Booz HR Challenges in the Automotive Industry EUCC v1.0 · PDF fileBooz & Company This...
Transcript of Booz HR Challenges in the Automotive Industry EUCC v1.0 · PDF fileBooz & Company This...
Booz & Company
This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
HR Challenges in the Automotive IndustryEUCC Seminar
Shanghai, 10 March 2011
Booz & Company 1
Introducing Booz & Company
HR Challenges in the automotive industry
Booz & Company 2
Booz & Company is a global management consulting firm with over 90 years experience serving the senior agenda of our clients
Booz & Company Profile
� Founded in 1914 in
Chicago by Edwin Booz
� Currently ~3,300
consultants in 60+ offices
around the world
� One of the first consulting
companies to enter the
PRC (1990)
Booz & Company Offices
� Atlanta� Chicago
� Cleveland� Dallas� Detroit� Florham Park� Houston
� Los Angeles� McLean
� Mexico City� New York City� Parsippany� San
Francisco
� Buenos Aires� Rio de Janeiro
� Santiago� São Paulo
North America
South America
� Amsterdam� Berlin� Copenhagen
� Dublin� Düsseldorf� Frankfurt� Helsinki� Istanbul
� London� Madrid� Milan
� Moscow� Munich� Oslo
� Paris� Rome� Stockholm� Stuttgart� Vienna
� Warsaw� Zurich
Europe
� Abu Dhabi� Beirut
� Cairo� Doha� Dubai� Riyadh
Middle East
� Beijing� Hong Kong� Shanghai
� Taipei� Bangkok� Delhi� Jakarta� Kuala Lumpur
� Mumbai � Seoul� Tokyo
Asia
� Adelaide� Auckland� Brisbane
� Canberra� Melbourne� Sydney
Australia/NZ
Booz & Company 3
Manager Magazine (Jingliren) recently ranked Booz & Company as the top strategy consulting firm in China
8.257.1386.14 Roland Berger
8.547.7487.52 McKinsey & Company
BrandAdaptabilityProfessional
CapabilityStrategy Management Consulting
8.247.6587.81 Booz & Company
8.327.3386.73 Boston Consulting Group
85.3 7.01 8.125 Bain & Company
8.227.3284.64 Bain & Company
8.447.4185.52 Booz & Company
BrandAdaptabilityProfessional
CapabilityOrganizations Consulting
8.537.4286.71 McKinsey & Company
8.247.3984.93 A.T. Kearney
83.2 7.35 8.125 Boston Consulting Group
“Booz & Company…swiftly adapts to China’s environment, wins clients by delivering results. Strong client recognition is key reason why Booz won.”
—— Manager Magazine
Booz & Company 4Booz & CompanyDATE
Consumer &Media
Aerospace,Defense &Transport
Tele-Communications
Health
Energy &Utilities
OrganizationChange
LeadershipOperations
InformationTechnology
Function
Industry
Strategy
Development
Implementation
Financial
Services
Automotive
PublicSector
Our automotive team operates in a global matrix structure to ensure both industry and functional expertise - e.g., HR Strategy
Strategy
Booz & Company 5
We are a recognized thought leader in the area of World Class HR and Talent Management
� The Katzenbach Center focuses on the development and application of innovative ideas for culture, organization, leadership, and human capital, based on a guiding philosophy of client-based innovation
� The Center promotes new thinking on achieving breakthroughs in higher performance, developed through active collaboration with clients and thought leaders around the world
� The Center’s focus on culture has included studying more than 300 culture change case studies as well as compiling a meta-analysis of the academic research on culture over the last 30 years
Booz & Company 6
For example, we are about to publish a major new study on the battle for female talent in emerging markets
� Collaboration with the Center for
Work-Life Policy (CWLP)
� China launch event scheduled on
March 22nd in Beijing
� Key note address by Dr. Edward
Tse, Chairman of Booz &
Company Greater China
“Women Hold Up Half The Sky”- Mao Zedong
Booz & Company 7
Introducing Booz & Company
HR Challenges in the automotive industry
Booz & Company 8Booz & CompanyDATE
8
Complex
Competitive
Environment
Complex
Market
Environment
� Currently the most competitive automotive market in the world
� Highly complex network of JVs and other partnerships
� Significant industry consolidation already underway
� Very large market with significant regional variation in demand patterns
� Demand shifting from more developed coastal cities to lesser developed
interior markets
� Underdeveloped lease/finance market
� Large government investments in alternative energy vehicles
Source: Booz & Company analysis
Complex
Regulatory
Environment
� Automotive industry considered a strategic sector for the Chinese economy
as a whole
� Industry development actively controlled by the Chinese government
While offering great potential, China is also an exceptionallycomplex automotive market -- success is not a given
Booz & Company 9
Attracting, developing, and retaining the best local talent willbecome crucial as more value chain activities migrate to China
Service
Sales &
Distribut
-ion
Market-
ing
Manufact
uring Sourcing
Product
Develop
ment
R&D
Service
Sales &
Distribut
-ion
Market-
ing
Manufact
uring Sourcing
Product
Develop
ment
R&D
Stage 1Circa early
to mid 1990s
Stage 2Circa mid
to late 90s
Service
Sales &
Distribut
-ion
Market-
ing
Manufact
uring Sourcing
Product
Develop
ment
R&D
Service
Sales &
Distribut
-ion
Market-
ing
Manufact
uring Sourcing
Product
Develop
ment
R&D
Stage 3Early 2000s
Stage 4Present to
5-10 years
hence
Value Chain Migration In China Evolving Local Talent Requirements
� From manufacturing to
extended value chain activities,
including R&D, planning,
branding, and financial
functions
� Greatest shortage at mid-
management level - skilled
young professionals
Booz & Company 10
Future growth in lower tier markets will present additional HR challenges
Source: FOURIN, Booz & Company analysis
Passenger Vehicle Market Size and Growth by Region
Anhui 116 (38%)
Yunnan 113
(16%)
Henan222
(51%)
Hebei 286
(31%)
Hainan 29
(31%)
Gansu 44
(39%)
Jilin 84 (19%)
Hunan 143
(40%)
Hubei 120
(27%)
Jiangxi 73 (35%)
Jaingsu 407 (18%)
Shanxi 192
(33%)
Shandong 439 (23%)
Sichuan
236(28%) Chongqing 73 (28%)
Shanghai 151 (7%)
Xinjiang 71
(31%)
Tibet 7 (NA)
Qinghai 19
(53%)
Tianjin 134 (14%)
Inner Mongolia
129 (54%)
Fujian 140 (32%)
Beijing 346 (10%)
Guangxi 81
(30%) Guangdong 522 (19%)
Zhejiang 372 (15%)
Heilongjiang 106 (37%)
Ningxia 23
(48%)
Guizhou 59
(27%)
Liaoning 180 (23%)
Xianxi 121
(38%)
Coastal
Evolving Local Talent Requirements
� Attracting and developing new
talent in regional lower-tier
markets
� Transferring and retaining
existing talent from major Tier
1 marketsCAGR (05-08)
<10%
10%~20%
20%~30%
30%~40%
40%~
Booz & Company 11
China’s talent shortage is due to both demand and supply factors, which together have created a fiercely competitive labor market
Demand Factors
� Rapid economic growth over the last
thirty years
� Significant FDI in local operations
required for MNCs to be successful
� High need for skilled as opposed to
unskilled labor
Supply Factors
� Relatively recent transition to a
market economy
� Low education levels in areas that
were under-developed under the
planned economy
� China’s “lost generation”
� 94% of top MBA graduates have been
approached by another company,
person, or recruiter within three years
after graduation
� 80% of those who work for MNCs don’t
plan to stay at their current job for more
than two years
� 55% actually change jobs within three
years
� 84% live in Shanghai or Beijing
Intense Competition For Young Professionals
Booz & Company 12
MNCs should try to “push” employees to fill stretch roles and “pull” them through a robust personal development system
Methods to “Push” Employees
� Create challenging environments with
opportunities to grow
� Empower them with decision making
autonomy and ownership
� Challenge them to learn new skills in
training programs
� Create small business environments within
your business – and run them as such – in
order to satisfy the entrepreneurial
aspirations of many young professionals
� Establish a straight-forward and fair
evaluation system that is based on
performance not seniority
Methods to “Push” Employees
� Give your young professionals a chance to
learn “Soft Skills”
� Create clear career paths
� Help them uncover reasons to be
passionate about their jobs and their
company
� Provide strong mentors
� Acknowledge their achievements by
recognizing their work and their ability to
reach their potential
Booz & Company 13
Leading MNCs develop an integrated human resource strategy to build a locally differentiated advantage in talent management
� Clearly define target sources for recruiting and set rigorous selection criteria for new hires
� Actively engage with potential candidates and build brand in universities
� Recruit more than required immediately to build a talent reserve for future growth
� Build local senior management team for long-term development
� Create outstanding training programs
� Clearly map career development paths that are tailored to China
� Integrate local talent into global networks
� Maintain competitive compensation and benefits packages to retain staff
� Develop consistent company culture to strengthen ties among company and employees
� Make strong commitment to Chinese market development
RetainingDevelopingRecruiting
Sample Best Practices
Booz & Company 1414
Our own approach in Greater China blends local expertise with the global capabilities of the firm
�Beijing
Shanghai�
Hong Kong�
Taipei�
The core team is further augmented by a
network of part-time professionals across
China – mostly academics, researchers and other professionals
Booz & Company Greater China
consultants are based in its Shanghai, Beijing, Hong Kong and Taipei offices,
working as one team to service its clients
in greater China
The local team is supplemented by
Booz & Company global transferswho help build capabilities and
manage/lead projects “on the ground”
Booz & Company draws on a global pool of experts for different industries and functions
Our consultants are primarily localsreturning to China with overseas education
Some also have work experience with other
MNCs prior to joining Booz & Company
All professionals offer a broad range of experience and business contacts