Jeff Fuller

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Jeff Fuller Powered By Docstoc
					6th October 2006

Talent Our Greatest
Asset
ICCO, New Delhi


Jeffrey Fuller
Mumbai
        Contents



   Part I : A quick introduction
   Part II : Talent context: What‟s happening in the region?
   Part III : Talent context: PR industry in this environment
   Part IV : Meeting the key talent challenges:




Mercer Human Resource Consulting                                 2
          Mercer Human Resource Consulting is an
          operating company of Marsh and McLennan
          Companies


                                                                       Global professional services firm
                                                                       Annual revenues exceed $12 billion
                                                 MMC
                                        (Marsh & McLennan
                                                                       Approximately 60,000 employees in over 100 countries
                                         Companies, Inc.)              MMC is listed on the New York, Chicago, Pacific, and
                                                                        London stock exchanges
                                                                       MMC's web address is www.mmc.com




      Guy                                                Mercer         Mercer
                                                                        Human        Putnam
    Carpenter        Marsh            Kroll             Specialty      Resource    Investments
      & Co.                                            Consulting     Consulting



  World's        World's          World's               Major global provider of   One of the
  leading risk   leading risk     leading risk          consulting services        largest
  and            and              consulting                                       investment
  reinsurance    insurance        company                                          management
  specialist     services f irm                                                    companies in
                                                                                   the US




Mercer Human Resource Consulting                                                                                               3
               Mercer in India
               Lines of Business

                                          MERCER INDIA

  Human Capital                 Human Capital      Retirement Benefits        Employee Benefits
 Advisory Services             Product Solutions       Consulting                Consulting




 Broad Based Rewards         Compensation Co-
                                                    Plan Design              Benefit Design
                             Sourcing
 Executive
                                                    Funding                  Financial Analysis &
Remuneration                  Compensation
                                                                             Plan Funding
                             Surveys                Accounting Standards
 HR Effectiveness
                                                                              Risk Carrier Selection
                              Benefits Surveys     Legal Compliance
 Global Clients
                                                                              Benefits Broking
                              Corporate            Vendor Management
 Performance
                             Benchmarking                                     Communication &
Measurement                                         Mergers, Acquisitions
                                                                             Administration
 Sales Effectiveness         Employee Mobility   and Restructuring
                             Services
 Workforce Strategies
                              Global Insights
                             Publications
       Mercer Human Resource Consulting                                                           4
Economic Overview

What’s Happening Out
There?...
                       GDP Growth Rates
                       Comparison over the years

Perspective:


•Growth expected to continue in the near future:
     •China might decelerate in the coming years; yet it will exceed the
     growth of most countries
• 2006 projections : China approx. 8 %; India at approx 7%
• Services comprises more than 50% of the Indian economy
• Industrial sector constitutes more than 50% of the Chinese economy
• China‟s GDP per capita, is more than twice that of India.
 Source: Mercer Human Resource Consulting, Global Compensation Planning Report, 2002-2006 editions




      Mercer Human Resource Consulting                                                               6
                       Internet Users
                       (per 1,000 people)
Perspective


• Investment on Information and Communication Technology
     • China 5.3% of GDP
     • India 3.7% of GDP




 Source: World Bank, World Development Indicators, 2005



      Mercer Human Resource Consulting                     7
                      Demographics
                      Age Distribution (as a % of total population)

Perspective


• Findings indicate that India is a much “younger” country than China
                                               1990                   2003
       Age (years)
     • “China will grow old before it gets rich
                                       China          India   China          India
                0 – 14                 28%            36%     29%            33%
              15 – 64                  67%            59%     67%            62%
                    65+                 6%            4%       6%            5%
 Source: Asian Development Bank 2003




      Mercer Human Resource Consulting                                               8
                Economically Active Population
                (% of working population)

Perspective


• Though the labor participation in India and China are almost the same,
                                 1990                    2003
 Indian labor participation growth rate is exceeding the Chinese rate
                          Male     Female        Male
   • Every year India graduates 14 million graduates                    Female

        • 1.5 times that of China & 2 times that of US
                  China
                                      89.6          79.9         88.8    79.2
   • 2.5 million graduates enter the Indian labor market each year
                       India
        • 25% of these graduates have skills to work for foreign companies;
                          87.9       42.4         86.6         45.2
          compared to 10% in China
                                             - Micknsey Report




   Mercer Human Resource Consulting                                              9
                 Labor Cost Comparison
                 per hour in USD

Perspective

• Labor costs are monitored China by MNCs to determine worldwide
                            closely    India
 investments               2000
                             0.59          0.59
• China‟s labor costs have had a steep climb whereas India has had a
 slower increase.          2001
                                       0.69   0.62

                           2002
                                       0.8    0.6

                           2003
                                       0.92   0.74




    Mercer Human Resource Consulting                                   11
                       Salary Increase Trends


Perspective

• Mostly linear increases, indicative of a stable and growing economy.
• However, India‟s average annual salary increases were more sizeable
 over the recent five year period than were China‟s;
     • At 11.5% and 7.5% respectively.




 Source: Mercer Human Resource Consulting, Global Compensation Planning Report, 2002-2006 editions


      Mercer Human Resource Consulting                                                               12
                 Pay Progression
                 Management compensation in proportion to line worker


Perspective


The analysis reveals that India places a higher relative value on
  management compared to China
            • But this is changing. Managerial pay in China is increasing at
              much faster rates than non-management pay




    Mercer Human Resource Consulting                                           13
              SWOT Analysis : China


Strengths                                  Weaknesses
   Strong manufacturing base                 Low English speaking population
   Low manpower cost                         Lack of IT Talent
   Government support                        Lack of experience in managing technology based
   Fastest growing economy in the world       business

   Large expatriate pool of talent           Delivering quality output
                                              Talent gaps in senior technical levels and middle
                                               management levels
                                              Relative lack “muti-national” skills and mindset
                                              Ageing population
                                              Talent scarcity high in the 40-50 years bracket

                                           Threats
Opportunities
                                              Competition from other low cost countries
   Being a part of WTO
                                              Public opposition to off-shoring by higher wage
   Hardware market                            countries
                                              „China‟ perception




     Mercer Human Resource Consulting                                                              14
              SWOT Analysis : India


Strengths                                         Weaknesses
   Large talent pool, with English proficiency      Poor infrastructure
   Low labor cost                                   Delay in peace process with Pakistan
   Expertise in technologies and managing           Poor legal system
    technology based businesses                      Brand „India‟
   Rapid growth of domestic market                  Language skills other than English
         Blue   chip companies in India



Opportunities                                     Threats
                                                     Competition from other low cost countries
   Increased off-shoring
                                                     Public opposition to off-shoring in higher wage
   New markets in geographies & verticals            countries




     Mercer Human Resource Consulting                                                                   15
The PR Industry in this
environment
              SWOT Analysis : PR Industry in the region


Strengths                                           Weaknesses
   PR has gained a foothold                           Small Industry size
   MNC presence rising                                Not enough trained manpower – driving salary costs
   Technology adoption is high                        Service offerings yet to evolve to developed nation‟s
   Creativity and Innovation is high                   standards

   Demand for PR is growing – cuts across all         Industry largely fragmented into small companies
    sectors                                            Investment in people low by industry and
                                                        organizations
                                                       Industry not well represented


Opportunities                                       Threats
   Need for more evolved offerings growing            Attrition is high
   Corporate increasingly knowledgeable about PR      Scarcity of quality talent in middle and junior
                                                        levels
   Demand for communication consulting
    opportunities rising                               Work-life imbalance causing people to look at
                                                        corporate jobs
                                                       Consolidation and churn in the industry likely to
                                                        increase in the near future
                                                       May not become a “strategic function” – extended
                                                        arm of the Corporate Communication dept

     Mercer Human Resource Consulting                                                                           17
Meeting the Challenges
        Case Study


Acme Inc is a 7 year old PR agency. It has a talented set of senior people who
  have grown with the firm over the last few years. While the firm enjoys a fairly
  good reputation it is facing several challenges:
   High end work being given to competition
   New client acquisition has reached a plateau
   Needs to increase revenues from existing relationships
   The existing scenario of under-cutting on pricing is putting pressure on
    revenues.
   It is losing middle level talent to the corporate sector. Exiting employees have
    stated pay, learning and lack of growth as key reasons for leaving




Mercer Human Resource Consulting                                                       19
        Case Study


   Among other solutions that Acme is exploring, one is to increase its ability to
    offer innovative solutions and thus move higher in the value chain.
   The purpose is to get higher revenues from existing clients rather than
    spending on acquiring new clients. Also, by creating a high differential in value
    of services offered Acme believes it can operate in a space where the smaller
    price-cutting firms cannot operate.




 What people management processes should Acme focus on to meet its
                         business needs?

Mercer Human Resource Consulting                                                      20
        Conceptual Design


                                                     Definition of
                Business Results
                                                      Winning


                                      Organization
                                      Behaviours



                                   Organization Design




                                    HR Action Plans

Mercer Human Resource Consulting                                     21
           The Two Challenges




    Business Challenge                Talent Challenge



                                       Get Talent
           Manage growth
                                      Retain Talent
                Innovate
                                      Engage Talent
Increase organisation capability
                                      Manage Talent
Enhance visibility and credibility
                                       Grow Talent

   Mercer Human Resource Consulting                      23
            Every business model has a unique human
            capital strategy
                                                 People
                                                Capabilities
                                                Experience
                                                Training & education
                                                Demographics


                Rewards
           Monetary/non-
                                                                                   Work processes
            monetary                                                              Work f lows
           Long/short term                                                       Sequencing of activities
           Career progression                                                    Division of labor
                                                                                  Unit (inter)dependencies




                                                                                    Managerial structure
                                                                                  Roles and responsibilities
       Decision-making
                                                                                  Job design
                                                                                  Reporting relationships and
           Vision/strategy
                                                                                   requirements
           Decision-making
                                                                                  Goal specif ication
            accountability
                                                                                  Perf ormance management
           Speed and quality       Information and knowledge
            of decision-making
           Participation               Communication mechanisms and f lows
           Decentralization            Inf ormation exchange
                                        Intellectual capital use/creation
                                        Inf ormation systems


Acme’s talent challenges are addressed through its human capital strategy
 Mercer Human Resource Consulting                                                                                24
         Understanding Employee Motivation
                                                                         The extent to
                                                                         which employees
 The extent to which                                                     like and get along
 employees feel that                                                     with others; and
                            Status and
                             Status and                         Fit and
                                                                 Fit and feel their interests
 they are part of an
                              Identity
                               Identity                       Belonging are consistent
                                                               Belonging
 organization that is
 special                                                                 with the
                                                                         organization's

                                            Engagement
                                            Engagement
                   Trust and
                    Trust and                                        Economic
                   Reciprocity                                        Economic
                    Reciprocity                                        Inter-
                                                                        Inter-
The extent to which                                                 dependence
                                                                     dependence
managers, specifically,
                                             Emotional                      The extent to
and the organization                          Emotional                     which employees
more generally, can be                         Reward
                                                Reward                      believe that they
counted on to do what
                                                                            are provided
is good, fair and right                                                     competitive
                                    The extent to which
                                    employees are satisfied with            wages and
                                    their jobs, career and                  benefits
                                    development opportunities
                                    and the quality of work life.
 Mercer Human Resource Consulting                                                               26
               What drives employee engagement in China?



1
    Sense of personal accomplishment
2
    Paid fairly, given performance
3
    Comparable benefits to industry
4                                                                    Employee
    Confidence in senior management                                 Engagement
5
    IT Systems support business needs
6
    Opportunities for Training
7
    Regular performance feedback
                                          Mercer‟s What‟s Working in China Report


       Mercer Human Resource Consulting                                             27
             What drives employee engagement in India?



1
    Confidence in Senior Management
2
    Paid fairly, given performance
3
    Organisation reputation for customer
    service                                                            Employee
4
                                                                      Engagement
    Sense of personal accomplishment
5
    Comparable benefits to industry
6
    Regular performance feedback
7
    Reasonable Workload
                                           Mercer‟s What‟s Working in India Report


     Mercer Human Resource Consulting                                                28
                 Is human capital strategy aligned with talent
                 challenges?

            Work Processes Managerial Information &   People   Decision   Rewards
                            Structure  Knowledge               Making

Get


Engage


Manage


Grow


Retain




                        Innovate to increase range of service offerings
         Mercer Human Resource Consulting                                       29
                   Gap analysis helps us set priorities


                                                   Work Processes       Rewarding
High

                                                                   Grow
                                                            Engage     Retain

                                                      People
  Urgent




                                                          Information
                                         Get
                                                                    Decision Making
                                                       Manage
                            Structure

Low
             Low                               Importance                High

           Mercer Human Resource Consulting                                      30
        Problem Definition



   How can we redesign
     – Our Work Processes
     – Our Talent mix and
     – Our Reward Systems

   So that we create a unique culture that helps
     – Retain
     – Engage and
     – Grow
   Our most needed Talent so that
     – The capability of the organization to innovate is increased




Mercer Human Resource Consulting                                     31
        Putting it all together




Mercer Human Resource Consulting   32
Thank You!

For further information and clarification,
please contact:

Jeffrey Fuller
(O) +91 22 647 29 043
jeff.fuller@mercer.com
Linked Slides
        SWOT China: Strengths



   Strong manufacturing base
   Low manpower cost
   Government support
   Fastest growing economy in the world
   Large expatriate pool of talent




Mercer Human Resource Consulting           35
        SWOT China : Weakness



   Low English speaking population
   Lack of IT Talent
   Lack of experience in managing technology based business
   Delivering quality output
   Talent gaps in senior technical levels and middle management levels
   Talent scarcity high in the 40-50 years bracket
   Relative lack “muti-national” skills and mindset
   Ageing population




Mercer Human Resource Consulting                                          36
        SWOT China : Opportunities



   Being a part of WTO
   Hardware market




Mercer Human Resource Consulting     37
        SWOT China : Threats



   Competition from other low cost countries
   Public opposition to off-shoring by higher wage countries
   „China‟ perception




Mercer Human Resource Consulting                                38
        SWOT India : Strengths



   Large talent pool, with English proficiency
   Low labor cost
   Expertise in technologies and managing technology based businesses
   Rapid growth of domestic market
     – Blue chip companies in India




Mercer Human Resource Consulting                                     39
        SWOT India : Weakness



   Poor infrastructure
   Delay in peace process with Pakistan
   Poor legal system
   Brand „India‟
   Language skills other than English




Mercer Human Resource Consulting           40
        SWOT India : Opportunities



   Increased off-shoring
   New markets in geographies & verticals




Mercer Human Resource Consulting             41
        SWOT India : Threats



   Competition from other low cost countries
   Public opposition to off-shoring in higher wage countries




Mercer Human Resource Consulting                                42
        PR Industry in the region : Strengths



   PR has gained a foothold
   MNC presence rising
   Technology adoption is high
   Realization among PR for more professional & ethical way of doing
    business
   Developing “consulting skills”
      – knowledge of client‟s business / industry etc
   Demand for PR is growing – cuts across all sectors
      – awareness of PR‟s role in managing company reputations rising




Mercer Human Resource Consulting                                        43
        PR Industry in the region : Weakness



   Small Industry size
   Not enough trained manpower –
      – drives salary raises, poaching, attrition etc

   Service offerings yet to evolve to developed nation‟s standards
   Industry largely fragmented into small companies
       – Price-cutting and poaching hurting efficiencies

   Investment in people low by industry and organizations
   Industry not well represented
       – data / information on PR industry scarce




Mercer Human Resource Consulting                                      44
        PR Industry in the region : Opportunities



   Need for more evolved offerings growing
      – Not just press-releases but investor relations etc
   Corporate increasingly knowledgeable about PR
   Demand for communication consulting opportunities rising
      – reputation management

   Consolidation of MNC client‟s PR programmes under a universal global
    PR Programme
      – global alliances and affiliations will play a greater role




Mercer Human Resource Consulting                                       45
        PR Industry in the region : Threats



   Entry barriers are low
   Attrition is high
   Corporate offer better rewards, benefits, and work-life balance
   Scarcity of quality talent in middle and junior levels
   Work-life imbalance also driving attrition
   Consolidation and churn in the industry likely to increase in the near
    future
   May not become a “strategic function”
      – extended arm of the Corporate Communication dept?




Mercer Human Resource Consulting                                             46

				
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