U.S. companies large and small understand retention of talent and skilled labor makes a difference in company performance as well as the quality of goods and services delivered. To this end, many companies have initiated screening processes, advanced training, potential success monitoring programs and various benefit and incentive programs to hold onto star performers. However, the process of employee retention works very differently in other countries.
Some of the difference is due to culture, while other variances have more to do with artificial influences on the labor market in a given country.
The German labor market integrates an educational system that dictates from a very young age which career category a person will go into. Unlike the American philosophy of letting people choose their path, German school systems identify those children who have an aptitude for high-level thinking early on. Those who don’t score well are steered towards trades and manual careers where the ability to understand a formula is not such a critical factor.
Once in a path, all students gain extensive training in their roles. Because of this, young hires come out of the school and university system already pre-trained for their career paths. This makes retention of individuals in German companies fairly easy since employees are indoctrinated to know what their path is. In other words, an engineer will always be an engineer. A car mechanic will always stay in a car mechanic position. As a result, retention is not so much an issue in many German companies because the culture and system has a comparable replacement right behind an employed person.
Mexican company retention is generally a free-for-all. There are very few employment positions that people play a critical role in outside of government. As a result, companies generally raid each other for key people or they bring in hires from the outside. Those who understand the system well, who build their networks and connections, and who play the gift game can move around easily. Retention of star performers is generally managed by high salaries and perks. Money matters and companies that pay the best hold onto their best people. Otherwise, a competitor buys the person out.
For many decades when an employee landed a position in an Indian company, he stayed in it and promoted internally. However, when high tech businesses and industries began setting up shop in India in the 2000s with far higher wages, the entire culture of jobs-for-life changed.
Suddenly, there was high demand for skilled labor, which India has an abundance of due to a high standards educational system. Tech companies were finding themselves having to offer higher and higher wages as employees moved from company to company landing jobs. Retention of such labor resources became highly competitive, the antithesis of what India had been for years. Aside from salary offerings, Indian companies are now creating long-term benefit packages as well as stock-option plans for employees that stay on. Promotions are also a big attraction since moving up the career ladder is considered a highly-sought, social prize among Indian professionals.
A global labor market is becoming more and more apparent as countries and their employees are becoming connected through multi-national companies and markets. Language is still a temporary barrier, but top labor is becoming harder to retain. Yet those countries that offer more than just a paycheck tend to do better. Ultimately, good labor will go where they can build lives and success, so understanding this important fact can help guide the crafting of retention policies.