Last year, Aon identified 10 people trends that have influenced business performance in China – and will continue to do so in the year ahead. For companies who wish to remain competitive in today’s volatile, uncertain, complex and ambiguous (VUCA) world, it’s essential to respond to these trends.
Build a digital-ready workforce
New digital technologies are constantly transforming the business landscape, and companies with a digital-ready workforce will be the ones with an advantage.
Digital-readiness, or the ability to navigate and succeed in a digital workplace, can be identified by three core traits – learnability, agility, and curiosity. HR practitioners should review existing practices to spot talents with these three traits, and to develop digital competence in their current workforce.
Engage in data-driven talent retention
Every organisation has HR data, but few can leverage that data to drive organisational performance, forecast HR risks and suggest action points. Companies who can do so will benefit tremendously.
For instance, People Analytics can be used to identify high-performing employees who are at risk of leaving – and suggest a total rewards package that is commensurate with their performance.
Implement a C-suite-led talent strategy
Talent plays a huge role in driving business growth and many forward-thinking boards of directors have taken it upon themselves to drive the organisation’s talent strategy.
However, having a board who insists on ‘Talent First’ is just one aspect. What is equally important is having a well-rounded CHRO who can work with the board and implement a viable talent strategy.
Invest in tech-powered talent acquisition
In today’s competitive hiring market, HR departments must keep pace with recruitment technology to attract top talent. In 2018, we have witnessed the use of automated systems to speed up the hiring process, as well as video and gamification assessment tools for talent evaluation.
However, companies should look beyond improving the hiring experience. After all, technology’s greatest strength is in ensuring that hiring is based on data and not hunch.
Design personalised rewards systems
Many companies design reward systems to motivate and retain high-performing talent. However, in an organisation with many diverse employees, this might not be enough.
Each employee in a company is in a different career stage with differing demands. Based on this insight, a new rewards system has emerged – one that uses data analysis and algorithms to customise a rewards system for each individual employee.
Offer incentive stock options
According to research by Aon, more than half of Chinese start-ups and one-third of A-Share listed companies offer stock options as an incentive. This isn’t surprising as stock options have many advantages, including attracting and retaining talent, as well as fostering a sense of belonging and loyalty.
However, companies must understand that stock option incentives are not a silver bullet and cannot be used to replace a proper talent strategy, or to resolve deeper management problems.
Champion employee engagement
A study by Aon discovered that for every 5% increase in the employee engagement index, there’s a 3% increase in business growth the following year. The same study also concluded that the key engagement driver for Chinese employees is career opportunities, followed by leadership and rewards. Given these two important insights, one important question should be asked when developing the people strategy: “How can leaders cultivate a working environment where employees can learn and grow alongside the business?”
Influence employee happiness
According to a study by the University of Warwick, happy employees are 12% more productive. How then can companies influence happiness? One way is to heed the advice of a common saying in Chinese that states “health is happiness”. However, ‘health’ here refers to both physical health and mental wellbeing.
For instance, companies can provide guidance on retirement planning to help employees reduce their financial pressures. With less pressure, there’ll be more happiness.
Nurture female leadership
Despite the gender imbalance in leadership positions, female leaders have been making a huge impact. In fact, one-third of Aon’s Best Employers in China for 2018 are led by female CEOs, which is significantly higher than the 7% country average.
Democratic decision-making, flexibility, sharp instinct and firm patience – these are traits of many female leaders. But what’s more important is that these same traits are the ones helping companies achieve success today.
Manage government’s policy changes
In 2018, the Chinese government announced significant policy changes to individual income tax. In response, many companies have initiated reforms to their rewards strategy.
Instead of relying on compensation, companies should focus on a total rewards framework which includes both cash and non-cash incentives (including benefits) that may help to reduce the additional tax burden that Chinese employees face with a salary increase.
How will Chinese companies respond to these trends? Given that four of these point to a future with technology at the helm, it is likely that we will start to see more companies prioritise innovation as they pursue their global ambitions.