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1NOVEMBER2009WinningthetalentwarinChinaAsearch-firmexpertoffersadviceontailoringsuccessfultalentstrategiestoachangingChina.2AsmoreandmoremultinationalsopenofficesinChina,attractingandretainingthebestlocaltalentisbecominganincreasinglystrongdifferentiatorofsuccess.SosaysEmmanuelHemmerle,aprincipalwithexecutivesearchfirmHeidrick&Struggles,initsShanghaioffice.Inthisvideointerview,Hemmerlechallengesmanyoftheclassicassump-tionsabouttalentmanagementinChinaandshareshisinsightsonfindingexpertlocaltalent,settingcompensationlevels,andunderstandingtheevolvingcredentialsanddesiresofChineseexecutives.ClayChandler,aneditorwithMcKinsey’spublishinggroup,interviewedHemmerleinTokyoinOctober2009.There’sawrongassumptionwithregardtoChina.HeadquartersinJapan,inEurope,intheUStendtobelievethatChina,becauseit’slowcost,shouldbecheaperintermsofexecutives’packages.Nothingismorewrong.Infact,ifyouwanttowootoptalent,you’regoingtohavetopaytherightamounts.Oftenyouendupwithpackagesforsimilarskillsets,similarresponsibility,scope,size,everythingthatishigherinChinathanwhatwouldbethecasewithsimilarcounterpartsinEuropeandtheUS.Andwespendalotoftimecoachingcompanies,especiallythosethatareheadquarteredoverseas,thattheyneedtoinvestintalent[inmuchthesamewayastheywould]investtocreateanewresearchcenter,tocreatenewproductionfacilitiesinChina.Theyneedtoinvestinthetalent.Ifyouwanttoptalent,you’regoingtohavetopayforit.We’restartingtoseesomeinterestingtrends.Wecanstartseeinganumberoftoptalentswhomeettheinternationalbeststandards,whocouldcompetewiththeirpeersintheUSorinEurope—andI’mtalkingaboutintermsofperformance,intermsofskillsets.Andprobably,we’regoingtostartseeingmoreandmoreofthat.AnumberofcompaniesoverthelastfewyearshavedecidedtoappointamainlandChineseinthetopjob.Andit’snotjustforshow.It’sreallybecausetheybelievethepersoncandeliversuperiorperformance,asmuchorevenbetterthanWesternersortheJapaneseorwhatever.InChina,Ibelieveyoucan—andyouhaveto—differentiatethestrongperformersfromthelowperformers.Andifyoudon’tdoso,youmaymeetresentment,infact,andasenseofunfairness.“WhyishebeingcompensatedasmuchorascloselyasIam,whileI’mastrongerperformerandit’srecognizedacrosstheorganization?”Ofcourse,youwouldcreatepoliticalissuesandreactions,negativereactions,ifyouweretodifferentiateona[level]thatisnotperformance[based].IbelievethatitmakeslessandlesssensetohaveWesterners,or[expatriates],let’ssay,whoarecompensatedtwiceorthreetimes3asmuchasthelocalmainlandChinese,whileperformanceisequivalentorsometimesevenlower.Thatwillcreateissues,veryseriousissues,inyourorganization.I’malwaysconcernedandworriedwhenacompanytellsmethattheywanttolocalizebecausetheywanttodrivedowncosts.There’sahostofreasonsthatarebetterreasonsthanjustcost.RecruitingoutsidetheboxThemarketeconomyisn’tthatoldinChina.Take,forexample,luxurygoods.Itreallystartedtenyearsago.Soifyouwanttofindveryseniortalent,veryseniormanagersinthatspace,it’salmostimpossible.Youwillhavetojumpinto,say,hospitality.Youwillhavetojumpintoconsumergoodstofindthosetalents.Youneedtogoacrossandbeyondyourboundariestofindtalent.That’sonedirection.Anotherdirection:youneedtotakerisks,aswell,intermsofseniorityandintermsofresponsibility.Youwon’tnecessarilytakeanexperience-confirmedsalesdirectoror[businessunit]headforanothersalesdirectororanotherBUheadposition.Youmayhavetolookonestepbelowandtakeariskwiththem,whichyouwouldn’tnecessarilydoinmaturemarkets.Togiveyousomeenlighteningstatistics,ordata:inChina,thebulkofourplacementsarebetweenage,say,37to38;so,late30stoearly40s.Inmaturemarkets,wewouldhavetalentswhoseageswouldbemuchmoreadvancedthanthat.CareerplanningSeniorexecutivesinChinaarebecomingmuchmorematureandlongtermed,intermsofhowtheyplantheircareer.Andsoyoudon’tseethatmuchhopping.Talentstendtodomuchmoreduediligencethantheyusedto.And,interestingly,they’remoresophisticatedintermsofwhattheypursue,asmuchastheconsumersare—they’reincreasinglysophisticated,intermsofwhattheydemandfromtheproducts.Samewithregardtocareers.Threerecommendations[Have]confidenceinmainlandChinesetalent,andthatwillsupportlocalization.Andagain,we’renottalkingabout100percentlocalization,thatdoesn’tmakesenseeither.Youneedamix.Youneedtocrosscultures.Butyouneedtohaveahighcontent,ifnotamajorityofthecontent,ofthemanagementteam,whoshouldbemainlandChinese.So,that’sone.Second:lookforthebesttalent.Andforthatpurpose,youneedtoknowwhothebesttalentisinthemarket.Italwaysstrikesmethatanumberoforganizationslookattheircompetitors,andtrytounderstandtheirweaknessesandtheirstrengths,andgatherintelligenceontheircompetitors.Buttheydon’tgatherintelligenceontalent.AndthisisakeyfactorofdifferentiationandperformanceinChina.Ifyougetthebesttalent—beyondtheproduct,beyondinfrastructure—thatwillhelpyoudramaticallywininthemarket.Butfirstyou’vegottoknowwhotheyare.4AthirdpointI’dsay:createanenvironment,trytobuildaculture,thatisattractivetoChinesetalentsandhelpsthemremainwiththeorganization.Forthat,companiesshouldfoster,asmuchaspossible,anonhierarchicalenvironment,withopportunitiesforgrowthfortheindividuals—opportunitiesto