ILRHR 6600: "MNC: Talent Strategy in India and China" by Lingmin Li

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  • Talent management remains one of the most pressing and challenging issues for business leaders globally. With Asia Pacific being one of the fastest growing region and a rapidly ageing demographic, the war for talent is even more important to organizations in the region. Yet organizations are struggling to find the right approaches and solutions to implement a successful talent management strategy.
  • Talent management remains one of the most pressing and challenging issues for business leaders globally. With Asia Pacific being one of the fastest growing region and a rapidly ageing demographic, the war for talent is even more important to organizations in the region. Yet organizations are struggling to find the right approaches and solutions to implement a successful talent management strategy.
  • Talent management remains one of the most pressing and challenging issues for business leaders globally. With Asia Pacific being one of the fastest growing region and a rapidly ageing demographic, the war for talent is even more important to organizations in the region. Yet organizations are struggling to find the right approaches and solutions to implement a successful talent management strategy.
  • Talent management remains one of the most pressing and challenging issues for business leaders globally. With Asia Pacific being one of the fastest growing region and a rapidly ageing demographic, the war for talent is even more important to organizations in the region. Yet organizations are struggling to find the right approaches and solutions to implement a successful talent management strategy.
  • Talent management remains one of the most pressing and challenging issues for business leaders globally. With Asia Pacific being one of the fastest growing region and a rapidly ageing demographic, the war for talent is even more important to organizations in the region. Yet organizations are struggling to find the right approaches and solutions to implement a successful talent management strategy.
  • (Hay Group’s extensive research on Most Admired Companies has shown that top global organizations typically pay their high performers twice the increase compared to their average performers, and that poor performance is not rewarded, but penalized with zero increases).
  • (Hay Group’s extensive research on Most Admired Companies has shown that top global organizations typically pay their high performers twice the increase compared to their average performers, and that poor performance is not rewarded, but penalized with zero increases).
  • (Hay Group’s extensive research on Most Admired Companies has shown that top global organizations typically pay their high performers twice the increase compared to their average performers, and that poor performance is not rewarded, but penalized with zero increases).
  • ILRHR 6600: "MNC: Talent Strategy in India and China" by Lingmin Li

    1. 1. IHRLR 6600 Cornell UniversityLingmin LiApril 24, 2012
    2. 2. Similarities  Hyper-growth Market Source: tradingeconomics.com
    3. 3. Similarity  Talent Shortage with High Turnover Rate - India: 54% in 2010 thinking of quiting VS 26% in 2004; - China: 34% VS 18%
    4. 4. Can Multinational Companies Treat India and China with the Same Talent Strategy? Question
    5. 5.  Data Sources  2011 Mercer “What’s Working” Survey - Compensation Planning 2012 report - India: What’s Working Summary - China: What’s Working Summary  2011 Community Business - Bring the best of Asian talents  2010 Hay Group – Rewarding China  2011 Towers Watson – Incentive Plan Design Practices (Summary Results from 2011 Asia Incentive Plan Design Survey)  2011 Worldatwork - Leading the next wave of growth in Asia  2011 Blessingwhite - Employee Engagement Report  2011 Hewit Consulting – Trends of Global Employee Engagement
    6. 6. Talent Strategy Attracting Talents Engaging Talents Talent Strategy Rewarding Talents
    7. 7. Talent Strategy _ Attracting Talents Employee Perception of MNCs India China  Professionalism: streamlined processes  Flat org, democratic leadership: and structured organizational hierarchy Advance based on performance  Emphasis on training and development  Opportunities for training and Positive for fresh graduates development: fast-track programs for  Exposure to international practice HIPO staff  Interacting with people from different  Exposure to international best cultures and backgrounds practice  Constant need to educate HQ staff  Policies made by people without good about China: given that MNCs understanding of Indian market frequently change staff structure Negative  Slow decision-making process  Glass ceiling to long-term career  Training provided through collective success programs, not by hands-on experience  Sense of missing out the immerse growth of China
    8. 8. Talent Strategy _ Attracting Talents (Cont’d)
    9. 9. Talent Strategy _ Attracting Talents (Cont’d) India China Clear Preference for MNCs No Clear Preference for MNCs Gen Y – Choosing Future Employees
    10. 10. Talent Strategy _ Engaging Talents According to Blessing White’s Employee Engagement Report 2011: Only 31% of workers worldwide are engaged; India has the most engaged (37%); China has the least (17%).
    11. 11. Talent Strategy _ Engaging Talents (Cont’d) Employee Value Proposition (2011) India China Career advancement Career advancement Base pay Base pay Training opportunities Supplemental retirement savings plan Type of work Bonus or other incentives Working for a respectable Supplemental medical organization insurance coverage Bonus or other incentives Working for a respectable org. Retirement savings plan Wellness programs Flexible work schedule Type of work
    12. 12. Talent Strategy _ Rewarding Talents Benefits & Compensation: India and China are quite similar Rapid economic growth India Inflation rate: 9.5% (3/2012) 9.5% Rapid economic March 2012 growth Rapid economic growth Inflation China Inflation rate: 9.5% (3/2012) 3.6% March 2012 Skyrocketing Pay Increase & Pay progression
    13. 13. Talent Strategy _ Rewarding Talents (Cont’d)  Two-step pay progression trends  Another reason for high turnover: Pay Dispersion - China: 300% (200% for US) - India: N/A, but figured third in 2008
    14. 14. Talent Strategy _ Rewarding Talents (Cont’d) Poor Implementation of “Pay for performance” - No distinct difference in pay between high and average performers - Paying poor performers wage increase * Top companies pay high performers twice the increase as average performers and poor performance is not rewarded MNC’s Challenge “Internal equity” Problem - Hiring new people at higher wages than most of the loyal employees receive leads to de-motivation and encourages disloyalty - Fair pay between old employees and new hires
    15. 15. Conclusion Common Talent Management practices for India and China • Ensure Asian representation at senior levels to show the company’s strong Career/ commitment to Asian market Leadership • Localize low/mid-management to create a pipeline for senior leadership • Market pay alignment is essential to attract the right people in highly competitive labor market. • However, to retain people, MNCs need to look at total reward elements, such as career, work-life balance and benefit. Comp & • Increase the pay gap between high performers and average performers to Benefits over 20% (the minimum threshold for bonus differentiation to be effective) • To balance pay-for-performance and internal fairness, MNCs should manage transparent processes to justify pay differences like job sizing and grading, and communicate compensation policy openly with employees
    16. 16. Conclusion (Cont’d) Specific Practices for India • Offer more opportunities of overseas assignments, and build global work Globality environment to attract Gen Y in India • Enlarge employees’ exposure to global best practices Empower- • Allow decentralized decision-making and wherever possible involve ment local managers in India. Non-financial • Despite financial factors, pay great attention to employees’ engagement Engagement factor such as career advancement, meaningful and challenging job, Factors and training development opportunities.
    17. 17. Conclusion (Cont’d) Specific Practices for China • Emphasize internal promotion and training opportunities instead of Internal overseas assignment, to attract and retain talents Promotion • Brand the company with strong commitment to Chinese market • Provide language and culture training for key local talents Culture • Sign long-term expatriate contract Diversity • Reflect Chinese culture on recruiting and evaluation standards Financial • Address financial engagement factors (base pay, retirement benefits Engagement and incentives) and career prospect to motivate employees Factors

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