Cup of Cha
This is China

Switching jobs this week has gotten me thinking about about just how short stints at one company tend to be in China. I always find it amazing the amount of job hopping people do, and how much it must cost in lost GDP. Rarely have I seen employees spend more than three years in a private firm. It almost seems like people believe not changing is a sign that they lack upward mobility.

One of the strangest phenomena is that Chinese will often leave one job for another, even if the new position is neither of higher stature, nor pay. It is almost like a sports GM who makes trades just to keep changing the make-up of the team, even if it does not actually improve anything. There is little consideration given toward office chemistry, loyalty to employer, or even upward mobility in one place (it’s the anti-Japan).

Not all of the blame falls on the workers. On the contrary, businesses are often looking more to save every last penny and forget to give employees incentives to stay. If there were a stronger culture of treating employees well, probably this problem would not exist.

So petty, are some firms, that they often structure contracts in ways specifically designed to squeeze an employee when he leaves. For example, one friend recently switched jobs, but since his company does not pay him until the 18th of the following month, he found himself in the odd position of not being able to tell his employer that he had started elsewhere. Basically he knew they would refuse to pay him for the full month of work that he had completed, so instead of informing them he just stopped showing up at the office, waiting for pay day to tell them formally, and gave them no time to find a replacement. But really, what other option did he have other than forgo a month’s pay? In that kind of environment, why would anyone feel a sense of loyalty.

Clearly this poor employer-employee relationship in endemic at local firms. One of the great advantages of China is its low cost of labor. Unfortunately, sometimes this is taken for granted and employers forget the basic rules of reducing turnover. Extra benefits that keep employees happy, tend to make them more productive too . There is significant data that indicates granting maternity leave, offering flexible hours, and providing childcare actually benefit a company’s bottom line through improved output, reduced training costs associated with new hires, and retention of top talent.

Like with so many other things in modern China, the size of the economic boom, and the room to make profits, obscures some serious, fundamental problems with the way firms do business here. As the economy matures and labor costs are decreasingly the primary advantage to being in China, I strongly suspect high turnover rates will begin to undercut the country’s competitiveness.

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