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.

1. Kelly Services Marketing Information – Proprietary and Confidential – February 2013

2. 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 Commerce
Sources: News articles Kelly Services Marketing Information – Proprietary and Confidential – February 2013

3. 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 China
Sources: Tower Watson, KGWI, News articles
Kelly Services Marketing Information – Proprietary and Confidential – February 2013
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4. 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
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5. Talent Shortage Employers have difficulty filling positions
Key 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
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6. Skill Gaps Key verticals demand top talent
High Tech
•Shortage of skilled laborers: Due to the IT market’s growth in the country, the demand for IT professionals also
increased. From 90,000 job openings in May 2012, demand leaped to 260,000 in August of the same year. The result
is 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 of
long-standing firms have been unable to train their own employees. This has led them to fish in the small pond of
high-potential graduates and experienced managers with the right functional capabilities, leadership potential, and
language skills.
•Competition for talent has forced wages upward: Competition for scarce resources and talent has led to high
employee 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 world's main energy firms have a presence in China, and many
foreign oil majors also have a stake in the Chinese energy companies. These include well-known international giants such as
Danish 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 energy
market, and are in need of more employees.
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7. 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%.
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9. 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
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10. 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)

11. 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%

12. 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%

14. 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

15. 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

16. 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%

17. 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%

18. 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…

21. 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%

22. 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%

23. HINDSIGHT

24. 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?

25. 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?

26. 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…

28. 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.

29. 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

30. Thank You!
Pam Berklich– pam.berklich@kellyocg.com
www.kellyocg.com

31. APPENDIX
Addl slides for reference – not utilized in notes/presentation

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. 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.
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32

33. 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
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34. 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 Generation
Source: 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
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35. 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 Generation
Source: 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
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36. 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 Generation
Source: 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
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37. 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

38. RESEARCH HEADLINES: LEADERSHIP
DISCONNECT
• 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

39. LEADERSHIP STYLE:
APAC

40. MANAGERIAL INSPIRATION:
APAC

41. FEEDBACK ON EMPLOYER:
APAC

42. ORGANIZATIONAL ANALYSIS: LEADERSHIP
DISCONNECT
• 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