Managing employee turnover in China

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School of Business | Master's thesis
International Business
Kansainvälinen liiketoiminta
Degree programme
OBJECTIVES OF THE STUDY: Many international companies are facing challenges in retaining their top talent in the Chinese talent war. This single case study provides a description on how voluntary employee turnover is managed in a Chinese subsidiary of a Finnish multinational enterprise. First objective of this study aims at explaining why Chinese employees stay in or leave the company. The second goal is to analyze how multicultural context affect the adoption of different retention practices and how they are received by Chinese employees. THEORY AND METHOD: Employee turnover has been researched in Western context quite extensively, however, currently Asia offers unique and interesting field for study due to the high volatility of workforce. The theoretical framework of this study suggests that employee's job embeddedness (fit, links, and sacrifice) interacts with organizational commitment, job satisfaction and retention practices and higher job embeddedness results in stronger will to stay in the company. The employee can, however, make a decision to quit based on plan, comparison or after violation of aspects of job embeddedness. Therefore, employer can influence only partly the turnover behavior of its employees. This study uses a single case study method to map out retention practices implemented in the Case Company and their effects on different employee groups. Interviews were conducted with both Finnish and Chinese HR and business managers. Also, data from exit interviews and employee engagement surveys were used to reason why employees leave or stay in the company. FINDINGS AND CONCLUSIONS: Turnover behaviour of Chinese employees is affected especially by closest supervisor, available career development opportunities, employee's fit with the community and organizational culture, and fair rewarding and compensation. Finno-Chinese context creates unique mix of Finnish and Chinese culture where the nature of retention practices are strongly affected by Finnish relational commitment building HR. However, the implementation is in the hands of local HR and management. Managing employee turnover is a process consisting of employee selection and integration, skill development, training and coaching, and continuous measuring and monitoring of the results of the process.
voluntary employee turnover, employee retention, international human resource management, China
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