Photo: Photodisc

Workforce
Engagement
Learning and development in China:
good for workers; better for employers.
By Julie Gebauer

The 2005 Towers Perrin Winning Strate-

gies for a Global Workforce study of more
than 86,000 workers in 16 countries
reveals that today’s employees place a
huge premium on the ability to learn
and hone their skills on the job. In
China, where we interviewed approxi-
mately 1,100 full-time employees who
are working in organizations with
250 or more employees, learning and
development opportunities were the
top reason employees were attracted
to a company. In a rapidly growing,
rapidly changing business environ-
ment, Chinese workers see continu-
ous training and skills development as
a way to enhance their future employ-
ability and open up career options.
But it’s not just employees who are
pushing for these programs. Employers
are promoting them, too. In what has
become a proverbial win-win situa-
tion, well-designed learning and devel-
opment programs not only positively
influence employees and their perfor-
mance, but can also help improve
company results.
China’s evolving workforce
In little more than a generation, China
has changed itself from a largely
self-contained agrarian society with
limited outside commerce into a major
international trade partner. Economic
growth rates have averaged 9 percent
annually, making China a major bene-
ficiary of direct foreign investment and
further driving business expansion.
Political changes have been equally
dramatic during this time. A unique
blend of capitalism and communism
has emerged, allowing private enter-
prise to flourish.
Along with economic and politi-
cal changes, the Chinese workforce
has undergone significant change. The
country now comprises more than 25
percent of the global workforce and
is producing far more college grad-
uates than any other country, with
more than 3 million new graduates
in 2005 alone. Paradoxically, there is a Workers in China are more inclined to
labor shortage in China. Due to a lack move from job to job and from place
of practical training, less than a quar- to place to secure better employment
ter of the 2005 college graduates were than workers in virtually any other
candidates for jobs at multinational country. In fact, the Chinese work-
corporations. And limited practical force looks much more like America’s
work experience leaves a skills short- in terms of mobility than do European
age, especially among management- workforces. And, much like American
level jobs workers, Chinese workers are starting
At the same time, with major multi- to take a more active role in their own
national corporations now operating career management. They understand
next door to state-owned Chinese busi- that, particularly today, acquiring new
nesses, social attitudes and workers’ skills figures prominently in their abil-
expectations in China are changing. ity to succeed.

28 | T+D | November 2006

 Complex global landscape
According to the Towers Perrin’s 2005
study of the Chinese workplace, Manag-
ing the Workforce for Competitive Advan-
tage, rapid growth in Internet access
gives employees—whether inside or
outside of China—far greater aware-
ness than ever before of their employ-
ment options. In China in particular,
the government is actively involved in
improving the information flow about
available jobs and available training for
jobs. This is having a profound impact
on job expectations and employee
mobility, and is shifting the balance in
the employer-employee relationship
toward the worker.
Globalization has opened entirely
new business markets, increased com-
petition, and widened sources of labor.
Business strategies have become
much more “dependent on people,”
which is raising the stature and bargain-
ing position of employees everywhere.
The Chinese government is actively
supporting the leading enterprises in
these people-focused industries with
preferential policies to spur growth.
These global developments are add-
ing to the importance of finding and
keeping skilled and productive workers
in China today. Companies that address
their local workforce challenges will be
better positioned to win on the global
playing field.
Effective workforce engagement
The things that enable an organiza-
tion to build an effective workforce—
attracting workers and keeping them
engaged and motivated on the job—
vary around the world. In China, work-
ers focus primarily on the availability
of learning and development opportu-
nities when deciding whether or not to
join an organization. Close behind are
competitive base pay and career ad-
vancement opportunities. the challenges as well as the oppor-
Attraction
Learning and development
opportunities
Competitive base pay
Career advancement opportunities
Source: Managing the Workforce for Competitive Advantage, Towers Perrin, 2005
Employees want more than just
promises, however. Once on board,
workers expect their employers to
make good on their promises. The
top reason that Chinese workers are
engaged in their work and remain
committed to their organizations is
that they feel they truly have improved
their skills and capabilities over the
previous year.
Workers’ interests in learning and
development opportunities is not sur-
prising, given the government’s inter-
est in training and skills development,
its growing awareness of skills short-
ages, and China’s cultural emphasis on
knowledge and wisdom. For employers,
by contrast, it might seem that train-
ing and development programs would
not provide as much value, since work-
ers move among jobs so readily. How-
ever, Towers Perrin research shows
that employees who have the oppor-
tunity to develop new skills are more
likely to be engaged in their work and
more likely to stay with their compa-
nies and add value while they are
there. Thus, employers in China will be
better able to build an effective work-
force and deliver stronger business
performance if they can capitalize on
workers’ strong desire for learning and
development opportunities.
New training
and development plans
Some companies in China have al-
ready adjusted to this rapidly evolving
business environment. Two changes
stand out. First, they have signifi-
cantly increased their investment in
employee learning and development
programs in the last few years. Second,
and perhaps more important, they are
integrating these new programs with
internal career development ladders,
so that employees can clearly see both
Engagement
Skills and capabilities improvement
over the last year
Consistent actions and values
of senior management
Good collaboration across units
How Employee Engagement
Drives Business Performance
Towers Perrin defines employee
engagement as workers’ willing-
ness and ability to contribute
to a company’s success, the extent
to which employees put discretion-
ary effort into their work. Its series
of extensive workforce studies show
that employee engagement is one of
the key engines that drive business
performance:
• On average, highly engaged em-
ployees tend to work for companies
where revenue growth is at least one
percentage point above the average
for their industry and where the cost
of goods sold falls below the industry
average.
• By contrast, disengaged employees
tend to work for companies where
revenue growth falls a point or two
below industry averages and where
the cost of goods sold surpasses
the industry average.
• Highly engaged employees in China
are four to nine times more likely
than their disengaged peers to be-
lieve that they can, and do, positively
affect cost, service quality, revenue
growth, profitability, and customer
service. And this belief directly trans-
lates into employees’ effort, attitude,
and interest on the job.
• When people are engaged in the right
activities—and understand clearly
how their work affects the company’s
financial and other goals—the results
are unmistakable. Engaged employ-
ees routinely go the distance because
they find it rewarding for both them-
selves and the company. Conversely,
when people are not engaged—and
feel little connection to the business
and its larger goals—the results
show up in the form of a poor service
ethic, high turnover, absenteeism, low
morale, and a host of other behaviors
that cut directly into financial perfor-
mance over time.
November 2006 | T+D | 29

Top three drivers of employee attraction
and engagement in China
Topic Entry level Senior sales
managers
Overcoming
client objections X
Displaying store
merchandise X X
Managing dealers
or wholesalers
Setting goals
and measuring
results
Rewarding
performance
Source: Managing the Workforce for Competitive Advantag, Towers Perrin, 2005
tunities available to them with their
employer. Prior to this, these compa-
nies offered training on a one-time
basis or not at all.
New training programs are gener-
ally targeted toward one, or both, of
two main groups: broad-based workers
and managers. Training and develop-
ment programs for the broad work-
force concentrate on employees’ func-
tional or technical skills. A company
in China’s fast-moving consumer
goods industry designed and imple-
mented its own formal sales training
programs for entry-level sales repre-
sentatives and senior sales managers
and directors. Courses cover all of the
traditional topics found in basic retail
marketing, which are familiar in most
mature economies, but are still rela-
tively new in China. Comparable tech-
nical skills programs target employees
in information technology, finance,
and research and development.
For managerial and behavioral
training, organizations provide pro-
grams that cover coaching, managing
resources, situational leadership, and
time and stress management. Man-
agerial training programs are critical
because a 2005 Towers Perrin research
report showed that many employ-
30 | T+D | November 2006
Directors
X X
X
X X
Chinese workers
see continuous training
and skills development
as a way to enhance
their future
employability.
ees feel disengaged from both their
manager and the organization. When
asked to rate their manager on a list of
key attributes, only 40 percent of sur-
vey respondents gave their managers
favorable ratings for helping them un-
derstand how their efforts contributed
to the organization’s overall success.
And only a disturbingly small 43 per-
cent felt that their managers under-
stood what motivated them.
Workers’ dissatisfaction with their
managers and their overall work envi-
ronments are major barriers to strong
and sustained employee performance.
This situation is exacerbated by the
shortage of professional managers in
China and the tendency to promote
managers based on their technical
Chinese workers are
starting to take a more
active role in their own
career management.
Photo: Photodisc
rather than their managerial skills,
which has yielded mixed results. For
companies, the options are fairly clear:
Develop a cadre of better-trained and
qualified middle managers quickly or
import seasoned management talent
from outside of the company or outside
of China.
Better late than never
As China’s economy grows, competi-
tion for high performing employees
is bound to increase and so is the de-
mand for good training and develop-
ment programs. For employers, it’s not
a matter of should they upgrade their
programs; it’s about how quickly they
can do it.
It’s a pattern that we’ve seen re-
peated across much of Asia during the
last decade. Companies that invest
in these programs and upgrades
stand the best chance of attracting
and retaining the best talent.
Julie Gebauer is a managing director
of Towers Perrin and a member of the firm’s
HR Services Operations Council;
julie.gebauer@towersperrin.com.