Winning in vietnam hay group connie ma 2009

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Winning in vietnam hay group connie ma 2009

  1. 1. Winning in Vietnam 27th February 2009, Connie Ma AmCham, Sheraton Singapore
  2. 2. Vietnamese Economy and Inflation one of the highest in Asia ( 2008 ) © 2009 Hay Group. All Rights Reserved 2
  3. 3. Rising Salary Increase triggered by Rising Inflation in 2008/09 2009 Inflation forecast average is about 10% Source: EIU & PayNet 20083 © 2009 Hay Group. All Rights Reserved
  4. 4. Salary Movements - Sector © 2009 Hay Group. All Rights Reserved 4
  5. 5. Compensation Challenges
  6. 6. Pay Differentials (Vietnam=1) 6.0 Ratio of Guaranteed Cash 5.5 5.3 5.0 Clerical/Production Junior Management 4.3 4.0 Middle Management 3.8 Senior Management 3.2 3.0 3.0 2.3 2.0 2.0 1.8 1.5 1.6 1.5 1.3 1.3 1.4 1.2 1.1 1.1 1.2 1.0 1.0 0.0 China India Malaysia Singapore Hong Kong © 2009 Hay Group. All Rights Reserved Source: Hay Group PayNet, 2008 6
  7. 7. Why job “steps” matter? 16 15 Higher job 14 Higher job 13 Higher job Lower job Lower job Lower job 12 1 Step : „Career 2 Steps : 3 Steps : Risky Hay Ladder‟ Promotion Normal/Solid Promotion Group “The logical next Promotion Level step” © 2009 Hay Group. All Rights Reserved 7
  8. 8. Hay Group Salary Survey 2008 shows that Pay progression from one job to the next in middle management is 44% for Vietnam
  9. 9. Pay progression comparison (1 Step Pay Difference) 60% Junior Management Middle Management Senior Management Comparison - Base Salary 50% 44% Pay Progression across each management level 40% 40% 36% 35% 33% 31% 31% 30% 30% 30% 28% 28% 28% 27% 24% 23% 22% 22% 20% 19% 20% 18% 17% 15% 11% 12% 10% 0% Australia Japan Singapore Hong Kong Malaysia China Vietnam India Source: Hay Group PayNet, 2008 9 © -10% Hay Group. All Rights Reserved 2009
  10. 10. 1 step difference – middle management -by Job Families All Orgs Legal Corp. Affairs IT Eng H&E Admin Mkt Sales Prod Logistic HR F&A 100% 94% Average Base Salary 90% 80% 80% 70% 64% 60% 57% 56% 53% 52% 52% 50% 44% 42% 40% 30% 29% 25% 25% 20% 10% 0% All Orgs Legal Corp. IT Eng H&E Admin Mkt Sales Prod Logistic HR F&A Affairs Source: Hay Group PayNet, 2008 10 © 2009 Hay Group. All Rights Reserved
  11. 11. 2 steps difference HRL 17 HRL16 HRL 15 Average 2 Steps Pay Progression is 83% © 2009 Hay Group. All Rights Reserved 11
  12. 12. 2 steps difference – middle management -by Job Families All Orgs Sales H&E Cust Svcs Logistic IT Eng QA HR F&A Prod Mkt Project Mgt Corp. Affairs Admin 140% 120% 117% 113% 99% 100% 94% 83% 83% 79% 80% 69% 68% 68% 66% 65% 60% 42% 40% 38% 36% 20% 0% All Orgs Sales H&E Cust Logistic IT Eng QA HR F&A Prod Mkt Project Corp. Admin Svcs Mgt Affairs Source: Hay Group PayNet, 2008 12 © 2009 Hay Group. All Rights Reserved
  13. 13. Average age of employees working for MNCs in Vietnam On average, senior managers in Vietnam are 5 years younger than their Asian counterparts © 2009 Hay Group. All Rights Reserved 13
  14. 14. Average age of employees working for MNCs – Junior to middle management © 2009 Hay Group. All Rights Reserved 14
  15. 15. Average age of employees working for MNCs – Middle to Senior Management © 2009 Hay Group. All Rights Reserved 15
  16. 16. How are companies coping with Vietnam’s business environment?
  17. 17. Successful companies managed their compensation practices better Top 3 differences between high & low performing companies High Performer Low Performer Implement the right combination of 70% variable and fixed remuneration 38% Develop an effective incentive plan 70% for Managers 13% Largest Gap Establish a clear link between 59% individuals‟ compensation and performance 25% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Hay Group‟s Winning in Vietnam report, 2008 © 2009 Hay Group. All Rights Reserved 17
  18. 18. Six Challenges faced in Vietnam Establishment of 54% government relationships 71% Protection of Intellectual 55% Property 73% Fierce competition in 65% Vietnamese market 79% The biggest challenge is people Shortage of skilled Vietnamese workers 44% 72% Shortage of local management talent management 46% 84% Differences in Culture 54% 49% 0% How well is your firm coping with this issue? 90% How significant is this to your firm's operation? © 2009 Hay Group. All Rights Reserved Source: Winning in Vietnam, 2008 18
  19. 19. Strategies for people management in High Performing companies 13% Match employees to jobs based on required competencies 57% Develop an effective incentive 13% compensation plan for executives and managers 70% 13% Improve skills and competencies of managers 63% Low Performing 0% 20% 40% 60% 80% High Performing © 2009 Hay Group. All Rights Reserved Source: Winning in Vietnam, 2008 19
  20. 20. Organizations’ biggest concerns: 1. Retaining Top Talent / Critical Skills 2. Maintaining / Affording Competitive Pay 3. Maintaining Employee Engagement / Motivation 4. Career Development / Training 5. Recruiting Top Talent / Critical Skills The New PIT implemented in January 2009 © 2009 Hay Group. All Rights Reserved 20
  21. 21. In Closing Pay attention to your high performers. These are the people who build your business. Your competitors are eyeing them. © 2009 Hay Group. All Rights Reserved 21
  22. 22. Thank you Cảm on Connie_Ma@haygroup.com

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