China and India, two of the largest economies in the world, are supported by a large, young workforce that is increasingly well-educated and eager to succeed.

As this dynamic shift in both economies continues, there is now an increasing need for home-grown and western corporations to better harness and develop the talent at their disposal. This is to counter an environment of businesses poaching employees.

Professor Fang Lee Cooke, lead researcher on a project into talent management in China and India, argues that western businesses in China need to understand what talented employees want so they are more likely to retain them. They also need an understanding of the demographic profile of the group of employees they want to attract.

“The western approach to talent management is very textbook. It’s about training people, developing them, motivating them and retaining them. But what is needed, is to tailor the talent management to specific countries or employees,” says Professor Cooke.

For example, in India and China the “western approach” to talent management is restricting potential opportunities.

Harnessing talent

The problems with harnessing talent might be universal but the methods vary from country to country. Generation Y’s notoriety for being career nomads is even more prominent in China and India because of a shortage in the labour market, Professor Cooke says.

“The younger generation of Chinese and Indians are better educated than ever before. They are also not very patient and are eager for success. They will be ready to jump ship to another organisation that offers them a better salary or career path. There is very little loyalty.”

In addition, the definition of talent varies depending on the industry, the type of workers and the country. For example, in hi-tech industries such as information technology, an organisation may classify everyone as “talent”, on account of the level of skills and education employees have. However in manufacturing hubs, only managers and executives may be classified as talent, effectively excluding factory workers.

It’s good experience to work in a western country, but those who leave need be aware they can’t be out for too long.

“The way in which managers in India and China define talent is elitist. Their HR policies will be targeting those people they consider ‘talent’ to get the best out of them,” Professor Cooke says.

Professor Cooke says that Chinese HR policies emphasise the Confucian value of the employees’ moral behaviour. The socialist moral value is embedded in those perceptions of what talents an organisation wants.

“Indian companies, by contrast, focus less on moral behaviours and more on the western approach to talent skills. They focus on the technical side or the professional side when approaching talent management.”

Western companies that recognise the differences between employees in China and India and their western counterparts are beginning to tailor their HR or talent management practices to these employees. However, to a certain extent, they are constrained by their global HR policies.

“Within these constraints they do try to do something about their talent management. Some are more successful than others,” Professor Cooke says.

Forward-thinking Chinese and Indian companies are also looking beyond succession planning and their executive teams when implementing talent management programs.

Better educated talent

Many companies in China and India are expanding so fast they desperately need talent, and many Chinese and Indian migrants are returning home because of the growing opportunities in their countries. While heading overseas to pursue careers was once highly valued, the generational shift has seen wealthier students leaving, and not necessarily the brighter ones.

“It’s good experience to work in a western country, but those who leave need be aware they can’t be out for too long. There is now a greater emphasis on ‘old-school’ networks, with relationships developed in university significantly influencing performance and career. If they don’t have that connection and they’re not familiar with that’s happening in China, they can be quite limited in their opportunities,” Professor Cooke says.

Previously, Chinese graduates who trained in western counties were in high demand when they returned, especially among western international firms. They had good English skills, were more open-minded and better trained.

However as China continues to develop and expand, this is no longer necessarily the case. Graduate returnees need to demonstrate their skills and competences beyond and above those possessed by their home-grown peers in order to get ahead of them, Professor Cooke says.

“Things are changing. Employees are changing. Human resources and talent management practices need to evolve to ensure that companies are getting the most out of their employees and that staff remain challenged.”