Employee retention in China:

Selbstbewusste asiatische Geschäftsfrau, die in einem modernen Büro mit einem vielfältigen Team lächelt

Why Money Is Not the Only Currency

High turnover is one of the biggest and most costly challenges for European companies in China. Often, the cause is hastily attributed solely to salary. However, those who want to win the “War for Talents” in China must understand that the loyalty of executives and employees depends on a complex interplay of three currencies: money, status, and time.

This article decodes the background of the Chinese upward mobility mentality and shows you which strategic levers you can use to not only find the best talents but also bind them to your company in the long term.

The difference between business success and misunderstanding is often just missing context.

China’s rapid economic history since 1978 has led to prosperity that has not developed in step with social security systems. Aspects such as comprehensive retirement provisions or financing children’s education are not a given for many.

This background explains the strong urge of many Chinese professionals and executives for continuous improvement of their financial and social situation. A job change is therefore often more than just a career move – it is a fundamental part of personal and family future planning.

For motivating and retaining talents in China, visible signs of recognition and security are often just as important as the monthly base salary.

Bonus as a Status Symbol: The traditional bonus for Chinese New Year (often one to three monthly salaries) is more than just a premium – it’s a public measure of a person’s success and status. A generous bonus payment is an investment that “saves face”, strengthens the status of your employees in their social environment, and secures their loyalty.

Social Security as a Loyalty Premium: Additional social security benefits are a strong lever for employee retention. Consider insuring the parents of a key person for the duration of employment as a gesture of appreciation. Such extraordinary benefits create a deep, personal bond that often can’t be outweighed by a higher salary offer from a competitor.

A “one-size-fits-all” approach to designing offers consistently fails in China. The priorities of top talents change depending on their life stage – a strategic factor that you should use in your personnel and cultural strategy.

  • A talent at the beginning of their career will see an attractive salary as the highest incentive.
  • A young executive with a family might prefer more flexibility and time.
  • An experienced manager with children of educational age may place the greatest value on financial support for their education.

A deep understanding of the personal situation of your executives and correspondingly tailored offers are the key to a sustainable and mutually beneficial alliance for success.

Especially in the executive suite, it’s about more than just the salary package. When you’re filling a top position, the talent you’re courting will ask themselves critical questions just as you do:

Does the corporate culture fit me?

What strategic goals does the company have in China and how realistic are they?

Do I get the necessary creative and decision-making leeway to make a difference?

Is the company stable and set up for the future?

Here it’s about formulating a clear and honest value proposition. Our expertise comes into play precisely in defining these strategic framework conditions and identifying the perfect leadership personality.

Creating the Right Incentives – A Question of Strategy

Reducing turnover and building loyal, high-performing teams in China requires a deep understanding of the local culture and the individual needs of your employees.

Let’s talk about how we can develop the right strategy for your company.