Thesis How do private enterprises retain core employees?

This article takes Guangdong Zhengyuan Accounting Firm as an example to systematically and in-depth analyze the current situation of private enterprises in my country, analyze the needs and incentive mechanisms of core employees, and discuss how to retain core employees of the enterprise, so as to further develop and expand private enterprises. Provide helpful suggestions. Keywords private enterprises; core employees; incentive mechanism 1. Background analysis In the past two decades, China's economy has grown rapidly and its economic structure has become increasingly perfect, in which the private economy plays an increasingly important role. According to relevant statistics, there are more than 2 million private enterprises in China alone. After China's accession to the WTO, a large number of multinational companies entered the Chinese market, competition among peers became increasingly fierce, and the development of private enterprises faced tremendous pressure. The source of enterprise competitiveness mainly lies in the active factors within the enterprise, of which the enterprise's human capital is the core. It not only participates in the enterprise's input, output and market activities as a production factor, but also allocates and manages production factors and various operating links. Competition between enterprises is ultimately a competition for talents, or more precisely, a competition for core talents. Steel king Carnegie once said: "Take away my factory, take away my railway, take away my ships, take away my money, even take away everything from me, but as long as I keep my core staff, I will To regain everything lost within one or two years. "As the core competitiveness resource of an enterprise, human capital, the intelligence and physical strength contained in core employees is the most important. "Core employees refer to those employees in the enterprise who have specialized skills, control the enterprise's core business, control the enterprise's key resources, have insight into the enterprise's business secrets, and have a profound impact on the survival and development of the enterprise, including senior managers, R&D backbones and other knowledge innovators workers, senior technical workers, etc.”①. They generally have the following characteristics: closely related to the company's core technology and management; promoting the company's technology and management level; expanding the company's market share and improving the company's operating conditions. Generally speaking, the core employees of an enterprise will account for 20%-30% of the total number of employees in the enterprise. They concentrate 80%-90% of the enterprise's technology and management, and create more than 80% of the enterprise's wealth and profits. They are the backbone of the enterprise. and core. With the entry of ①Wang Peigen, Li Li: "Discussion on the Accumulation of Core Talent Resources in Modern Enterprises", "Enterprise Reform and Development", Issue 4, 2004. With the full entry of foreign-funded enterprises in the 2nd century, competition continues to intensify. Facing increasingly powerful opponents, core employees have become the main competition targets in the talent market. They have many opportunities to "change jobs". Once they "change jobs", The losses to businesses are often difficult to estimate. "Objectively speaking, the best people will find it easiest to leave their jobs. Those who give up their positions are often outstanding talents, such as the company's supervisors, managers or technical experts. They are the core employees of the company and may be the key to the company's current and future The key to success”②. The loss of core employees has a huge impact on the normal production and operation of the company, causing instability in the company's management, affecting the company's development strategy, and having a direct negative impact on the operation and management of private companies. Therefore, private enterprises must consider retaining core employees from the perspective of the company's sustainable development strategy. From February to March 2006, the author conducted an internship in the Administrative and Finance Department of Guangdong Zhengyuan Accounting Firm Co., Ltd. for nearly a month. Guangdong Zhengyuan Accounting Firm Co., Ltd. is a small and medium-sized private enterprise established in 2003. It is mainly engaged in registered capital verification, bank mortgage loan asset verification, accounting statement audit, asset and liability audit and financial revenue and expenditure audit and attestation; corporate management, Auditing, accounting consulting and other services. The company's internal organizational structure consists of the administrative and financial department, business development department, audit department, tax agency department, technology department, and evaluation department. The general manager's office is directly under the jurisdiction of each department. Its internal practicing staff includes 23 certified public accountants, 5 certified estimators, 9 certified tax accountants, 6 certified asset appraisers and 7 real estate appraisers. Examining the human resources situation of Guangdong Zhengyuan Accounting Firm Co., Ltd., those professional practitioners are knowledge employees. With their professional knowledge, experience and rich customer resources, they control the company's core business, together with other senior management of the company People are the core employees of the enterprise. Therefore, retaining these core employees has become the key to the firm's competitive success. Based on the analysis of the actual talent resources of core employees of Guangdong Zhengyuan Accounting Firm, this article puts forward some thoughts on how private enterprises can retain core employees, hoping to provide some reference for the core talent management of private enterprises.

2. Analysis of the reasons for the loss of employees in private enterprises The competition for talents is so fierce that it is necessary for private enterprises to find out the root causes of the loss of core employees. Based on the analysis of the actual situation of Guangdong Zhengyuan Accounting Firm Co., Ltd., the author believes that the reasons for employee turnover in private enterprises in my country mainly include the following four aspects: (1) Employee personal factors Usually, those who leave private enterprises are often core employees. Compared with ordinary employees, core employees of private enterprises have the following personality characteristics. Taking the author's internship unit, Guangdong Zhengyuan Accounting Firm Co., Ltd., as an example, most of its core employees are knowledge workers. First of all, because they have professional knowledge and skills, have rich industry experience, know the importance of their own value to the enterprise, have a strong sense of autonomy, and are loyal to themselves ② Zhao Shuming: "Research on Human Resource Management Strategies of Chinese Enterprise Groups" ", Nanjing University Press, 2003 edition. 3 career, not limited to development in one company. Secondly, they have a strong sense of professionalism, attach great importance to improving their own quality, have a strong willingness to learn, and are eager to obtain re-education and training opportunities to improve their competitiveness. If the company cannot meet their needs, they are likely to choose to change jobs. Thirdly, they hope to be recognized and respected by society and have higher pursuits of work and life. Once they encounter better development opportunities, they are likely to choose to leave. Finally, they have a strong desire for achievement, have very clear career goals, are eager to achieve a personal career, require more autonomy and decision-making power at work, and hope to participate in the business management of the company and become partners with the company. nature relationship. (2) Internal organizational factors There is a general misalignment between the internal organizational factors and the requirements for retaining core talents in private enterprises in my country, which are specifically reflected in the following three points: 1. The salary system is unreasonable. The wages and benefits provided by private enterprises to talents are generally low, and many private enterprises want to use the lowest remuneration to obtain the knowledge, technology and experience of talents. Of course, compared with state-owned enterprises and foreign enterprises, private enterprises have greater pressure on policy funds and hope to reduce labor costs to the maximum extent and make up for competitive disadvantages. But in this way, talents will not be satisfied in terms of material rewards to a large extent. 2. High work pressure and lack of humanized management. Because private enterprises face great pressure for survival and development, they always hope to maximize the existing resources of the enterprise. Therefore, in private enterprises, it is basically a high-intensity and fast-paced working environment. When employees work in a highly stressful environment, the quality and efficiency of their work cannot be guaranteed for a long time. Take the two companies where the author interned in the summer of 2004 and 2005: Suning Appliance and Kelon Electric as examples. These are two relatively large-scale private enterprises of home appliances, but there are still some deficiencies in their work design and management. For example, during peak business seasons, employees work overtime for long periods of time and lack humanistic care, resulting in a large number of employee losses every year. 3. Internal management is imperfect. Most of my country's private enterprises are small and medium-sized family-run enterprises, which lack clear corporate development goals and have imperfect management systems. There are two problems here: First, private enterprises lack clear development goals, which makes talents feel that they have no development prospects in the enterprise and lack a sense of security. Secondly, private enterprises have chaotic management, unclear job responsibilities, lack of basic management systems, and poor execution. Many systems are changed day by day, which can easily dampen employees' work enthusiasm. At Guangdong Zhengyuan Accounting Firm Co., Ltd., the company's leadership is mainly composed of the five early partners. There are some problems in the management incentive system, practice environment and operating system. Due to the company's insufficient investment in training funds and the lack of an effective training mechanism, most of the company's employees mainly recharge their batteries after work and learn and improve independently. In addition, the company's business is cyclical. During peak business seasons, employees need to work overtime for long periods of time and the work pressure is very high. For a long time, the company's employees have not been very loyal to the company and it is easy to leave. (3) Social factors 4 Guangdong Zhengyuan Accounting Firm Co., Ltd., like other firms, has a group of certified public accountants affiliated with the company. This type of employee wanders around several units, working several jobs. When better job opportunities come, they may choose to leave. It can be seen that social factors also play an important role in the loss of core employees. The social factors that affect employee loss mainly include policies and regulations, social culture, traditional habits, and labor market supply and demand conditions. Among the social factors affecting brain drain, an important flaw is the lack of credit mechanism.

Society's credit is based on personal credit, and honesty and trustworthiness should be the basic principles of life. However, from the current society as a whole, we do not yet have an effective credit mechanism. Many people believe in the concept of "people go to higher places, and water flows to lower places" and are indifferent to the losses caused to the original enterprise. Huang Hongsheng, chairman of the board of directors of Skyworth Group, once said: "I am not afraid of job-hopping. What I am afraid of is lack of trust and lack of rules." (4) Economic environment According to an employee satisfaction survey conducted by Guangdong Zhengyuan Accounting Firm Co., Ltd. last year It shows that excessive overtime is one of the main reasons for the high turnover rate in accounting firms. Firm employees have strong needs for four dimensions including work remuneration and benefits, work expectations and work pressure, education and training opportunities and professional development. After joining the WTO, a large number of multinational companies have joined the competition. The trend of global competition for human resources has become increasingly obvious. Competition among enterprises has intensified, especially the competition for talents. Enterprises poach each other in the hope of obtaining the best talents. “Among the three types of ownership enterprises, the overall level of incentives provided to managers, the level of developmental remuneration and the level of material remuneration provided to managers are all ranked from high to low in foreign-funded enterprises, traditional state-owned enterprises and private enterprises. Form”①. Most private enterprises are still weak compared to other types of enterprises. In order to better implement China's localization strategy, many foreign-funded enterprises will not hesitate to use all power and means to attack the core employees of weak private enterprises, and employees will choose to be more High remuneration, better job opportunities and development space have also resulted in the loss of some core employees of private enterprises. 3. The impact of the loss of core employees on private enterprises. Talent resources are the cornerstone of an enterprise's survival and development. The impact of the loss of employees on an enterprise is mainly reflected in: (1) Cost losses. The loss of employees first causes cost losses to the enterprise. It mainly includes the following aspects: 1. Historical costs refer to the expenses incurred on resigned personnel, including: recruitment expenses, onboarding guidance, training expenses, etc. 2. Replacement cost refers to the cost required to fill the vacancies of the original employees. ① Zhang Yichi: "The Impact of my country's Enterprise Ownership on Employment Relations from the Extended Incentive-Contribution Model", "Management World" Issue 12, 2004. 5 3. Opportunity cost refers to the difference in performance between new employees and resigned employees and the indirect cost losses caused to the enterprise by employee turnover. In particular, the loss of a core employee of an enterprise will affect the projects he was originally responsible for, thus causing long-term and huge indirect cost losses to the enterprise. (2) Reducing work performance In Zhengyuan Accounting Firm Co., Ltd., cultivating an excellent professional practitioner requires a lot of financial and material resources. Once they choose to change jobs, the company has to pay to fill their vacancies. Moreover, in the short term, It is difficult to find replacement business experts, causing direct losses to the company's current business. In addition, their departure may also take away the company's core information and major customer base, which will have a major impact on the office's operations. If resigned employees seize better job opportunities, it will also have a negative impact on other employees of the company. In addition to causing cost losses to the enterprise, employee turnover will also have a negative impact on the overall performance of the enterprise. 1. Negative attitudes before employee turnover will reduce the quality and efficiency of work during that period. 2. The loss of employees may lead to the loss of business data and market. When technical personnel are lost to other companies, they may take away the technical experience and information of the original company. The loss of sales personnel often takes away core customer resources, causing the company to lose its existing market and reduce its market share. 3. Employee turnover will have a negative impact on interpersonal relationships within the company. For example, the loss of core figures in a work team will lead to a decrease in the efficiency of the team and have a negative impact on team cohesion. 4. Strategic choices for enterprises to retain core employees (1) Analysis of the basic needs of core employees. The need hierarchy theory of American psychologist Maslow (Maslow, 1943) shows that the needs of employees are complex and diverse, and the needs of different employees are also different. Similarly, even for the same person's needs, corresponding changes will occur at different times, spaces and external conditions. If private enterprises want to effectively motivate the company's core employees, they must have a comprehensive understanding of their employees' needs.

1. Demand for high salary “Whether it is ordinary employees or senior managers, the most popular form of incentive is material incentives. As high as 74% of senior managers choose material incentives, and 58% of ordinary employees choose multiple options. The highest proportion of choices can be considered that among private enterprises, profit incentives are the first demand”①. Taking into account the current national conditions of our country, when faced with the high housing prices in Chinese cities and the pressure on core employees such as medical care, pensions, and children's schooling, the motivating effect of salary is very obvious. High salaries have a strong impact on the core employees of domestic enterprises. motivating effect. The famous economist Xiao Zhuoji pointed out that the key to solving the current problem of enterprise competitiveness is high wages for senior managers and technical personnel. ① Yang Lei: "Research on the Effectiveness of the Operation of Management Mechanisms of Private Enterprises", "Nankai Management Review" 2005 Issue 5. 6 Balance the value they create with their income. 2． The need for autonomous work, self-development, and self-realization. As core employees of an enterprise, their working situations are highly uncertain and they have greater flexibility in their work. This requires core employees to make timely adjustments according to specific circumstances. In terms of work processes, standards, methods, and schedule arrangements, it is best for core employees to manage, supervise, and implement themselves. The value of core employees determines their higher pursuits. Through the learning of new knowledge and new technologies, I can enhance my own value, have higher requirements for career planning and development, and hope to achieve my career through hard work. 3. Enterprises and leaders agree that for managers, this is a prerequisite for promotion; for business experts, this is an affirmation of their abilities and qualities, and it is also the basis for further broadening their development space; and for technical employees, this is their skills affirmation and recognition of its technological innovation work. These recognitions are the basic prerequisite for the further development of core employees. 4. Good working environment and corporate culture A good working environment and harmonious working atmosphere are the basis for retaining core employees. A positive and healthy corporate culture of private enterprises can gain employee recognition, cultivate employee loyalty, and is conducive to corporate spiritual and emotional retention. (2) Basic countermeasures for enterprises to retain core employees - establishing an incentive mechanism for core employees. According to research by Professor William James of Harvard University, employees' potential is only exerted by 20%-30% in an environment lacking incentives. In a good motivating environment, the same people can achieve 80%-90% of their potential. “The so-called incentive mechanism for core employees, in addition to the usual performance bonuses, allowances, benefits and other measures, must have an institutional guarantee that combines the personal interests of employees, especially professional managers, with the interests of the company, especially Long-term interests are bundled together, allowing individuals to profit from the development of the enterprise, thus forming huge cohesion and driving force."① “Therefore, the key to improving the competitiveness of enterprises is to create a fair competition environment within the enterprise, linking department and individual performance evaluation and competitiveness improvement with correct evaluation orientation and effective incentive methods, so as to promote enterprises to form active competition, self- A restrained and positive atmosphere stimulates employees’ intrinsic motivation to create value and their enthusiasm for continuous innovation”②. 1. First of all, build a distinctive corporate culture. The famous American management scholar Pascal pointed out in "Japanese Management Art": "Unique values ??are very important for all enterprises, and may be the most secret secret weapon of large companies." ③. "In a sense, corporate culture is the soul of an enterprise and the source of its cohesion and vitality. Enterprise ① He Zhiyi: "Private Enterprise Cases", Peking University Press, 2003 Edition, page 185. ② Peng Lihong: " Development of Private and Small and Medium-Sized Enterprises", Economic Science Press, 2004 edition, page 224. ③Zhao Shuming: "Research on Human Resource Management Strategies of Chinese Enterprise Groups", Nanjing University Press, 2003 Edition, page 240 7 Culture can empower employees. Establishing a common set of values ??and codes of conduct creates strong cohesion and centripetal force within the enterprise, enabling employees to develop a sense of self-discipline and self-motivation."① A positive, healthy corporate culture that is conducive to corporate development has a guiding function. Therefore, our country's private enterprises must establish a good and distinctive corporate culture according to their own conditions. When all members of an enterprise are convinced that the business they are engaged in has good development prospects and opportunities to realize their own value, they will maximize their potential.

Private enterprises create a democratic, equal and harmonious working atmosphere within the enterprise by building a corporate culture with their own characteristics, so that the personal values ??of core employees can be consistent with the corporate goals. The corporate culture construction of Guangdong Zhengyuan Accounting Firm Co., Ltd. should focus on cultivating the sense of belonging and loyalty of core employees, so that core employees can identify with the core values ??and business philosophy of the company, generate a sense of identification with the company, and inspire greater enthusiasm among core employees. Enthusiasm for work. Establishing a common development vision for the company and employees and integrating employees into the corporate culture are the core of retaining talents. 2． Secondly, establish a salary system that is as fair and reasonable as possible. According to Adams' equity theory, whether a person is satisfied with the remuneration he or she receives depends not only on the absolute value, but also on comparison with society, history, and people around him. The salary system embodies the company's material incentives for employees and can attract the human resources needed to retain and motivate the company. “An motivating salary system is one of the core contents of an enterprise’s incentive mechanism” ②. Therefore, Guangdong Zhengyuan Accounting Firm Co., Ltd. must treat all employees equally and establish a unified reward and punishment system. Otherwise, it will have negative effects and affect employees' emotions and work attitudes. If private enterprises want to retain talents, they must establish an effective salary system. Specifically, it includes the following two aspects: First, the salary design must be scientific, fair and reasonable. When designing a salary system, it should be able to indicate the full source of value of the salary so that employees know the basis for their compensation. Remuneration should be linked to individual performance and be fair, just, reasonable and reasonable. Second, introduce a modern incentive mechanism—the stock option system represented by the United States. The stock option system has two motivating effects on core employees: first, compensation and income incentives. Under the stock option system, if the company operates well, the price of the company's stock will rise, and core employees can obtain good returns through the rights conferred by the stock option system. The second is ownership incentives. When core employees buy the company's shares, they become the company's shareholders. As owners, of course they also hope that the company can run better and achieve more profits. In this way, the stock option system links the behavior of core employees with the interests of the company's shareholders. Although the vast majority of private enterprises in our country do not implement standardized shareholding systems, they can learn from the incentive effect of the stock option system, implement diversification of corporate ownership structures, and develop new types of partnerships, stock options, employee stock ownership, and technology stockholding to provide long-term opportunities for talents. ① Zhang De: "From Scientific Management to Cultural Management - The Softening Trend of World Enterprise Management", "Journal of Tsinghua University", Issue 1, 1993. ②Hu Xiaode: "Analysis of Human Resource Management of Small and Medium-sized Enterprises", Economic Science Press, 2004 edition, page 301. 8 Being linked to the business development of the company can still help retain core employees. 3． Improving the satisfaction of core employees' motivating factors. American psychologist Herzberg (1957) proposed the two-factor theory, which divides human behavioral motivation factors into two categories: health factors and motivating factors. Therefore, the two-factor theory believes that in order to mobilize people's enthusiasm, we must work hard on motivation and satisfaction. On this basis, the author proposes specific countermeasures for private enterprises to meet the motivational factors needs of core employees: (1) Provide challenging job opportunities. Compared with ordinary employees, core employees pay more attention to their own value and expect to be recognized by company leaders and colleagues. . They are not satisfied with completing routine tasks passively. Therefore, they are more enthusiastic about challenging work and regard challenges as a kind of work pleasure and a way to realize self-worth. A survey of 100 successful companies in the United States showed that they have many similar practices in providing challenging work to core employees. Specifically, they include: giving core employees greater work autonomy, so that core employees can At work, you can do what you want to do, use your intelligence and talents, and gain a sense of accomplishment from your work. Taking Guangdong Zhengyuan Accounting Firm Co., Ltd. as an example, the company should provide internal certified public accountants and other core employees with opportunities to participate in core business and challenging work. (2) Establishing dual career pathways In contemporary times, professional and technical core employees account for a relatively large proportion of enterprises. Among these core employees, some hope to be promoted to managers through hard work; others only want to be promoted professionally. In view of this, companies should establish dual career paths and provide core professional and technical employees with the same career development opportunities as managers.

Research and practice have shown that this approach can not only make employees feel valued by the company and increase their loyalty, but also enable the company to match people with jobs and improve the company's human resource utilization rate. According to the human resources situation of Guangdong Zhengyuan Accounting Firm Co., Ltd., some CPAs hope to become the backbone of the company's business, and some employees hope to develop into the company's management. The company should provide opportunities to satisfy these wishes of core employees. (3) Establish a cohesive work team and establish an efficient team with core employees as the main body. On the one hand, through formal and informal communication among team members, we can understand each other’s views, opinions, and opinions. Employees can feel other people’s personality characteristics and work styles, and employees can share each other’s understanding of work and things. Experience and feel. On the basis of communication, team members can enhance mutual understanding and help each other, thus forming team cohesion. On the other hand, the cohesion of the team is conducive to forming a good corporate culture atmosphere, improving the overall competitiveness of the company, forming a virtuous cycle, and driving the company to continue to develop. This kind of team building is a zero-cost incentive method to increase the loyalty of key employees. In view of the human resources situation of Guangdong Zhengyuan Accounting Firm Co., Ltd., establishing a working team with core employees as the main body 9 will help the company's business development and form a good working atmosphere and strong team cohesion within the company. (4) Provide a working environment that core employees like and a good working environment, including working atmosphere, work space, employee relations, etc. Providing a working environment that employees like will not only make employees feel comfortable, but also promote the improvement of work efficiency. What is even better is a humanized working environment that meets employees' wishes and has a positive effect on the rhythm of work. At the same time, a good working environment can improve employee satisfaction and reduce the risk of employee turnover. (5) Conduct regular employee satisfaction surveys to keep abreast of employees’ psychological dynamics, including their latest views, opinions and suggestions on the company, as well as work status, work emotions, personal life difficulties, etc., and provide feedback on the survey results as soon as possible. and take effective improvement measures. 5. Conclusion In short, in today's era of knowledge economy, private enterprises should adopt corresponding methods to avoid the loss of core employees based on their actual specific conditions. The competition between enterprises is ultimately a competition for talents. Paying attention to the role of core employees, establishing a scientific and effective human resources management system that is people-oriented, giving full play to the creativity of core employees and tapping their potential are crucial for private enterprises to compete in the increasingly fierce market. key to survival and continued development. References: [1] He Zhiyi: "Private Enterprise Cases", Peking University Press, 2003 edition. [2] Hu Xiaode: "Analysis on Human Resource Management of Small and Medium-sized Enterprises", Economic Science Press, 2004 edition. [3] Jiang Hong: "Research on the Incentive Mechanism of Enterprise Core Employees", Master's Thesis of Wuhan University, October 2003. [4] Peng Lihong: "Development of Private and Small and Medium-sized Enterprises", Economic Science Press, 2004 edition. [5] Wang Peigen, Li Li: "Discussion on the Accumulation of Core Talent Resources in Modern Enterprises", "Enterprise Reform and Development", Issue 4, 2004. [6] Wang Xiaohui: "Overview of the Seminar on China's Private Economic Development and Enterprise Competitiveness", "Management World" Issue 1, 2003. [7] Wang Xiaojuan: "Exploration of Talent Incentive Mechanism in Private Enterprises", "Journal of Zhejiang Gongshang University", Issue 6, 2004. [8] Wang Xuehua: "Analysis on the Mechanism and Effectiveness of Building the Core Employee Team of Enterprises", Master's Thesis of Nanjing Normal University, May 2003. [9] Yang Lei: "Research on the Effectiveness of the Operation of Management Mechanisms of Private Enterprises", "Nankai Management Review", Issue 5, 2005. [10] Zhang De: "From Scientific Management to Cultural Management - The Softening Trend of World Enterprise Management", "Journal of Tsinghua University", Issue 1, 1993. [11] Zhang Yichi: "The Impact of my country's Enterprise Ownership on Employment Relations from the Extended Incentive-Contribution Model", "Management World" Issue 12, 2004. [12] Zhao Shuming: "Research on Human Resource Management Strategies of Chinese Enterprise Groups", Nanjing University Press, 2003 edition. 10 Acknowledgments As I am about to finish my bachelor's thesis, I would like to express my sincere gratitude to those who have helped and supported me.

First of all, I would like to sincerely thank my thesis supervisor Tong Xun for taking time out of his busy schedule to guide my thesis writing. He also gave me great help in the topic selection, data collection, writing ideas, content modification, etc. The rigorous, realistic and conscientious style is an example for me to learn from. At the same time, I would also like to thank the other teachers in Nanshen for teaching me comprehensive knowledge and principles of life during the four years of college. 11 Secondly, I would like to thank my classmates Wu Zhongjian and Liu Hong. During the writing of the thesis, they gave me a lot of help in data collection, text correction, etc. I would also like to take this opportunity to thank my parents and family, without whose long-term material and emotional support it would not have been possible for me to complete my college studies. Wen Shiwei May 2006