How to increase motivation to improve local staff retention
The number of Japanese companies operating overseas is increasing even more than in Japan, where demand is expected to slow due to population decline. However, there are quite a few cases in which overseas human resource management and system development are not successful and companies are forced to withdraw or relocate.
In this article, we would like to explain the issues of overseas human resource management, and the importance of motivating local staff.
Management issues have been present for many years
According to a survey conducted by the Japan Overseas Enterprises Association in 2016, "Fostering local employees" (73%) was the most popular answer to the question, "What is a major management issue in advancing global management from the viewpoint of the head office?".
The Ministry of Land, Infrastructure, Transport and Tourism says the key points of global human resource management are control and localisation. The term control refers to the common global HR Evaluation System that defines the treatment of global human resources, and the term localisation refers to the establishment of salary standards and welfare programs considering various factors such as the human resources market and the business environment in each region. We believe that a company that has a high level of control and localisation is truly a global company that optimises its business across borders.
In the previous survey, "Fostering local employees" was highlighted as a major management issue. And the next biggest issue was "Establishment of a global human resources & compensation system" (51%), which meant that many companies described recruiting and developing local staff and establishing an HR Evaluation System to be an issue. However, these issues were also cited in a number of similar surveys in 2014. Apparently, it seems that even though we have been aware of these issues for several years, we have not yet developed sufficient global human resource management to improve the treatment of local staff.
Increase retention rate by improving motivation
It is essential to implement measures to increase motivation by mainly improving working conditions as it is one of the best ways to increase the retention rate of local staff,. The aforementioned survey indicated that improving the motivation of local staff has not been successful thus far. For example, some staff left because they were dissatisfied with the difference in treatment between them and the Japanese head office employees, whilst others did not feel that their careers could progress because the Japanese workers held the key roles.
If the head office or a Japanese expatriate holds on to the belief that the local staff must simply do as they are told, the local staff will not be able to see how they can increase their salaries and further their careers, which will lead to them losing motivation and resigning quickly.
Improving HR Evaluation Systems and Strengthening Communications
So what does it take to motivate local staff? Three measures can be considered mainly from the perspective of improving HR Evaluation Systems and facilitating communication.
Sharing clear policies and visions
The first measure is to share the management vision of the head office with the local community. The Ministry of Land, Infrastructure, Transport and Tourism defines human resource management as "Activities to achieve the vision of management through human resources". This is about hiring the right global human resources to achieve the company’s vision, then translating that vision of management and corporate strategy into English and the local language for all to understand.
Appropriate HR Evaluation
Setting up an appropriate HR Evaluation System based on the awareness of local staff, giving a structure of how to attain an increase in salary or a promotion is also desired. Providing a clear career path and HR Evaluation System to your local staff will help you increase their motivation.
It is also necessary to strengthen communication between the head office and the local branch office, as well as between local staff and Japanese expatriates. Sharing the management’s vision and company strategy as well as setting up an appropriate HR Evaluation System will strengthen the relationship between headquarters and the local branch office. Other possibilities include conducting pre-assignment training so that Japanese expatriates will not disregard the local staff, enhancing the English language skills of the Japanese expatriates, and setting up some events to deepen the friendship between the Japanese expatriates and the local staff.
An HR Evaluation System that leads to corporate growth
Managing the local staff, especially improving their motivation, is easier said than done. However, as mentioned in this article, it is an urgent task in order to increase the motivation and retention rate of the local staff. Developing and retaining human resources will lead to corporate growth.
In order to succeed in global business development, we should work on the establishment of systems, starting with an HR Evaluation System. If you still are not sure of how to proceed with the measures, perhaps it would be a good idea to seek the help of external companies such as HR consultancy firms.