CHINA 2014 ANNUAL HR CONFERENCE WINNING THE FUTURE THROUGH TODAY S INNOVATION September 23, 2014 Shanghai China
Economic Overview Global, Asia Pacific and China
World GDP and Inflation GDP goes up and Inflation goes down from 2013 to 2015 10.0 8.0 6.0 4.0 2.0 0.0 Emerging market and developing economies Inflation Emerging market and developing economies GDP -2.0 2008 2009 2010 2011 2012 2013 2014 2015 9.2 5.4 5.9 7.3 6.0 5.8 5.5 5.2 5.9 3.1 7.5 6.3 5.1 4.7 4.9 5.3 World Inflation 6.0 2.5 3.6 4.9 3.9 3.6 3.5 3.4 World GDP 2.7-0.4 5.2 3.9 3.2 3.0 3.6 3.9 Source: IMF World Economic Outlook (April, 2014) 2
Shift in Global Business Landscape Driving corporate growth in Asia Pacific Asia Pacific vs. Developed markets Asia Pacific still leading the pack 2.0% GDP growth 1.1% GDP growth 4.3% GDP growth To cash in where the growth is today, and for the foreseeable future, Increasing focus on Asia Pacific Source: APAC Exec Brief, August, 2014, IMA Asia 3
Regional GDP, Inflation & Salary Increase 12% 10% 8% 6% 4% 2% 0% AU CN HK ID IN JP KR MY NZ PH SG TH TW VN GDP 3.0% 7.4% 2.5% 5.0% 4.9% 0.4% 3.6% 6.2% 3.3% 6.2% 3.2% 1.1% 3.8% 5.0% Inflation 2.6% 2.5% 3.8% 5.7% 7.3% 2.7% 1.5% 3.5% 2.0% 4.6% 2.1% 2.3% 1.7% 4.9% Salary Increase 3.5% 7.5%* 4.5% 10.0% 11.0% 2.1% 5.0% 5.6% 3.0% 7.0% 4.5% 5.9% 3.8% 10.7% Source: IMA Asia Brief Aug 2014 Mercer Global Compensation Planning Report 2014 July *Mercer TRS Surveys 2014 4
Human Capital Index by Region 1 0.8 0.6 0.4 0.2 Human Capital Index Health and Wellness 0-0.2 Education -0.4-0.6 Workforce and Employment -0.8-1 North America Europe and Central Asia Asia and Pacific Latin America and the Caribbean Middle East and North Africa Sub-Saharan Africa Enabling Environment Overall index is unweighted average of the four pillar scores Scores are weighted by population; population data from United Nations Department of Economic and Social Affairs, World Population Prospects, rev. 2012. Source: The Human Capital Report, World Economic Forum, 2013 The report is published in collaboration with Mercer 5
Human Capital Index - China Rank #43 Country Rank Score Switzerland 1 1.455 Finland 2 1.406 Singapore 3 1.232 Netherlands 4 1.161 Sweden 5 1.111 Japan 15 0.948 United States 16 0.920 Malaysia 22 0.644 China 43 0.186 Thailand 44 0.158 Russian Federation 51 0.010 Indonesia 53 0.001 Brazil 57-0.054 Mexico 58-0.057 Vietnam 70-0.202 India 78-0.270 Source: The Human Capital Report, World Economic Forum, 2013 6
Population Demographics Gender Asia 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 2030 2010 6.0% 4.0% 2.0% 0.0% 2.0% 4.0% 6.0% Male Female Source: UN Population Statistics 2012 7
Population Demographics Median Age 55 50 45 1990 2010 2030 Median Age of the Total Population (Years) 40 35 30 25 20 15 10 5 0 India ASEAN USA Australia China South Korea Japan Source: UN World Population Prospects 2012 8
China s Changing Demographics Age Group between 20-59 Unit: thousand 250,000 200,000 150,000 20-29 30-39 40-49 50-59 100,000 50,000 1990 1995 2000 2005 2010 2015 2020 2025 2030 The forecast of the future population adopts medium fertility rate assumption. Source: World Population Prospects: The 2012 Revision, United Nations 9
China on Track for Moderate Growth GDP, CPI, salary increase and turnover rate 18 16 14 12 10 8 6 4 2 0-2 12.2 10.4 8.2 1.8 13.5 11.6 8.2 1.5 GDP CPI(Inflation Rate) Salary Increase Staff Voluntary Turnover 14.6 13 8.6 4.8 13.4 9.6 8.7 5.9 11.3 9.1 6.9 15.7 10.4 8.5 3.3 9.3 7.8 7.7 2014 1 st half year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(E) 2015(F) -0.7 16.3 9.6 9.4 5.4 13.6 13.6 7.9 7.2 7.5 7.7 7.4 6.7 2.6 2.6 2.5 2.8 Source : National Bureau of Statistics of China IMA Asia (Aug 2014) 2004-2014 Mercer Total Remuneration Survey 10
China on Track for Moderate Growth GDP per capita 5434 6078 6747 7333 7961 China s Ranking of GDP per capita Year Ranking 2011 91 2012 88 2013 84 2014(F) 82 2015(F) 81 2011 2012 2013 2014(F) 2015(F) 1. Source: IMF World Economic Outlook (April, 2014). 2. GDP is expressed in current U.S. dollars per person. Data are derived by first converting GDP in national currency to U.S. dollars and then dividing it by total population. 3. For the ranking, there are 186 countries and regions with the data of GDP per. capita 11
China GDP Growth Rate Forecast 15 CHINA: GDP Growth by Component, % 12 Manufacturing Construction Services GDP 9 6 3 0 2010 2011 2012 2013 2014 2015 2016 Source: China Forecast Book, IMA Asia, 2014 Q3 12
China s Total Debt vs. GDP Raised rapidly since 2008 economic risk increased Source: Financial Times reported on July 22, 2014, citing estimates from Standard Chartered. 13
China Foreign Direct Investment (FDI) 40 China FDI Growth 2013 FDI Flow Growth Percentage(Year-on-year) 30 20 10 0-10 124 FDI Outflow 2014 100 USD, Billion FDI Inflow -20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 Outflow > Inflow Source : Ministry of Commerce of the People s Republic of China Source: World Investment Report 2014 United Nations Conference on Trade and Development 14
China PMI : Manufacturing and Services 55 PMI Manufacturing PMI Service 54 53 52 51 54.1 Service Highest since Mar 2013 50 49 48 47 46 45 50.2 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2013 2014 Manufacturing Down Again after 3-month up Source: HSBC September, 2014 15
Innovation A Path to Transformation China has improved its innovation from 2013 to 2014 Global Innovation Index rankings Country/Economy Score(0-100) 2014 Rank 2013 Rank Switzerland 64.78 1 1 United Kingdom 62.37 2 3 Sweden 62.29 3 2 United States of America 60.09 6 5 Hong Kong (China) 56.82 10 7 Japan 52.41 21 22 China 46.57 29 35 Russian Federation 39.14 49 62 Brazil 36.29 61 64 India 33.70 76 66 Source: The Global Innovation Index 2014 Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO) 16
Summary China still has strong-to-moderate GDP growth rate in next 3 years. Economic risk is raising due to stimulation. China may become a FDI net outflow country in 2014. China is on the way improving its Human Capital Index and innovation ranking in the world, while the aging population will be a issue, China has to seek way to offset its negative impact. 17
New Technology Brings New Practices of Talent Management
Source: CBN Weekly 2014 19
HR Revolution with business change Hiring Communi cation Learning & Developm ent Saving 20
From Graduates points of view Strong financial power Competitive benefits But lack of Innovative culture Inspiring leadership Attractive company products/services Innovative culture Fast promotion Job Security Performance-based bonus Fast promotion Entrepreneurship environment Grey area Compensation for overtimes Data source: Universum 21
Graduate Top 3 Preferences MNC SOE POE OWN-BIZ START-UP Data source: Universum 22
FIFA World Cup and Social Network 350,000 tweets Per day 62% out of 500 million 1,000 + million discussion Data source: Peel, emarketer 23
Revolution in Recruitment Channel 24
Revolution in Recruitment Channel 25
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Communication CEO Corner 28
Learning & Development 29
24 September 2014 30
24 September 2014 31
24 September 2014 32
85%Chinese employees are not good at financial planning and investment
Smart Saving The new thoughts on Benefits Financial Management Seminar Investment Platform Smart Saving Customized Financial Management Solution Do not forget, you are an inflation-linked bond! 34 34
Leadership and Retention - Key to Business I have trust in Company Leadership, who has clear goals and is guiding the company in right direction Convenient Location Open door policy for complaints and appeals 5 4 3 2 1 0 Company Culture Standardized Management Colleagues Relationship Democratic and innovative environment Team Building Activities Recognition for individual performance Health Issue Flexible Working Hours Data source: 2014 Mercer Retention Survey 35
Communication Transparency HR- Hiring Marketing Learning & Developme Innovation nt HR - Saving Finance 36
CHINA 2014 ANNUAL HR CONFERENCE WINNING THE FUTURE THROUGH TODAY S INNOVATION September 23, 2014 Shanghai China