TALENT tationed at its Shanghai headquarters Department heads and enecutive memb
ID: 383894 • Letter: T
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TALENT tationed at its Shanghai headquarters Department heads and enecutive members were inwolved in regular weeldy meetings and monthly staff bwiefings were conducted for all staff 14 BY FETER LOK AND JO RHODES, UNIVERYST in late 2001,Jon Wu CEO of SuNeNY Optal n Shanghal mesat He had good inajght into tho bulines would impact negatively on attracting and retaining the right When asked sbout this aspect or s CAPABILITY AT SUNNY OPTICAL ohn Wu maintained an open-door policy and encouraged staff to voice their ideas and complaints directly to him He 'modeled the way for his employees. He liked inform exchanges and showed difficulities and setbacks in the past, he had great resilience and AUSTRALIA great emotional intelligence. Despite struggling to retain talent in his firm He expected that the environment and the industry, and new policy of tife employment,' to be Introduced by the which earned him much respect fromm Department of Labour in China over the next few months However, one of Wu's weaknesses was his identified with his staff employees inability to say 'no simply talent for SUNNY·In order to sustain the ruteroe posion in optical retaling in China, Wu took up the challenge to retain and develop human capital as a strategic priority in hs company. coral d that he led new SUNNsphilosophy and value system China's looming talent shortage In 2003, China had roughly 9.6 million gadustes with up to went through a rigorous q From the first day the business started, SUNNY considered product quality, innovation and professional service to be the cornerstones of its business All the products on its shelves eperience, and an additional 97 million the highest technical standards SUNNY guaranteed that all of would qualify for support-staff positions. Despite the products it sold were entered into its tracking system this apparently vast supply of graduates, multinational along with all the buyers' information If the buyers were not organisations and top domestic service companies were satisfied with the products purchased, they could exchange finding that few local graduates had the necessary skills for them for other p service occupations, By 2007, this problem had become even The mission of SUNNY was to become a world leader in greater. As a result, these companies were confroeting many the retailing industry for eyecare optical products and challenges in retaining quality employees Job-hopping was services. John Wu believed that the key to success was reliable common among succesful managers and above-average service, high-quality products and superior cust ormer value. wages and benefits were needed to retain talent Furthermore, he considered that these activities could be enhanced by structured employee learning and development programs to ensure continuous innovation Continuous nnovation would require systematic programs and support Company SUNNY Optical originated in 1956 as a small watch and clock retailing store in Tapel By merging with other similar retail outlets, by 1981 SUNNY had established its name in Taiwan rom the firm, and Wu realised that lear The company initially entered mainland China in 1997. With only four shops, SUNNY lay its footing in the four tier two cities of Wuhan Xiamen, Fuzhou and Guanzhou Once they were consolidated SUNNY expanded quickly into other cities ave learned from this and hope you can do the same. new ideas and making mistakes He made his employees comfortable in working on new ideas by modelling an honest response to fañure: My idea did not work so well and I have wasted time, energy and resources fm sorry for that, but t Wo By 2007, SUNNY had become the biggest Chinese retailer for optical prodcts in the world, with 6io optical reta outlets in Taiwan and 1118 outlets (staffed by 7700 employees) spread across all the major cities of mainland China Its sales Wu found that this approach generated some excellent One new idea suggested by an employee was by the organisation. The idea was t mainland China. its sales enthusiastically received use information technology and internet interfacing to allow revenue had grown exponentially to 18billion yuan (US5300 customers to try on different spectacle frames from the company's online catalogue (different style, sizes, brands one of the biggest optical retailers in the world within three colours, and so on then submit orders to the nearest outlet for fitting and purchase. Although the online experience was still in its developmental stage, this innovation had the billior) per year, and it was projected that SUNNY could be Leadership style Although SUNNY was a family owned company, ia had a flat potential to expand the company's market share even further organisational structure. Senior executives consisted of John SUNNY implemented a structured mentor systemt work teams were encouraged to hold informal functions in order to build up collaboration and support for each other. A special 'collaborator fund (small seed money) could be used for any Wu (CEOL Lee Chu (CFO) and Ming Chen (COO) Ther e w five other heads of departments responsible for sales, research and development, human resources, operations and finance/accounts. A total of 32 other employees were a of these informal functions to enhance the company's networking capabilities. Overall, the organisation had a people-first policy whereby employees who performed well would always be retained by the company, even when downturns occurred in the industry. The company had The life-employment policy in China requires all companies experienced three major downturns in its fifty year history to provide life-employment contracts to indviduals after their econd contract renewal (fie. after two years of continuous full-time yet had limited its redundancy rate to only 4% in total dring these hard timesExplanation / Answer
The case is about challenges related to retention of human resources faced by the Chinese optical company, SUNNY Opticals. Despir following some of the best practices in the industry, te company finds it difficult to retain its employees amidst acute talent crunch and Government's decision to implement the policy of "Life Employment" across the organizations. The main issues faced by the company are
(a) Government's mandate for Life employment.
(b) Difficulty in finding quality employees.
(c) Difficulty in retaining good employees.
(d) Agressive policy of company's management to experiment, leading to too many opinions.
The four areas that are critical for the company's growth need to be addresed on priority. The possible remedies have been listed below.
(i) Restructuring the company's wages and incentives policy to attract and retain the best talent.
(ii) The company's leadership style is affiliative style, that needs to change. There should be more focus on coaching to enhance capacity building and introduction of paticipative style of management where employees can learn by doing, but only after doing little cost benefit analysis instead of jumping on whatever comes in the mind.
(iii) Team building efforts can enhance quality of work and individual contribution, while bonding the employees into productive teams that will increase cohesiveness and reduce turnover.
(iv) Mentoring scheme will enable the youngsters to learn from the seniors through interactive style of working.
(v) Developing belongingness in the employees through various employee benefit scheme that reflect best industry practices, empowering them to take control of the tasks and perform, and helping them to maintain the work life balance.
(vi) Promote brand building of the company as one of the best places of work among the jobseekers.
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