Deloitte webcast by Rohit Talwar on China Futures 09 03 06

1. China Issues Presents:
Leading Practices for Human Capital
Management in Today’s China
Clarence Kwan, Dick Kleinert, Jungle Wong
October 25, 2006

2. Contents
1. Overview of HC market in China
2. Talent Management issues in
China
3. Leading Practices in Human
Capital Management
Copyright © 2006 Deloitte Development LLC. All rights reserved.

3. Overview of China’s Labor Market
Among the city labor market, SOE’s
The city labor market across China
have the largest share of the labor
has seen a stable annual increase of
market. Employment at SOE’s has
approximately 3%. The market
decreased while at MNC’s it has
includes all types of companies in
increased along with more and more
cities and towns.
foreign capital flowing into China.
City labor market in China Unit:
Million
SOE vs. MNC in labor market
270 265
76
265 72
80 69 68 Percentage
257
260
255 60
249
250
SOE
245 40
240
240 MNC
20
235 5.6
4.5
3.9
3.5
230
0
2001 2002 2003 2004
225
2001 2002 2003 2004
Sources: Ministry of Statistic Bureau
1
Copyright © 2006 Deloitte Development LLC. All rights reserved.

4. The Trend of Labor Supply and Demand in China
Since 2001 the relationship between labor supply and demand has become
more balanced. In 2006 the ratio of supply and demand is predicted to
reach 1:1. China will no longer have an excess of labor supply.
Additionally, in 2009 China may face labor shortage problems.
The change of labor supply and demand from 2001 to 2005
Unit(00,000)
2nd quarter 2001
1st quarter 2002
2nd quarter 2002
3rd quarter 2002
4th quarter 2002
1st quarter 2003
2nd quarter 2003
3rd quarter 2003
4th quarter 2004
1st quarter 2005
2nd quarter 2005
3rd quarter 2005
4th quarter 2005
1st quarter 2001
3rd quarter 2001
4th quarter 2001
4th quarter 2003
1st quarter 2004
2nd quarter 2004
3rd quarter 2004
Source: Ministry of
Labor and Social Demand
Security, and China Supply
Youth Newspaper Ratio of Demand
over Supply 2
Copyright © 2006 Deloitte Development LLC. All rights reserved.

5. China is Facing Talent Shortage Problems
Despite China’s 1.3 billion population, pockets of talent shortage exist.
The cause of this newly emerging phenomenon is that the job seekers’
skill sets do not match the job requirements.
The fields that suffer labor shortage in China:
Rate
Qualified
2.08
Manager • Rapid economic and social change
has spurred a skills shortage that is
Sales 1.06
expected to escalate in the next few
years.
Technician 1.53
• The shortage in management
2.25
candidates is slowing the expansion
Skilled
Technician of foreign businesses.