China - Fuelled by business needs, the HR function in China is providing more support as a strategic partner to companies. But there is still a shortfall in the knowledge needed to get HR practitioners to the boardroom table, says Jenny Li, market leader for Hewitt associates Greater China region.
Li, who was previously a HR practitioner in British and American multi-national company (MNCs) before joining Hewitt eight years ago, says that in the early 1990's, the HR function was merely seen as an administrator to the business. That is because MNCs that were in China merely relied on established HR practices that were directed from their corporate level. Furthermore, this was compounded by the fact that China did not play a significant role in business and revenue for many of the companies back then.
China later embarked on a high-growth track record between the years of 1998 to 2004 and made the switch from a planned economy to a market economy. That, Li says, shaped up enterprise and business models - which naturally meant that HR needed to play a more advisory function to the company. Yet, whether it is for MNCs, state-owned or private local companies, Li says, "I see very few intelligent HR practitioners that can successfully transition from an administrative role to a business partner role. And now they are still struggling."
When asked why HR practitioners are having difficulty transitioning to more strategic functions, Li's says it is partly due to lapse in the education system which did not teach HR as a business major. Instead, first-generation HR practitioners often went to school to major in finance or even secretarial work. Also, she adds that experience-wise, HR practitioners do not have the work experience needed to support the company strategically.
Because of this, one strategy some companies adopt is to transferring line managers - who have shown an aptitiude for management skills - into HR functions. This helps as line managers have a deep understanding of the business, such as its business model, strategy, execution challenges and the company culture.
And with the talent crunch in China, this is also affecting organisations' hunt for HR talent as well. "For example, we see from our annual compensation & benefits study this year, that the turnover in the China market is much higher than before. In some industries, it could reach to over 20%."
Citing a 2005 Hewitt survey, Li says companies have to understand the top three drivers that drive employee engagement and also show a strong correlation with company performance. The top three drivers are performance management assessments, career planning and compensation & benefits incentives, she says, with career development being the top driver of the three.
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