The continuous liberalization of the capital market in mainland China provides many opportunities for international institutional investors. The long-awaited exchange-traded fund (ETF) connect scheme between Hong Kong and mainland China began July 4, 2022, with aggregate debut trading volume amounting to RMB28.5 billion (US$4.25 billion). In addition, a new initiative, “Swap Connect,” was announced to allow mutual access between Hong Kong and mainland China’s interest rate swap markets. These two initiatives mark a major milestone in the ongoing market opening of the mainland China capital market and for the participation of overseas investors in local ETFs and derivatives, on top of the existing access to equities and bonds.

In our recent white paper “The Future of Asset Management in Asia,” investors in mainland China and Hong Kong showed a preference for a more risk-aversive approach, as well as an interest in ETFs (42% for mainland China and 52% for Hong Kong) in the next 12 months. With increasing global volatility driven by the Ukraine-Russia conflict, most investors in mainland China and Hong Kong are moving investments into lower risk options as well.

With the ongoing market volatility and uncertainty, how should overseas asset managers tap into the Greater China region?

Credibility and performance

Most global asset managers can capitalize on their international experience in different investment strategies, including ETFs and derivatives, to enable investors to explore untapped and forward-thinking opportunities. Building a strong narrative through targeted communications can help differentiate from other peers and help investors achieve risk-adjusted returns. 

No surprises for investors

Transparency in communications is key, and our report showed that it is an important trait for overseas asset managers. In addition to communicating transparently on fees and performance, managers also need to elevate their communications strategy to articulate their corporate vision, mission and purpose, as well as their long-term commitment to serving investors in the region. The ‘good old days’ of wooing Asian investors with a parachute tour by star fund managers are long gone. Investors want more regular and meaningful communications, be it through their relationship managers or via social and digital communications.

Invest well and do well

Recent greenwashing scandals have led to investors asking questions about the credentials of asset managers’ responsible and sustainable investment strategies. Putting ESG at the center of day-to-day operations will help overseas asset managers show that they “walk the talk”. They need to take bold decisions about whether to divest from, refrain from investing in or engaging constructively with companies that show poor ESG scores. A commitment to decarbonization and net zero emissions will become an even more important element of communications as firms seek to align with the mainland Chinese government’s double carbon objectives. Overseas asset managers need to double down on their efforts on responsible investment, demonstrating the impact they have on society and the environment.

The asset management industry in Greater China is unique, and every asset manager needs to have its own game plan to navigate the complexity and nuances of this market. Market entry communications and narrative building are critical for turbocharging overseas asset managers’ growth in the region.

There’s an old joke about a guy who’s being recruited by a company. Quickly lured by lavish dinners, event tickets, a generous comp package and promises of perks beyond his imagination, he finds the work environment equally impressive with all the comforts of home, plus a spa and gym.

Finally, it’s too much to resist. But as soon as he reports to work, the grand surroundings disappear, replaced by peeling paint, a nasty odor and rusted-out furniture. Horrified, the new employee now discovers that he is tethered to a dilapidated desk. “This is NOT what I signed on for!” he angrily tells the company’s recruiter. “What happened to all of the great things you showed me?”

The recruiter smiles and replies: “Oh, you were a prospect then. You’re staff now.”

The punchline is exaggerated, yet it drives home a very real point, especially in today’s business climate. It illustrates the need for companies to ask themselves, “Does our recruitment communication accurately reflect our employee experience?”

According to the U.S. Department of Labor, 47.4 million Americans quit their jobs in 2021, fueled by a constantly shifting work landscape thanks, in part, to COVID-19. “The Great Resignation” sent employers scrambling to fill jobs at a rate unseen, even during World War II. Not surprisingly, many companies have asked for help with their recruiting efforts. In many cases, companies focus solely on external messaging: How do they attract new employees?

Less frequently do they ask how to keep the employees they have. If a company is struggling to win at recruitment, chances are they’re struggling with retention, too. Realistically, you can’t solve for one without addressing the other.

In a McKinsey survey, 40% of employees said they plan to quit their jobs in the next six months. What is pushing them out the door? The top three factors employees cited as reasons for quitting: They didn’t feel valued by their organizations (54%) or their managers (52%) and didn’t feel a sense of belonging at work (51%).

If this is the standard for your existing workforce, it’s not likely that new employees will feel differently. There’s already proof that they won’t. According to a Lattice report, more than half (52%) of U.S. employees who’ve been on the job less than three months are already looking for their next job

How can you manage retention and recruitment simultaneously?

• Define your company’s employee value proposition (EVP). Your EVP describes who you are as an employer in a manner that is compelling and aligned with the talent you want to attract. To define your EVP, evaluate your current state of employee experience, understand your target talent and find intersections between the two that enable recruiting not just talent, but the right talent.
• Talk to current – and former – employees. Don’t wait for the exit interview – they’re already gone. Ask what brought them to you and what has kept them at the company.
  • Find out which programs or benefits they enjoy or value most. Raises and perks are great, but know employees want more than this.
  • Ask what else the company can do to make their work-life satisfying. In addition to a general sense of value, employees want to feel cared for and that their overall well-being matters.
  • Share recruiting materials and get their feedback. In today’s social media-driven world, you don’t want current employees to refute your recruiting information online.
  • Identify “good” stories you can share. Employees make much better ambassadors than opponents. Let their experiences tell your company story. It brings credibility to what the company looks like inside because it’s from the perspective of someone actually doing the job.
• Compare perception with reality. Is what you’re saying to prospects about your company aspirational or is it a real representation of today? If you address both in your recruitment materials, and that’s OK, just make sure the differentiation is clear.
  • What did current employees tell you? Review both perceptions (yours and theirs) and identify any gaps or inaccuracies.
  • Follow up with prospects who declined offers. What might have changed their minds?
• Offer referral incentives. Many companies employ this practice for good reason. 
  • Happy, engaged employees are likely to bring you more of the same. (Hint: Another way your current workforce’s company experience can help fill company openings.)
  • While candidate competition remains fierce, consider upping the ante on your program by both increasing the bonus and by adding additional payouts at the first and possibly second anniversaries of the new employee.

People leave their jobs for many reasons, some that are beyond an employer’s control. But if you get to the heart of the reasons you can act on, you can get closer to having a more stable – and truly satisfied – workforce.