Where would you expect to find the world's most innovative talent-development program or a meld of big data and artificial intelligence together predicting employee resignations with 95% accuracy? Your answer probably would not be China, but think again.
While dreadful personnel management practices, as well as dangerous labor abuses, can still be found in the country, it would be a pity to ignore the innovation going on.
Chinese companies have been the quickest to adopt new technologies such as big data, artificial intelligence and talent analytics. Their innovative human resources practices can bring a fresh perspective from one of the world's most dynamic markets.
It is no secret that China's employers face a large challenge. Annual workforce turnover can be as high as 30%. Employee loyalty is low; with staff no longer bound to their employers by the pre-reform "iron rice bowls" of job and benefit security, they can shop around for better pay and conditions. Employers are forced to go to great lengths to provide the right incentives and prospects to keep talent.
China's huge population and immense workforce is transforming, too. Change is being driven by a rapidly expanding middle class, technological development and the new millennial generation. As this group comes of age, its members are making clear that they are not satisfied with just having a job. Employers need to satisfy the needs of employees who have become more demanding than ever before.
China, meanwhile, has embraced digitalization, including big data, artificial intelligence and cloud computing more quickly than most developed economies. A big challenge is how to close the widening gap between what universities and colleges can teach and what technology companies need. Employers have to rely on new tools and practices to keep their employees up to date.
Chinese digital giants Baidu and Tencent Holdings have taken the lead in technology-driven HR. According to an assessment by the U.S.-based Association for Talent Development, Tencent has developed the world's most innovative talent-development program. The Baidu Talent Intelligence Center, meanwhile, is leading the way on applying advanced big data and AI capabilities for smart HR.
Baidu started exploring the use of big data and AI for HR in 2013. Its Talent Intelligence Center relies on a data pool covering more than 100,000 current and former employees. Traditional HR information, such as pay and performance, is combined with unstructured data from social-media platforms and text analysis of emails, corporate communications and chats.
During a 2015 pilot, the center identified 30 employees as likely to leave the organization within three months and 29 of them did. The center also offered its analysis of their reasons for leaving, giving the company an opening to head off the resignations of other staff members. Baidu says analysis by its center has helped to improve its staff retention rate, but it has not disclosed figures.
Tencent's HR Big Data Team has developed a similar application that can make predictions over a time frame of just one month. Not unlike Baidu, Tencent has acquired data across more than 100 indicators, including deep analysis of employees' online comments to colleagues and the company, as well as dining hall payment card balances and speed of use.
To help keep staff, Tencent has developed a sophisticated digital learning environment, drawing participation from around 90% of employees. Established in 2007, the Q-Learning mobile learning platform focuses on skill, mindset and culture training. Leveraging its experience as a leading social communication and gaming company, Tencent's philosophy for the platform is to make training convenient, funny, short and continuous.
Based on these concepts, Tencent has developed a large database of videos, each no longer than 20 minutes, which describe the development of successful products like WeChat. There are live video classes led by popular instructors like the director of the TV program "Voice of China." Other skills are taught via games based on popular comics. The Q-Learning platform, in turn, analyzes the most popular courses and search queries, as well as user activity to improve the training experience and ensure it is creating value for employees in addition to keeping them up to date on the newest technologies and skills.
Like Baidu, Tencent says its HR strategies have reduced staff turnover, but it has not disclosed specifics. Company officials say that the online training programs have had a positive impact on product development and other business areas, and has improved employee satisfaction levels and acted as an attraction for new recruits.
Tencent and Baidu are also looking to sell their new expertise in digital HR. Baidu's Talent Radar, a tool that uses big data and AI to identify hot spots for recruitment in any sector, has been marketed to third parties. Tencent, meanwhile, has fielded many queries about its online learning systems from local and multinational companies.
Tencent and Baidu are certainly ahead of the pack globally in smart HR. Other Chinese companies are looking at these champions not only in regard to their disruptive product offerings but also in relation to how they manage the workforce of the future. Moreover, Tencent and Baidu know all too well that their core competitive advantage lies in their talents. If they want to have a sustainable future, smart HR is a necessity.
Mark Greeven is associate professor for innovation, entrepreneurship and strategy in Zhejiang University's School of Management.