The Leadership Disconnect
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The Leadership Disconnect

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There was an event in Greater China covering the talent management strategies for identifying and building a pipeline of Managers, Leaders, and Executives - from selection to succession. We would like ...

There was an event in Greater China covering the talent management strategies for identifying and building a pipeline of Managers, Leaders, and Executives - from selection to succession. We would like to share the presentation from Kelly Services SVP - Pam Berklich.

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The Leadership Disconnect The Leadership Disconnect Presentation Transcript

  • Kelly Services Marketing Information – Proprietary and Confidential – February 2013
  • Talent Pipeline Workforce is expected to start shrinking in 5 years • China has capitalized on its large, young labor force to rise as an economic powerhouse by opening opportunities for various companies to tap its seemingly endless pool of workers at lower costs. It has been resilient during the economic slowdown, although expanding at a less buoyant pace. SOURCE: Why China Is Running Out of Workers, June 2011 “China is a country in a race against time: the country can’t get rich before it gets old.” - US Chamber of CommerceSources: News articles Kelly Services Marketing Information – Proprietary and Confidential – February 2013
  • Turnover and Loyalty Chinese workers switch jobs as soon as they get a better offer Factors Chinese Workers Consider to Feel Engaged and Committed at Work (2012) Source202 Kelly KGWI ChinaSources: Tower Watson, KGWI, News articles Kelly Services Marketing Information – Proprietary and Confidential – February 2013 3
  • Employers leverage salaries and opportunities Talent Shortage to overcome talent shortage• Talent shortages continue to be a problem for almost 50% of employers in the Asia Pacific region. 23% of Chinese firms surveyed mentioned that they are experiencing difficulty in employing talent -- a slight improvement from 2011 figures at 24%.• Because of this, mainland Chinese employers are increasing starting salaries and providing additional training and development opportunities to existing staff members to overcome talent shortages. Companies have also utilized these methods to better attract and retain talent. Employers are also considering implementing the “teachable fit” strategy, or appointing people without job skills, but have the potential to learn or grow, although no one involved in the study is currently implementing this approach. Strategies Employed to Overcome Talent Shortage (in %) Others 22% Increase starting salaries 27% Broadening search outside the local region 13% Provide additional training and development to existing staff 27% Enhance benefits packages, including signing bonuses 16% Source: 2012 Talent Shortage Survey from a leading workforce solution firm 4
  • Talent Shortage Employers have difficulty filling positionsKey Findings• 23% of mainland Chinese employers are experiencing a talent shortage, similar to last year’s results.• Management/Executives, especially those with technical skills and language ability, are in acute shortage in China.• The top 3 jobs employers are having difficulty filling in 2012 in mainland China are technicians, sales representatives and laborers. With the steady increase of domestic raw material prices and labor costs, a few manufacturing companies transfer all or part of their production capabilities to China’s inland, or evacuate abroad. Low-end labor markets have no advantage in China, and the high-end technology industry has become the developing direction for China’s manufacturing industry, creating a demand for technical talent. Kelly Services Marketing Information – Proprietary and Confidential – February 2013 5
  • Skill Gaps Key verticals demand top talentHigh Tech•Shortage of skilled laborers: Due to the IT market’s growth in the country, the demand for IT professionals alsoincreased. From 90,000 job openings in May 2012, demand leaped to 260,000 in August of the same year. The resultis that China’s IT industry is expected to face a shortage of 2 to 5 million workers in the next ten years.•Inability to train its own employees: Due to the pressure to expand market share, some of the IT departments oflong-standing firms have been unable to train their own employees. This has led them to fish in the small pond ofhigh-potential graduates and experienced managers with the right functional capabilities, leadership potential, andlanguage skills.•Competition for talent has forced wages upward: Competition for scarce resources and talent has led to highemployee turnover. Companies can easily attract professionals from competing firms, because their skills overlap,forcing other companies to raise salary offers. One Smartphone maker, Xiaomi, offered an annual salary of ¥2M (US$313,000) to hire a management level supervisor. Life Sciences: •China is in need of home-grown innovation and a well-trained workforce: As China increases its presence in the global biomedical sector, there are many career opportunities for both Western scientists and Western-trained Chinese scientists, who will be instrumental in training and developing a biotechnology workforce to meet the rising demand. Consequently, western pharmaceutical companies started investing in the long-term education of young Chinese scientists in their subsidiaries or partners in China.Natural Resources:•Growing energy sector demands more talent: Most of the worlds main energy firms have a presence in China, and manyforeign oil majors also have a stake in the Chinese energy companies. These include well-known international giants such asDanish wind power equipment maker, Vestas, as well as an increasing number of domestic companies, such as Himin Solar,Jingneng, Guodiang Group, Huaneng Group, Datang Group, etc. Both local and foreign firms aim to tap China’s growing energymarket, and are in need of more employees. 6
  • Skill Gaps China needs talent in R&D and financial services sectors• According to a study focused on China talent market, the country’s talent supply cannot keep up with the demand for the following: Research and Development: • China is experiencing a boom in this sector, with multinational companies creating more than 1,100 R&D centers. • Between 2003 and 2007, 90% of all the global new jobs in R&D were located or based in China. • In the next five years, China is expected to experience a shortage of 200,000 high-level talent. • China has put in place a 5-year development plan to create more than a million biotech jobs, allotting more than $300 billion to entice scientists, both local and foreign, to start biotech firms. Financial Services: • In 2011, Shanghai had 230,000 people in the financial services industry. However, only 600, or 0.25%, have international experience and credentials. • In 2010, the country had close to 10 million people in the accounting industry, but only 200,000 were considered middle- or senior-level financial talent. Reports indicated that at least 300,000 accountants were needed to meet demand. • According to the 2011 eFinancial Careers China Talent Survey, 95% of finance professionals believe that there is a skills shortage, while 28% believes that this is a chronic trend. Management: • As Chinese companies start moving away from employing expatriates, HR personnel face the task of looking for local managers, amidst the current shortage of management talent. • The 2011 eFinancial Careers China Talent Survey revealed that 43% of the respondents experienced a skills shortage of senior management or director staff in the finance industry, followed by 40% with a lack of middle management. • As of November 2011, employers are in need of 4 million middle managers, 30,000 senior managers and 100 managers adept at handling Global 500 companies. This has put pressure on wages, with an average executive expecting a salary increase of 15-30%, and in some cases, 50%. 7
  • Talent Management Chinese firms having difficulty developing talent Challenges• A famous talent management firm released a report highlighting the strategic role of talent management in boosting business performance. According to the survey of business leaders and human resource professionals from three groups of Chinese organizations, the main talent management challenges of their firms include: Frontline leaders in many Organizations do not have A majority of organizations organizations are not Most organizations lack an a clear understanding of fail to properly measure competent in applying accurately-assessed pool of how talent management the outcomes of HR talent management tools ready talent. strategy supports business development initiatives. and processes. strategy.Note: Rating of Importance – 5-pt. scale; 5=most important TOP THREE CHALLENGES FOR CHINESE FIRMS 2010 - 2011 STATE-OWNED FOREIGN-OWNED PRIVATE-OWNED Developing leaders and Developing leaders and Developing leaders and employees for key future 4.21 employees for key future roles 3.99 employees for key future roles 3.87 roles (3½ years from now) (3½ years from now) (3½ years from now) Developing the Developing the leadership skills of 4.05 Retaining top talent 3.96 leadership skills of 3.79 existing managers existing managers Developing the Building a Identifying leadership skills strong high- 3.91 3.68 of existing 3.89 cultural set potential managers of values talent 9
  • Developing & Retaining Leaders - WHY NOW?• Employee retention is a key concern for leading organizations & their CEOs  A Leading Consulting Firm Research• Employee development and / or lack of opportunity for advancement = leading reasons for exiting  Kelly Global Workforce Index• Working managers – Struggling to find time to ‘manage’ and develop their team(s)
  • Polling Question #1• What percentage of workers believe that in order to develop their skills and advance their career that changing employers for a new job is the key? a. 17% b. 36% c. 53% d. 67%
  • Polling Question #1• What percentage of workers believe that in order to develop their skills and advance their career that changing employers for a new job is the key? a. 17% b. 36% c. 53% d. 67%
  • 2013 Kelly Global Workforce Index• 63% of workers intend to look for a job with another organization within the next year!• Top factors most likely to cause them to leave (21% each): • Lack of opportunity for advancement • Poor salary / benefits
  • 2013 Kelly Global Workforce Index• Less than half of workers feel that their current job provides ‘meaning’• 67% of workers are not committed to their current employer
  • Polling Question #2• What percentage of workers indicated that their direct manager / supervisor has a significant impact on their level of job satisfaction and engagement? a. 29% b. 37% c. 56% d. 63%
  • Polling Question #2• What percentage of workers indicated that their direct manager / supervisor has a significant impact on their level of job satisfaction and engagement? a. 29% b. 37% c. 56% d. 63%
  • WHAT DO YOU THINK?• Why does career development seem so difficult?• Why does it make us feel tense, anxious and nervous to discuss the topic?• We really need to get back to the basics…
  • Polling Question #3• According to the KGWI survey, what percentage of workers feel valued by their current employer / manager? a. 25% b. 35% c. 45% d. 65%
  • Polling Question #3• According to the KGWI survey, what percentage of workers feel valued by their current employer / manager? a. 25% b. 35% c. 45% d. 65%
  • HINDSIGHT
  • EXAMPLE QUESTIONS Hindsight• What have you always been naturally good at?• What do you most enjoy learning about• What tasks get pushed to the bottom of your ‘to do’ list?
  • EXAMPLE QUESTIONS Insight• What can I always count on you for?• How might your strengths work against you?• Under what settings do you make your best contribution?
  • EXAMPLE Thought Starters Foresight• Our business could be turned upside down if…• I think the next big thing in our industry will be…• One change bound to affect our organization is…
  • Core Concepts• Talent pipeline is shrinking – what your employees say about your company IS your BRAND.• ATTRACT external top talent AND RETAIN/DEVELOP existing talent• It’s more about the genuine conversations around career development– not the process or format• Leverage modeling questions – foresight and hindsight to pull out ‘insight’• Your talent management / engagement strategy is just as important as your business strategy… they work in harmony.
  • The Talent Paradigm Shift The Old Reality The New Reality• People need companies • Companies need people• Machines, capital and geography • Talented people are the are the competitive advantage competitive advantage• Better talent makes some • Better talent makes a huge difference difference• Jobs are scarce • Talented people are scarce• Employers are loyal, and jobs are • People are mobile, and their secure commitment is short-term• Recruiting is like purchasing • Recruiting is like marketing
  • Thank You!Pam Berklich– pam.berklich@kellyocg.com www.kellyocg.com
  • APPENDIXAddl slides for reference – not utilized in notes/presentation
  • Talent Management Various human resource challenges in China Challenges• The European Union Small and Medium Enterprises Centre released a study outlining the human resource challenges that foreign companies face while conducting business in China. Results can be grouped into five categories: Category • Foreign representative offices, financial institutions and economic organizations are not allowed to hire workers directly. Companies need to go through specially-designated HR management agencies. • The official version of any labor contract must be written in Chinese. Legal Environment • Only two fixed-term contracts are permitted. • Corruption is rampant despite strong government regulations. • Employers may not prevent workers from forming unions. The government has pointed out that 80% of all foreign companies in China were unionized as of 2008. • Most Chinese are still clinging to the “iron rice bowl” mentality –expecting that their jobs will last a lifetime and will consistently provide income and benefits. • Vertical or personal relationships are vital cultural characteristics. If a key employee decides to leave the firm, there Cultural is a tendency that his/her subordinates may follow. Differences • China’s education system does not encourage innovation and creativity. • 65% of Western managers in China indicated that assertiveness and accountability are the most challenging behavioral difference seen in Chinese employees. • Recruitment and attraction is one of the major challenges for HR managers: • Background checks are only conducted for senior management positions, such as directors and supervisors. • There is a talent shortage with international and domestic experience in marketing, sales, technology, human resources and management. A McKinsey study revealed that only 10% of candidates for finance, accounting and engineering jobs are qualified to work for a foreign company. Administration • Companies are exposed to pressure from government or party structures to hire more employees than they actually need, as doing otherwise is considered “unpatriotic”. • Shortages in labor have driven salaries up. For example, real wages for manufacturing workers have grown close to 12% per year because the government has constantly increased minimum wages, in fear of the widening gap between the rich and the poor. 32 32
  • Talent Management Various human resource challenges in China Challenges• The European Union Small and Medium Enterprises Centre released a study outlining the human resource challenges that foreign companies face while conducting business in China. It can be grouped into five categories: Category • Foreign employees will have to undergo a stringent process to qualify to work in China. In addition, work permits vary between cities, and localization is becoming more common among foreign-owned firms. • A 2010 survey of 19 industries revealed that the average employee turnover rate for privately-owned companies Administration was 18.5%, making retention a challenge. Major reasons cited for changing jobs include better compensation, (cont) career and training opportunities, benefits and prospects for success. For all of China, the turnover rate was at 20% in 2011. • China implemented a contract employment system, based on the North European legal framework, which makes it difficult to fire an employee under contract. • Knowledge and education are highly valued in China, therefore companies must set up onboarding and continuous training to address talent shortages and retention challenges. This is seen to boost morale and reduce turnover rates. • Foreign companies have been implementing incentive schemes from the West, which do not necessarily work in the Chinese context. Management • Management styles will often need to be adjusted to address cultural differences, communication challenges, and various working styles. There is a need to establish consistency between the company’s strategy and its organizational culture, as well as processes and systems. • Multinational firms typically fill top positions with foreign employees, creating a “glass ceiling” for local managers. This could be a major challenge to retention. • This has been a relatively new function for HR professionals in China, therefore there are still challenges to overcome, including: Organizational • The unwillingness of Chinese employees to communicate with foreign partners Development • The manipulation of Chinese managers with messages and change initiatives • The aversion to change • Tough government regulations 33
  • How Derive Meaning from Work • Employees derive meaning from their work primarily in terms of their ability to excel/develop as well as alignment to their personal values. – Alignment to personal values is particularly strong in China, as compared to the APAC region as well as globally. – In addition, alignment to personal values is more prominent among the younger generations (Gen Y and Gen X) in China compared to older workers (Baby Boomers). By Geography CHINA: By GenerationSource: 2012 Kelly Global Workforce Index (KGWI)Q. How do you define or derive “meaning” from your work? (please select all that apply)Note: Response choices with highest percentages included in charts above. Generation result reported for China only; insufficient generational sample sizes for Hong Kong. Kelly Services Marketing Information – Proprietary and Confidential – February 2013 34
  • Commitment/Engagement Factors • Aside from salary/benefits, work that is more interesting or challenging is a key factor in helping employees feel more committed or engaged with their job. – Across the generation segments, more meaningful responsibility is a factor more so for Baby Boomers in China, as compared to the younger generations. By Geography CHINA: By GenerationSource: 2012 Kelly Global Workforce Index (KGWI)Q. What one factor makes you feel more committed or ‘engaged’ with your job? (please select ONE)Note: Response choices with highest percentages included in charts above. Generation result reported for China only; insufficient generational sample sizes for Hong Kong. Kelly Services Marketing Information – Proprietary and Confidential – February 2013 35
  • Reasons to Leave Organization • Aside from salary/benefits, poor management and lack of opportunities for advancement are issues most likely to prompt employees to leave their place of employment. – Lack of opportunities to advance is of particular concern among the younger generations in China, while poor management is more of a concern among the older generation (Baby Boomers). By Geography CHINA: By GenerationSource: 2012 Kelly Global Workforce Index (KGWI)Q. What factor would be most likely to cause you to leave your organization? (please select ONE)Note: Response choices with highest percentages included in charts above. Generation result reported for China only; insufficient generational sample sizes for Hong Kong. Kelly Services Marketing Information – Proprietary and Confidential – February 2013 36
  • Labor Force Issues SE Asia & APAC East Asia The Pacific/S. Asia• Job quality – social • Inequity in rural and urban • Invisible underemployment protection, social development • Severe disadvantages for young dialogue, fundamental • Job security in small and people rights at work, hours medium enterprises • Improving education of work • Labor shortage arising from enrollment rates• Managing external population decline • Improving job quality in the and internal migration • Wage growth lagging behind agricultural sector and productivity gains development within the rural• Child labor non-farm sector • Encouraging investment and job creation • Formal sector growth • High poverty and working poverty levels
  • RESEARCH HEADLINES: LEADERSHIPDISCONNECT• Many workers are unhappy with managements’ leadership style. Less than four out of ten respondents (38%) are satisfied with their current managements’ leadership style• Only half of the workforce feels inspired. Only 48% of workers feel that their current manager inspires them to do their best work• Workers are calling for leadership styles that favor collaboration, empowerment, engagement, and a clearly articulated vision. From a range of choices, the preferred leadership style is one described as “democratic”, nominated by 24% of respondents. This is followed by “empowering” (20%), “empathetic” (20%), and “visionary” (17%)• A leadership disconnect exists between what workers prefer and what they get. The leadership styles displayed by current managers are not what workers prefer. While more than one-quarter (29%) experience an “authoritative” leadership style from their manager, only 4% prefer this style Kelly Services Marketing Information – Proprietary and Confidential – February 2013
  • LEADERSHIP STYLE:APAC
  • MANAGERIAL INSPIRATION:APAC
  • FEEDBACK ON EMPLOYER:APAC
  • ORGANIZATIONAL ANALYSIS: LEADERSHIPDISCONNECT• Are you grooming leaders who are solely focused on growing the business from the bottom line?• How are you evaluating your leadership development efforts?• How are you revising your leadership development efforts to deal with the increase in the virtual workforce?• Are your leaders just too busy to lead? Kelly Services Marketing Information – Proprietary and Confidential – February 2013