Many organizations in China report that they are under performing in terms of revenue, growth and profit expectations. A key reason for this is the challenge that Chinese organizations are facing in the area of talent retention. The skills shortage in China means that salary bills are soaring as key employees hop from job to job, attracted by ever higher wages.

It is now clear that on its own, pay is not an effective tool for employee retention. Hay Group argues that in order to retain key staff, organizations must resist the temptation to use ever higher salaries as the primary employee retention tool. Instead they should focus their attention on two key areas. First, they must look at how they can increase employee engagement. Then they need to provide better support for success of their employees.

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