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Generation gaps impact HR dynamics in China

By Winter Nie | August 26, 2015, Wednesday | Print Edition

Over a relatively short period of time, no other country has ever achieved as much economic growth as China. But progressing at lightning speed has implications in dividing people that once lived in a land that was relatively free of skyscrapers.

Economic growth has created various divisions throughout China and as more and more multinational corporations try to expand into a newly sought-after mid-tier segment (thanks to the buying power of the new middle class), they are faced with a complex environment when it comes to finding and retaining talent.

Not only is the equilibrium of the supply and demand for experienced executives not yet reached, the type of candidates companies need to succeed is limited. Companies need employees who understand China鈥檚 market and its business environment. At the same time, they also need individuals who are culturally savvy and diplomatic enough to bridge gaps between the local subsidiaries and headquarters as well as between China and the rest of the world.

In order to best understand the situation, which is being popularized with the term 鈥渨ar for talent,鈥 one must understand the background of how certain gaps in China developed.

Recent surveys show that communications tend to break down when a global company鈥檚 headquarters and its regional office have different ideas about what to expect from a manager. Often the two are unaware that their expectations have been subtly shaped by cultural differences.

China has a traditional respect for hierarchy, and it is often taken for granted that decisions flow downward from the top. A junior executive may decide not to act on his own, because he is afraid that whatever he does might interfere with his boss鈥檚 master plan, the details of which he may not have been told about. In the West, individual initiative is expected. Lower ranking executives are encouraged to take charge, act independently, and be creative. When the expectations are not verbally communicated, this can lead managers at the company鈥檚 headquarters to conclude that certain regional executives are not proactive and have to be told what to do. On the other hand, Chinese executives in the regional office may conclude that their superiors are not clear on what they want and avoid responsibility. The result is frustration at both ends of the command chain.

The answer, of course, is that companies need to rise above these issues by paying more attention to culturally different perspectives. Above all, HR and supervisors need to make a special effort to educate new hires as to exactly what the corporation expects and also to examine the underlying logic that shapes the company鈥檚 approach to management.

Rapid social changes

The situation is further complicated today by the fact that China is going through rapid social changes. Private enterprise was only legally allowed in China in late 1979, and it has taken years to fully adapt to an open market economy. As a result, older managers who grew up in the 1960s and experienced the fallout from a planned economy tend to see things with a viewpoint that can be quite different from today鈥檚 youth who grew up in the 1980s and 90s. Young people have experienced much more economic wealth than those born before the 1980s, and thus their attitudes towards life, work and balancing the two are quite different between these age groups.

This generation gap, which some headquarters may not even be aware of, can lead to younger staff becoming frustrated with what they see as an inflexible, old fashioned approach. At the same time, senior managers may be frustrated with a perceived general lack of discipline from their underlings.

These generational and cultural differences mandate that companies must have a deep understanding of employees and people dynamics. And one must proceed with caution when making a generalization about the characteristics of Chinese employees and customers, as much depends on each person鈥檚 age and background.

Solutions will only come from awareness and a greater understanding of different points of view.

Winter Nie is a Professor of Operations and Service Management at IMD.

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