Gandolgor Purevjav is the founder of the Ganabell Institute, one of Mongolia’s leading Human Resources consultancy firms and wrote “Ten Steps to Success”, a leadership targeted specifically at Mongolians.
In this interview, she talks about the high turnover for Mongolian companies and explains the necessity for HR planning to retain training investment. A few nuggets of wisdom include features of the archetypical Mongolian mindset and gaps in the Mongolian workforce that can be leveraged by savvy entrepreneurs and investors.
Enkhzul Orgodol: Miss Gandolgor is one of the most prominent HR advisors in the country. She found her own practice, Ganabell Institute, back in 2011 with her partners who are also specialized in strategic management and corporate training. Miss Gandolgor, welcome to the interview. I’m very glad to have you here. As I just briefly explained in the intro you started Ganabell Institute with your partners and your main focus is HR consultancy as well as strategic development, as I understood. Please tell the viewers a little more about your institute.
Gandolgor Purevjav: Sure. I studied Human Resource Management at the Michigan State University and got the HR certified advisor. Also I had over 10 years of experience in HR field. Ganabell Institute vision has two objective. The first one is to help local companies to become international key players by developing the human resources. The second one is to help the individuals to become successful not only in their career, but also in their life. We have the three fields to run our services. The first one is the consultant services in the strategic management, especially in human resource strategy. The second one is the customized and public services. The customized training program is designed based on the needs of the company. The public one is for the design for anyone who wants to improve their personal abilities in the productivity. The third area to cover in our services is to produce the product lines on human development books and notebooks and other activities.
Enkhzul Orgodol: I see, I see. Okay. I’m very glad to have you here, partly because throughout this project we found that human resources is one of the top challenges of doing business in Mongolia, especially based on the interviews with our 11 other business leaders. I would like to ask you was being the human resources in one of the top challenges in Mongolia prompted you to pursue your career in this field? If so, how much improvement have you seen over the past decade since you got into this field?
Gandolgor Purevjav: Well, there was a lot of improvements going on. For instance, 10 years ago when I started this kind of business as a CEO, we’re trying to approach to the small and medium and even large companies, and trying to educate them how training is important to their employees. Then in the beginning they just reacted and say that, “Oh, the training is very costly. Giving the training to employees is very costly. Why do we have any benefit?” It is, “We don’t see any benefit. After we giving training, they probably just leave our companies. What’s the need?” So this kind of attitude was very prevalent during that time, but now that quite changed. Of course, in better way. They understood how it is important, human resource is a very good asset if you utilize, manage them well, how it can be liabilities if you can’t manage, if you can’t retain these employees. It’s all depend on the management level of the company.
Enkhzul Orgodol: Right, right. Those who manage their human resources good, well, must have sustained their business quite well, especially during this economic downturn over the past few years. Right?
Gandolgor Purevjav: I totally agree with you. During the past economic downsize time, the most of the companies they thought reducing their employees is the good option. But indeed, it’s not a matter of employees, it’s a matter of the management strategy. That’s why it’s depend on how you see it. If you see the human resource is the liability, then it is your right to reduce the number of employees, but if you think the human resources asset then you will never fire them. You instead, based on the human resources, you could able to find the new solution to sustain your competitiveness.
Enkhzul Orgodol: Right, right. Could you share us a bit about the human resources challenges that are found most commonly in Mongolia, maybe top three challenges you commonly see in Mongolian organizations or organizations in Mongolia?
Gandolgor Purevjav: In terms of company-wise, there are certain challenges they mostly challenges facing, no matter if you are big company, small company, if you are international company. Based on my experiences the most of the challenge, number one challenge the companies are facing in terms of HR is turnover. That the turnover is less than 50%. Some companies even 70%. So an average, about 50%. It’s considered very high number compared to other developing countries.
Enkhzul Orgodol: Could you elaborate a bit more on the turnover aspect? For example-
Gandolgor Purevjav: For instance if it’s 50% means that when you have the 10 employees and half of them would leave your company. Yeah. It’s like a flow. The employees come in and out. When turnover is very high it’s very, It’s a bad sign.
Enkhzul Orgodol: Yeah.
Gandolgor Purevjav: That means the employee who work more in years, they’re productivity is getting higher time-to-time, year-to-year. Unfortunately once you give training, once you facilitate the training, and once that employee is get used with the job, then after two or three years they just leave the company. Maybe there are different reasons, but the turnover, if it’s high turnover it’s not good sign.
Enkhzul Orgodol: Not at all, and very costly for the companies.
Gandolgor Purevjav: It’s very costly, yeah. The second challenge I see that there are many very good companies who give the high salary job to the highly skilled people. Unfortunately the Mongolian market itself is very small, and in terms of population we have only three million people. The middle level working force is about over 500,000 people. That means Mongolian companies mostly on a lack of highly skilled employees. They are always seeking such employees. If they find it they have ability to pay the money. So this is the second challenge.
Enkhzul Orgodol: Could you share some of the exact professions that you are referring as highly skilled?
Gandolgor Purevjav: Sure. I can say the two levels. The first one is highly specialized technicians. Even though the Mongolian universities produce, give supply, a lot of highly specialized technicians, the Mongolian demand, labor demand cannot supply the work demand. Demand and supply of the labor has been imbalanced. That’s why the highly skilled technicians couldn’t find a job. They had to change the profession and major. Another side, the reason I’m saying that Mongolian companies are lacking of the highly skilled professions means very high executive like Chief Financial Officers, Chief Marketing Officers. These kind of jobs are still vacant because many of my clients keep asking me, “Please find a very good accountant, a very good Chief Financial Officers like Human Resource Advisors,” stuff like that. I’m talking about highly executive job and highly skilled technician. Both companies are lacking these kind of employees. Another side also Mongolian companies are lacking of low-skilled jobs, too.
Enkhzul Orgodol: Right, right. Yeah. Because everybody started going to universities to gain the diploma and the degrees, but there is need in the market where people with vocational training, for example, are in demand.
Gandolgor Purevjav: Yes. Yeah. That’s what I meant.
Enkhzul Orgodol: I see. I see. Okay. So two major problems you named under the-
Gandolgor Purevjav: The problem is it’s not matter of the employees, it’s a matter of the company’s strategy. Based on my experience, hundreds of Mongolian companies didn’t have any human resource strategy. What kind of people they want to hire, how to develop them, how to evaluate the performance fairly. Finally, they don’t have a strategy to retain the employees, who are giving the productivity.
Enkhzul Orgodol: I see. So if there is no clear strategy or clear picture for any newcomer or any employee in the system, then it kind of demotivates them to stay loyal to the company or even to plan their personal life in relation to their work life. Is that what you’re suggesting?
Gandolgor Purevjav: Yeah, yeah, yeah. That’s why highly executive people and very professional people like to find the international companies. They want to be employed by the company who take care of these issues. When Mongolian companies could be able to find the good jobs, good employees, but they should have been prepared in strategies to keep them, to improve their productivity. That is the challenge, one of the three challenges Mongolian companies-
Enkhzul Orgodol: I see. Very insightful. Thank you very much. In terms of overcoming the challenges you just mentioned, high turnover, employee turnover as well as lack of highly skilled professionals, and thirdly unclear or the lack of clarity in their human resources strategy among the companies or the organizations in Mongolia, what are your top maybe three, four, two three solutions or strategies you provide to your clients or to anyone who are operating in Mongolia?
Gandolgor Purevjav: It all depends on the company culture and strategy and mindset of the owner. If the company founder who has a feeling, who loves his or her employees, then he would find out the solution to keep the employees. If the founder, in other hand, doesn’t love, understand employees, he only take cares of making money, then story would be so wrong.
Enkhzul Orgodol: Right, yeah.
Gandolgor Purevjav: When I give advices to the company owners I found out that they didn’t have any certain culture of the organization. Even some companies doesn’t have any value or vision. In that case, how can new employees come to the company, have ambition to work in the long run? When your employees come in they hesitate whether I going to work in the long-term or not. Nobody tell me that company has a vision, company has a capacity to grow. But in that case the new employee’s just trying to adjust a few months. Then if that employee doesn’t find any reason to stay longer then that employee say bye-bye.
Enkhzul Orgodol: Yeah. That happens very commonly in Mongolia, doesn’t it? Yeah. A lot of employees go into new company, corporation, or even startup, and then they just stay there for a few months or even sometimes few weeks. Then they say, “You know, I don’t like how the company’s structured or how the company’s handled.” I see. I see. So that means there is unclarity in the company.
Gandolgor Purevjav: It’s no wonder that the young, energetic, executive people try to find the job at the foreign investment company. The reason is that the policy is very clear, how to develop, how to evaluate performance, how to increase the salary. Everything is very clear.
Enkhzul Orgodol: I see, and as well as their medical and health benefits, etc. I see.
Gandolgor Purevjav: Because of that, foreign investment companies have a privilege to find the good executive, young, energetic professionals. In that case, if Mongolian companies want to attract such potentials they need to compete. Right? In order to compete they have money, they have land, they have equipment, office, but they don’t have a human resource strategy. That’s the problem. If the Mongolian companies who have the human resource issues, they need to pay attention what they are doing instead of criticizing the employees. The highly skilled, energetic, young professionals like to be employed by foreign investment companies. Reason is that these companies, their human resource strategies very clear.
Enkhzul Orgodol: Well, thank you for speaking of foreign investment companies because I was going to ask you about the difference you see in terms of human resources practice and management in Mongolian local and foreign invested companies, you know, foreign companies in Mongolia. Let’s say on one hand Mongolian professionals, or the skilled workers, is more attracted to international companies or foreign invested companies, mostly because of their more clear human resources strategies as well as the package they’re offering. But on the other hand, how about the employees, the foreign employees? Are they happy to employ Mongolians? Are they as happy to employ Mongolians as employing probably the nationalities from more developed countries or more experienced international professionals, based on your experience?
Gandolgor Purevjav: There is no way they wouldn’t be happy because they’re able to hire the highly energetic and capable professional people. That means they have good human resources, so they don’t have any discrimination between the foreign people and the Mongolian people. The rule and structure and everything is clear. Also the international companies do not discriminate against the races and against the age and even the sex. But in the Mongolian companies you will probably notice that in Mongolian companies you need to be a certain age, from 25 to 35. You need to be high. It’s very discriminative. It’s all depends on the company’s culture. When I work with the international companies, I mean, the foreign investment companies, they give certain, they face certain challenges when they work with Mongolian people. So I gave several lectures and seminars how to understand Mongolians, how to communicate the Mongolians effectively for different officials and foreign employers. There is a reason they argue with each other. The reason is very simple. Because the way they see the work is totally different.
Enkhzul Orgodol: Could you give some examples?
Gandolgor Purevjav: I’m talking about in majority, okay? Because there are certain Mongolian professionals who are very highly skilled in terms of soft and hard skills. I’m talking about in majority. The foreign employers need to understand the Mongolian people’s mentality. You know that Mongolian human resources has been developed in more than 25 years before we had the different system. Now the capitalist system has only 25 years. Right?
Gan Then the Mongolian people’s attitude to work quite different. The Mongolian people are very calm. They don’t hurry that much. They don’t plan in small items. They think as a whole. They think on the items as a whole. So once they need they can divide into small stuff. Otherwise they usually just see in general. Also the Mongolian people’s IQ is very high, but EQ is very low, very means they don’t have very time to improve to develop the emotional intelligence. Once Mongolian mentality has been understood by foreign employers, there wouldn’t be any argument, because they understand the mentality of Mongolian people. Then they find the solution, how to communicate with Mongolians.
Enkhzul Orgodol: I see. So it’s not individual specific but it’s more of national or something that you can see across the human resources or the workforce in Mongolia, you’re suggesting. I see. Could you share some of the examples of the EQ that Mongolian workforce commonly lack of?
Gandolgor Purevjav: Mm-hmm (affirmative), yeah. The EQ could be how to communicate with your employee tactfully. If you’ll say something that that person made a mistake, the Mongolian people just say, “You made that mistake.” There is direct communication, straight forward. But if you have emotion IQ, if you have a EQ high then you would find the way to soften it, to make that person understand the mistake. In that case that person who made the mistake realize and recognize that he made the mistake. Such kind of small communication gesture.
Enkhzul Orgodol: I see. Do you provide communication or cultural advice to your foreign clients?
Gandolgor Purevjav: Yeah. Once they had some problems and didn’t find the solution they approach it to us, but we didn’t have such a training program. They had the needs and based on the needs I formulated the training program and give the training for them. Then after the training they were very thankful to me, because they said that for many years I didn’t understand Mongolians. Now I understand Mongolians. Now I find the solution how to work with Mongolians effectively and efficiently.
Enkhzul Orgodol: I see. Could you share some of the insights of that effective training you provided for your foreign clients? Some of the insights, yeah.
Gandolgor Purevjav: Sure. For instance, there are one company, it was the European company. I don’t want to say the name of the company and the country. That European foreign investment company owner had a problem communicating with Mongolians. Then when we find the argument from both sides, because I talk to that foreign boss, foreign employer and the Mongolian employees What was the argument? Why they didn’t understand each other. Then they give the points. The points they say is right for them. But they don’t understand each other. The problem was that that company’s owner was very aristocratic personality. He got aristocratic personality. That means trying to underestimate the people. But the Mongolian people-
Gandolgor Purevjav: Yeah, looked down. But Mongolian people don’t like mud treatment. So Mongolian people high ambitious, ambitious goal, and they don’t want to be-
Enkhzul Orgodol: Seen as someone at the lower … I see, I see. That’s the mentality. Exactly. Yeah, yeah. Actually, in one of my interviews with one of the business leaders, a European business leader actually, he said he kind of saw Mongolians as very entrepreneurial. He kind of saw Mongolians as very entrepreneurial and he said, “Maybe for every Mongolian they have a dream to have a business of their own.” I see.
Gandolgor Purevjav: The second argument they had was that the person, that employer was very punctual, very detail oriented. But the Mongolian people didn’t plan that well, so because of that working attitude, culture, made them misunderstood. I’d give the training to the Mongolian employees that we are a working environment and working style is totally different from them. European people, they are very focused. They are time punctual. Their EQ is high. Also they are detail oriented. After they plan small they could able to find there’s a big picture. But in a Mongolian aside, they see the items as a whole, but later on if necessary they plan it in small steps. Most of the time they don’t plan it in the small steps. They just think as a whole.
Enkhzul Orgodol: I see. There’s a goal here and we have to get there.
Gandolgor Purevjav: They are not high enough to think about how. This kind of misunderstanding occurred between foreign people and Mongolian people. Otherwise the foreign employers really value how intelligent Mongolian people are, and their IQ is very high. Also the are quick learner. They appreciate how quick Mongolian people learn.
Enkhzul Orgodol: Exactly, and the language ability is very high.
Gandolgor Purevjav: They learn the foreign language very fast. Even though Mongolian human resources are limited in terms of quantity, but in terms of quality Mongolian human resources is very highly energetic and highly asset-driven.
Enkhzul Orgodol: I see. So it’s a matter of management at any organization to see the potentials, the real potentials of Mongolians, and having bearing in their minds the potential risks related to the difference in their cultures and difference in their communication styles, etc. Then how all these make difference in how successful and sustainable the business can be run. I see. Those are very valuable, very valuable insights and discussion. I think our intended target audience who we believe to be entrepreneurs and investors, mostly foreigners interested in doing business in Mongolia, have gained some insight related to Mongolian human resources, Mongolian workforce, or to Mongolians in general from your discussion. I would like to welcome your final comments and thoughts on whoever watching the show, the interview, and then thinking whether they should be coming into Mongolia to do business, and if so how they should leverage the potentials of the Mongolian workforce.
Gandolgor Purevjav: Those who want to open a company in Mongolia, you have a very big potential in Mongolian market because Mongolian market is emerging fast and a developing country. In terms of the human resources, if your company has very strong human resource strategy you can find the employees that you really want. These people can give you the value, and these people give you the new ideas. These people give you high productivity. So before you’re entering that, please make sure to develop your human resource strategy. Once you did that you don’t need to worry about different resources.
Enkhzul Orgodol: I see. By the way, finding a local partner, reliable and efficient local partner in Mongolia, was also named to be one of the top solutions or in the top tips for anyone entering the market as a newcomer. Would you agree with that? Would you also suggest finding a good partner in the country as one of the top solutions to addressing potential human resources challenges?
Gandolgor Purevjav: Yeah. Totally, I agree with you. If you find the local partner it would be much, much easier for the foreign companies to penetrate the market, to find the market share and improve the market share in certain period of time. So one of the good advice is to find a reliable local partner.
Enkhzul Orgodol: I see. Maybe after, or even before you come into Mongolia, if you need any help with your human resources strategy or planning, go talk to Miss Gandolgor in Ganabell Institute. Okay. Thank you very much for your insightful discussion, and I hope it’s been useful for our viewers. Thank you.
Gandolgor Purevjav: Thank you.