear direction from you. You are a link back to corporate and that's very important.
We don't take into consideration what assumptions your Chinese employees have of you. How do the Chinese employees see you as an expatriate working in that country? You're a visitor who's going to leave. It's short-term, results-focused. It's sort of self-serving. Others will feel capable of doing your job.
You need to understand what the thought process is and what they're thinking. You need to make sure that you're proactively addressing things such as the employee expectations. They want you to respect them and their culture, and know what decisions need to be made and have the answers.