The business context
TNT has had a presence in China for nearly 20 years. This had originally taken the form of a joint venture company with a state-owned enterprise. Overseas owned companies entering the logistics sector in China then participated in this form of joint venture arrangement.
In tandem with China’s entry into the World Trade Organisation (WTO) in 2001, TNT’s strategy in China was aligned to the new market opportunities which this created. In 2003, as TNT’s joint venture tenure ended, TNT established its majority-owned entity in China. It currently has 2,000 employees based in 25 branches across China and another 3,000 in an automotive logistics joint venture. TNT has announced that it will divest the automotive logistics joint venture but will be greatly extending its scope and range of services in China by acquiring the Hoau networks and distribution group, a private company employing 12,000 people. Supported by some key expatriate expertise, the majority of the staff of the current and enlarged company after acquisition will be Chinese nationals.
TNT sees China as playing a crucial role in its business strategy. Based on market projection, as much as a third of world manufacturing capital could be located in China, and as a result the logistics flow will be far higher. China could become TNT’s second biggest market after Europe and this will require considerable commitment in management, physical and human resources.
Investing in people
Investors in People (IiP) is a UK based standard of training effectiveness and, when this benchmark was applied outside the UK, TNT became one of the first companies to extend its range internationally. SiewKim Sim, who originates from Singapore, is the Human Resources Director for TNT Greater China. Previously based in TNT’s Asia Regional Headquarters she was responsible for ensuring that IiP certification was secured across all 11 countries in the Region. Currently given the huge organisational changes in training, formal IiP status is pending but the principles are applied and application for accreditation is intended in the future. Indeed SiewKim Sim says that a high proportion of the current employees in China know of IiP and its principles. What is beyond doubt is that they are aware of the TNT’s view that the protection and development of its brand requires a commitment to investment in its people.
Over the last two years, TNT in China has trained about 2000 employees annually. The company delivered 14,000 days training each year, or an average of 7 days annual training per employee. Nearly all staff have participated in this training effort - from operatives and drivers upwards. Much of this training has concentrated on the systems and key processes needed to create business advantage for TNT – for example operations, customer service and billings. Some have concentrated on the particular needs of the China market: TNT has introduced direct mail marketing to develop new business in China, a relatively novel marketing approach in the country. A growing proportion of the training has involved management and soft-skills and the interpersonal skills involved in selling and leadership.
One consequence is that TNT’s staff acquire capabilities which make them attractive to other employers. TNT’s turnover rate of staff at 12% annually is much lower than the market norm; however competition for scarce talents in this rapidly expanding market is exponentially accelerating. Although SiewKim Sim cited this as a key challenge, she emphasized that TNT’s objectives are long-term and:
“TNT will continue to train, develop and build a career for our people.”
As part of its strategic initiatives, TNT China established the TNT China University in September 2004. This was formed in cooperation partnership with the Shanghai Jiaotong University (SJU), one of the top three universities in China – with a strong reputation in both logistics and management education. SiewKim Sim sees the TNT China University as an essential element in developing a workforce with world-class competencies to deliver business goals. The University training programmes have mainly been delivered by a network of 80 in-house trainer-managers. They train as part of their professional responsibility and the process is cascaded downwards.
SJU intends to create one of the best logistics school in the country and TNT will be able to call on a faculty of capable staff who understand the needs of their business. Topic areas to be developed include executive and certification programmes, leadership, e-learning, knowledge management and competency mapping.
Adapting to the Chinese market
SiewKim Sim emphasized that:
“Training strategy must be evolved in alignment with business strategy – that’s the continuous challenge.”
Business needs drive the training requirements and TNT hopes to secure business advantage through the ability of their people to manage and deliver globally and locally using superior systems and processes. There are certain world-wide standards and best practices that are consistently deployed. Some may be adapted to the Chinese market – for example a ‘China Link’ technology system was adapted from a global model and applied locally to accommodate business transactions in the Mandarin language. The sheer size and scale of the market is another factor – the newly announced acquisition Hoau has currently a physical presence in over 400 Chinese cities.
The Chinese employment market and labour demographics is of course a key feature of the adaptation required – and has a major impact on training and learning. Government legislation is increasingly aimed at building and nurturing the labour force at this stage of economic transition. According to SiewKim Sim the confluence of historical, economic, cultural and social developments and legacies have significant impact on workforce training needs in China. Hence, her strong belief that a consistent and long term development strategy is critical to enable business to deliver targeted training results for business goals.