Economic Overview Global, Asia Pacific and China · PDF fileIncreasing focus on Asia Pacific...

Economic OverviewGlobal, Asia Pacific and China

MERCER 1

World GDP and InflationGDP goes up and Inflation goes down from 2013 to 2015

Source: IMF World Economic Outlook (April, 2014)

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2008 2009 2010 2011 2012 2013 2014 2015

Emerging market anddeveloping economies Inflation 9.2 5.4 5.9 7.3 6.0 5.8 5.5 5.2

Emerging market anddeveloping economies GDP 5.9 3.1 7.5 6.3 5.1 4.7 4.9 5.3

World Inflation 6.0 2.5 3.6 4.9 3.9 3.6 3.5 3.4

World GDP 2.7 -0.4 5.2 3.9 3.2 3.0 3.6 3.9

MERCER 2

Shift in Global Business LandscapeDriving corporate growth in Asia Pacific

Source: APAC Exec Brief, August, 2014, IMA Asia

Asia Pacific still leading the pack

To cash in where the growth is today, and for the foreseeable future,

Increasing focus on Asia Pacific

4.3% GDPgrowth1.1% GDP

growth2.0% GDP

growth

Asia Pacific vs. Developed markets

MERCER

Regional GDP, Inflation & Salary Increase

0%

2%

4%

6%

8%

10%

12%

3

Source: IMA Asia Brief Aug 2014Mercer Global Compensation Planning Report 2014 July

*Mercer TRS Surveys 2014

AU CN HK ID IN JP KR MY NZ PH SG TH TW VN

GDP 3.0% 7.4% 2.5% 5.0% 4.9% 0.4% 3.6% 6.2% 3.3% 6.2% 3.2% 1.1% 3.8% 5.0%

Inflation 2.6% 2.5% 3.8% 5.7% 7.3% 2.7% 1.5% 3.5% 2.0% 4.6% 2.1% 2.3% 1.7% 4.9%

Salary Increase 3.5% 7.5%* 4.5% 10.0% 11.0% 2.1% 5.0% 5.6% 3.0% 7.0% 4.5% 5.9% 3.8% 10.7%

MERCER

China on Track for Moderate GrowthGDP per capita

4

1. Source: IMF World Economic Outlook (April, 2014).2. GDP is expressed in current U.S. dollars per person. Data are derived by first converting GDP in national currency to U.S.

dollars and then dividing it by total population.3. For the ranking, there are 186 countries and regions with the data of GDP per. capita

China’s Ranking ofGDP per capita

Year Ranking

2011 91

2012 88

2013 84

2014(F) 82

2015(F) 81

54346078

67477333

7961

2011 2012 2013 2014(F) 2015(F)

MERCER

China’s Total Debt vs. GDPRaised rapidly since 2008 economic risk increased

5Source: Financial Times reported on July 22, 2014, citing estimates from Standard Chartered.

MERCER

50.2

54.1

45

46

47

48

49

50

51

52

53

54

55 PMI ManufacturingPMI Service

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

China PMI : Manufacturing and Services

6

Source: HSBC September, 2014

2013 2014

Service

Highest

since Mar 2013

Down Again

after 3-month upManufacturing

MERCER

China GDP Growth Rate Forecast

7

Source: China Forecast Book, IMA Asia， 2014 Q3

0

3

6

9

12

15

2010 2011 2012 2013 2014 2015 2016

Manufacturing Construction Services GDP

CHINA: GDP Growth by Component, %

MERCER

-20

-10

0

10

20

30

40

Gro

wth

Perc

enta

ge(Y

ear-

on-y

ear)

China FDI Growth

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

8

China Foreign Direct Investment (FDI)

Source : Ministry of Commerce of the People’s Republic of ChinaSource: World Investment Report 2014

United Nations Conference on Trade and Development

2011 2012 2013 2014

100124

2013 FDI Flow

FDI Outflow FDI InflowUSD, Billion

2014

Outflow > Inflow

MERCER

Global Innovation Index rankings

9

Innovation – A Path to TransformationChina has improved its innovation from 2013 to 2014

Country/Economy Score(0-100) 2014 Rank 2013 Rank

Switzerland 64.78 1 1

United Kingdom 62.37 2 3

Sweden 62.29 3 2

United States of America 60.09 6 5

Hong Kong (China) 56.82 10 7

Japan 52.41 21 22

China 46.57 29 35

Russian Federation 39.14 49 62

Brazil 36.29 61 64

India 33.70 76 66

Source: The Global Innovation Index 2014Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO)

MERCER 10Source: CBN Weekly 2014

MERCER

6.0% 4.0% 2.0% 0.0% 2.0% 4.0% 6.0%

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485-8990-9495-99100+

Asia

Population Demographics – Gender

11

2010

2030

Source: UN Population Statistics 2012

Male Female

MERCER 12

Population Demographics – Median Age

Source: UN World Population Prospects 2012

0

5

10

15

20

25

30

35

40

45

50

55

India ASEAN USA Australia China South Korea Japan

Median Age of the Total Population(Years)

1990 2010 2030

MERCER

China’s Changing DemographicsAge Group between 20 - 59

13

Unit: thousand

The forecast of the future population adopts medium fertility rate assumption.Source: World Population Prospects: The 2012 Revision, United Nations

50,000

100,000

150,000

200,000

250,000

1990 1995 2000 2005 2010 2015 2020 2025 2030

20-29

30-3940-49

50-59

MERCER 14

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

North America Europe andCentral Asia

Asia and Pacific Latin Americaand the

Caribbean

Middle East andNorth Africa

Sub-SaharanAfrica

• Overall index is unweighted average of the four pillar scores• Scores are weighted by population; population data from United Nations Department of Economic and

Social Affairs, World Population Prospects, rev. 2012.

Source: The Human Capital Report, World Economic Forum, 2013The report is published in collaboration with Mercer

Human Capital Index – by Region

Health andWellness

Education

Workforce andEmployment

EnablingEnvironment

Human Capital Index

MERCER

Human Capital Index - China Rank #43

15

Country Rank ScoreSwitzerland 1 1.455

Finland 2 1.406

Singapore 3 1.232

Netherlands 4 1.161

Sweden 5 1.111

Japan 15 0.948

United States 16 0.920

Malaysia 22 0.644

China 43 0.186

Thailand 44 0.158

Russian Federation 51 0.010

Indonesia 53 0.001

Brazil 57 -0.054

Mexico 58 -0.057

Vietnam 70 -0.202

India 78 -0.270

Source: The Human Capital Report, World Economic Forum, 2013

MERCER

Summary

16

• China still has strong-to-moderate GDP growth rate in next 3years.

• Economic risk is raising due to stimulation.

• China may become a FDI net outflow country in 2014.

• China is on the way improving its Human Capital Index andinnovation ranking in the world, while the aging population willbe a issue, China has to seek way to offset its negative impact.

New Technology BringsNew Practices of Talent Management

MERCER 18

HR Revolution with business change

Hiring Communication

Learning&

Development

Saving

MERCER

From Graduates’ points of view

19

• Strong financialpower

• Competitivebenefits

• Innovative culture• Inspiring leadership

• Attractive companyproducts/services

• Innovative culture

• Fast promotion• Job Security

• Performance-basedbonus

• Fast promotion• Entrepreneurship

environment

• Grey area• Compensation for

OT

Data source: Universum

But lack of…

MERCER

Graduate Top 3 Preferences

20

Data source: Universum

MNCSOE

POE OWN-BIZSTART-UP

MERCER 2124 October 2014

MERCER

FIFA World Cup and Social Network

22

Data source: Peel, eMarketer

350,000tweetsPer day

1,000 +milliondiscussion

62%out of500 million

MERCER

Revolution in Recruitment Channel

23

MERCER

Revolution in Recruitment Channel

24

MERCER

And Now…

25

MERCER

Once upon a time…

26

“……以最饱满的诚意，招聘最优秀的人才加盟，共同谱写辉煌的未来！” 我们将遵循公平、公正的

原则择优录用，同时提供具有竞争力的薪酬待遇和广阔的发展空间，欢迎优秀人才积极报名应聘。

MERCER

And Now…

27

“他就是传说中最理性的感性的管理者…无论多少关键词都无法代表他的全部现在快加入…吧让我们一起创造属于我们的下一个神话！”

“希望有美感，性格外向活泼敢想敢做，梦想无限的亲们踊跃加入！”

“领导炫酷：工作时带领你，指点江山帅你一脸，不定期释放傲娇卖萌特技…只要你来，绝不辜负!”

MERCER

CommunicationCEO Corner

28

MERCER

Learning & Development

29

MERCER

85%Chineseemployees are notgood at financialplanning andinvestment

MERCER 3333

Investment Platform

Financial ManagementSeminar

Smart Saving

Customized FinancialManagement Solution

Smart SavingThe new thoughts on Benefits

Do not forget, you are an inflation-linked bond!

MERCER

0

1

2

3

4

5

34

I have trust in Company Leadership, who has cleargoals and is guiding the company in right direction

Company Culture

Standardized Management

Colleagues Relationship

Team Building Activities

Flexible Working Hours

Health Issue

Recognition for individualperformance

Democratic and innovativeenvironment

Open door policyfor complaints and appeals

Convenient Location

Data source: 2014 Mercer Retention Survey

Leadership and Retention - Key to Business

MERCER

Hiring Communi-cation

Learning &Developme

ntSaving

35

HR-Marketing

Transpa-rency

Innovation HR -Finance

Compensation and Benefit Trends

MERCER

0

100

200

300

400

500

600

700

Auto Chemical Consumer HighTech

Life Science GD AllOffice

GD AllManu

20102011201220132014

37

Increasing of Mercer survey database from 2010 to 2014

No. of Survey Participants

Source: 2011-2014 Mercer China TRS

MERCER

China on Track for Moderate GrowthGDP, CPI, salary increase and turnover rate

10.411.6

13

9.69.1

10.49.3

7.8 7.7 7.4

-2

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(E) 2015(F)

GDP CPI(Inflation Rate) Salary Increase Staff Voluntary Turnover

2014 1st half year

38

Source : National Bureau of Statistics of ChinaIMA Asia (Aug 2014)

2004-2014 Mercer Total Remuneration Survey

6.7

12.213.5

14.6

11.3

15.716.3

13.6 13.613.4

7.2

8.68.2 8.7

6.9

8.5

9.6 9.4

8.27.9

7.5 7.7

1.8

4.8

1.5

5.9

-0.7

3.3

5.4

2.6 2.82.52.6

MERCER

2009 2010 2011 2012 2013 2014 (E) 2015 (F)Auto (1st Tier) 7.1% 8.4% 9.7% 9.4% 8.5% 8.2% 8.3%Chemical (1st Tier) 6.0% 8.2% 9.1% 9.0% 8.2% 7.5% 7.8%Consumer (1st Tier) 6.8% 7.9% 8.6% 8.2% 8.1% 7.7% 7.8%High-Tech (1st Tier) 5.7% 8.2% 8.9% 8.1% 8.3% 7.5% 8.2%Life Science 8.3% 8.4% 8.8% 9.1% 8.5% 8.1% 8.4%Guangdong All Industries Office 6.8% 8.1% 9.0% 8.7% 7.9% 7.4% 7.7%Guangdong All Industries Manufacturing 6.8% 8.1% 9.0% 8.4% 7.8% 7.3% 7.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

Salary Increase Rate from 2009 to 2015Comparison across industries


MERCER

2008 2009 2010 2011 2012 2013Auto(1st Tier) 10.5% 11.7% 14.6% 15.1% 13.2% 12.1%Chemical(1st Tier) 8.7% 6.9% 9.5% 10.6% 9.6% 8.3%Consumer(1st Tier) 15.0% 13.8% 18.9% 17.3% 18.3% 17.8%High-Tech(1st Tier) 14.6% 8.7% 14.6% 15.1% 11.1% 14.9%Life Science 16.6% 15.2% 18.7% 16.9% 14.3% 15.2%Guangdong All Industries Office 13.7% 12.1% 13.5% 16.4% 15.2% 15.0%Guangdong All Industries

Manufacturing 22.0% 16.6% 20.5% 20.1% 19.2% 21.5%

5.0%

7.5%

10.0%

12.5%

15.0%

17.5%

20.0%

22.5%

25.0%


Turnover rises in 2014 first halfVoluntary staff turnover rate across years

20131st Half

20141st Half

7.6% 8.1%4.6% 5.0%8.7% 8.6%6.6%6.4% 7.9%7.6% 8.4%

10.0% 12.9%

MERCER

Auto(1st Tier)

Chemical(1st Tier)

Consumer(1st Tier)

High-Tech(1st Tier) Life Science Guangdong All

Industries OfficeGuangdong All

IndustriesManufacturing

2011 1.4 1.8 3.6 1.5 2.4 4.3 3.82012 1.8 4 5.4 2.8 1.8 4.7 4.82013 2.8 4.3 5.1 6.3 4.9 4.7 4.8

0

1

2

3

4

5

6

7

Involuntary Turnover 2011-2013

%

Source: Mercer 2014 China TRS report

MERCER

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Finance HR Marketing R&D Sales Supply&Logistics

2011

2012

2013

Turnover Rate of Guangdong All Industries Office by Function(Recent 3 Years)

Source: Mercer 2014 Guangzhou All industry Office TRS report

MERCER

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Finance HR Marketing R&D Sales Supply&Logistic

2011

2012

2013

Turnover Rate of Guangdong All Industries Office by Function(Recent 3 Years)

Source: Mercer 2014 Guangzhou All industry Manufacturing TRS report

MERCER

Auto

Chemical

Consumer

Hi-Tech

Life Science

Guangdong Allindustry-Office

Guangdong Allindustry-Manu

Talent market reflect economy: hiring intention shrinks in 2014hiring intention also shrinks in 20132013-2014 hiring intention in next 12 months


Hiring intention in 2013AddingHiring intention in 2014 ReducingNo Change

Adding ReducingNo Change

52%

59%

72%

59%

58%

52%

73%

43%

37%

22%

37%

39%

41%

23%

5%

4%

6%

4%

3%

7%

4%

47%

54%

63%

52%

52%

52%

69%

44%

39%

31%

42%

39%

40%

28%

9%

6%

6%

6%

9%

8%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

MERCER

Executive Mgmt - Sales Mgmt - NonSales Prof - Sales Prof - Non

SalesPara-Prof -

White Collar Overall

Auto(1st Tier) 25% 22% 20% 32% 18% 18% 21%Chemical(1st Tier) 23% 29% 19% 33% 17% 16% 19%Consumer(1st Tier) 26% 41% 18% 47% 14% 13% 19%High-Tech(1st Tier) 26% 35% 20% 46% 18% 17% 22%Life Science 29% 57% 22% 87% 17% 16% 23%Guangdong All Industries Office 26% 41% 20% 49% 16% 15% 21%Guangdong All Industries Manufacturing 25% 19% 17% 15% 20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Source: 2014 Mercer China TRS

2014 Prize for PerformanceTarget variable bonus as percentage of base salary

3 months payment

2 months payment

MERCER

77%72%

82%

70%

84%85%

2014 Pay Mix PolicyGuangdong All industries - Office

Executive Management-sales

Management-non sales

Professional-sales

Professional-non sales

VariableCash

GuaranteeCash

Source: 2014 Mercer China TRS – Guangdong All Industries Office

Para-Professional-White Collar

23%28%

18%

30%

16%15%

MERCER

76% 73%

82%

71%

83% 83%82%

24%27%

18%

29%

17% 17% 18%

2014 Pay Mix PolicyGuangdong All industries - Manufacturing

Executive Management-sales

Management-non sales

Professional-sales

Professional-non sales

VariableCash

GuaranteeCash

Source: 2014 Mercer China TRS – Guangdong All Industries - Manufacturing

Para-Professional-White Collar

ParaProfessional– Blue Collar

MERCER

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Source: 2013 & 2014 Mercer China TRS – Guangdong All Industries Office

Year Over Year Comparison 2014 vs. 2013Guangdong All Industries – Office (Annual Total Cash – Actual)

Staf

fPr

ofM

gmt

Exec

utiv

e

Year Movement

2014 vs. 2013 +1.6%

2013 vs. 2012 +1.9%

2012 vs. 2011 +10.8%

20142013

P25 Med P75

Position Class

RMB

MERCER

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000404142434445464748495051525354555657585960

Source: 2013 & 2014 Mercer China TRS – Guangdong All Industries Manufacturing

Year Over Year Comparison 2014 vs. 2013Guangdong All Industries – Manufacturing (Annual Total Cash – Actual)

Para

-Pro

fPr

ofM

gmt

Exec

utiv

e

20142013

P25 Med P75

Position Class

RMB

Year Movement

2014 vs. 2013 +1.8%

2013 vs. 2012 +7.2%

2012 vs. 2011 +5.7%

MERCER

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64

Annu

alB

ase

Sala

ry(T

hous

and

RM

Bpe

rann

um)

Position Class

2014 2013

Year Over Year Comparison 2014 vs. 2013Guangdong All Industries – Manufacturing (Annual Base Salary)

Source: 2013 & 2014 Mercer China TRS – Guangdong All Industries Manufacturing

Overall2014 vs. 2013 : 6.3%

Para-Professional2014 vs. 2013 : 8%

Professional2014 vs. 2013 : 7%

Management2014 vs. 2013: 5%

Executive2014 vs. 2013 : 5%

RMB

MERCER

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64

Annu

alTo

talC

ash

-Act

ual

(Tho

usan

dR

MB

pera

nnum

)

Position Class

2014 2013

Year Over Year Comparison 2014 vs. 2013Guangdong All Industries – Manufacturing (Annual Total Cash - Actual)

2013 & 2014 Mercer China TRS – Guangdong All Industries Manufacturing

Overall2014 vs. 2013 : 6.8%





RMB

MERCER

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64

Annu

alB

ase

Sala

ry(T

hous

and

RM

Bpe

rann

um)

Position Class

2014 2013

Year Over Year Comparison 2014 vs. 2013Guangdong All Industries – Office (Annual Base Salary)

2013 & 2014 Mercer China TRS – Guangdong All Industries Office

Overall2014 vs. 2013 : 3.8%





RMB

MERCER

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64

Annu

alTo

talC

ash

-Act

ual

(Tho

usan

dR

MB

pera

nnum

)

Position Class

2014 2013

Year Over Year Comparison 2014 vs. 2013Guangdong All Industries – Office (Annual Total Cash - Actual)

2013 & 2014 Mercer China TRS – Guangdong All Industries Office

Overall2014 vs. 2013 : 3%





RMB

MERCER

47,921 152,514

394,270

1,151,317

41,977 140,373

369,060

1,101,560

37,594 118,629

310,813

1,046,301

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Para-Professional Professional Management ExecutiveShanghai Beijing Guangzhou&Shenzhen

2.63.2 4.1

2.82.6 3.3

3.12.9 3.7

Pay Progression to Higher LevelSH All - Office vs. BJ All – Office vs. GZ&SZ All – Office (Annual Base Salary)


MERCER

58,728188,192

477,654

54,466180,400

453,790

47,229150,159

389,618

1,304,488

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000


3.33.2 3.2

2.52.5 2.6

3.13.0 3.3

Pay Progression to Higher LevelSH All - Office vs. BJ All – Office vs. GZ&SZ All – Office(Annual Total Cash)


MERCER

45,441 150,633

386,559

1,087,457

38,738 125,028

347,309

857,393

34,641 100,840

271,003

683,345

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000


3.23.3 2.9

2.82.6 2.7

2.52.8 2.5

Pay Progression to Higher LevelSH All - Manu vs. BJ All – Manu vs. GZ&SZ All – Manu(Annual Base Salary)


MERCER

61,082189,301

470,094

1,326,231

52,024166,544

429,234

1,159,677

45,670 124,849

340,271

917,004

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000


3.23.1 2.7

2.62.5 2.7

2.72.8 2.7

Pay Progression to Higher LevelSH All - Manu vs. BJ All – Manu vs. GZ&SZ All – Manu(Annual Total Cash)


MERCER

-

50

100

150

200

250

300

350

400

450

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

Annu

alB

ase

Sala

ry(T

hous

and

RM

Bpe

rann

um)

Guangzhou Shenzhen Dongguan

2014 Comparison By LocationsGuangdong All Industries – Manufacturing (Annual Base Salary)

Source: Mercer 2014 China TRS – Guangdong All Industries Manufacturing

RMB

StaffGZ vs. SZ: 3%

GZ vs. DG: 13%

ProfessionalGZ vs. SZ : 4%

GZ vs. DG : 15%

ManagementGZ vs. SZ : 3%

GZ vs. DG : 2%OverallGZ vs. SZ : 3.3%GZ vs. DG : 10%

MERCER

What’s in employee's mind?

MERCER

0.00%

0.50%

1.00%

1.50%

2.00%

学士

硕士

Hiring needs for fresh graduate?All industry- Guangzhou & Shenzhen

Bachelor VS. Master

Fresh needs as percentage of total headcount.Source: 2014 Fresh graduate survey

Bachelor

Master

MERCER

0

20000

40000

60000

80000

100000

120000

P75

P25

MedianAverage

How do we pay our new generation?Starting salary trend –Base salary

Source: 2014 Fresh graduate survey2014 Guangdong All Industries Office

MasterBachelor

MERCER

45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62

Number of incumbent

Less

More

Career ladder

Career ladder

3 years

3 years

2 years1 years

4 years

Entry level to executive

v13 years experiencev15 times of salary


Junior Prof. Prof. & Sr. Prof. Supervisor Mgr. Sr. Mgr. Executive

MERCER

Celebrate for 10 years graduation.


ALL

INDUSTRIES

MERCER

BenzBMW

General MotorsToyota

Volkswagen

Auto BASFBayer

Dow ChemicalDuPontSABIC

Chemical

ConsumerJohnson & Johnson

MondelezNestleP&G

Unilever

High TechInternet

Multi-industry

Petroleum

Life Science

CiscoHPIBMIntel

Microsoft

AlibabaBaidu

Tencent

EmersonGE

HoneywellPhilips

Siemens

BPChevron

ExxonMobilSchlumberger

Shell

AstraZenecaBayerEli LillyPfizerRoche

2014 Benchmarking Company-China

MERCER

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64

Annu

alTo

talC

ash

(Tho

usan

dR

MB

pera

nnum

)

Position Class

Benchmarking Companies (BK)1st Tier Cities

2014 Comparison Benchmarking VS. 1st Tier CitiesAnnual Total Cash – Actual


OverallBK vs. 1st Tier Cities : 13%

Para-ProfessionalBK vs. 1st Tier : 28%

ProfessionalBK vs. 1st Tier : 12%

ManagementBK vs. 1st Tier : 5%

ExecutiveBK vs. 1st Tier : 7%

RMB

MERCER

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64

Annu

alTo

talC

ash

(Tho

usan

dR

MB

pera

nnum

)

Position Class

Benchmarking Companies (BK)Guangdong All Industries Office

2014 Comparison Benchmarking VS. Guangdong All IndustriesOfficeAnnual Total Cash – Actual


OverallBK vs. GD 29%

Para-ProfessionalBK vs. GD: 48%

ProfessionalBK vs. GD : 24%

ManagementBK vs. GD: 21%

ExecutiveBK vs. GD : 24%

RMB

MERCER Source: 2014 Mercer China TRS

Salary Increase Rate by Career Level Overall vs. BenchmarkingAll Industries – Guangdong Office vs. China Benchmarking

2012(Actual)

2013(Actual/

Estimate)

2014(Forecast)

ShanghaiAll Benchmarking Shanghai

All Benchmarking ShanghaiAll Benchmarking

Executive

ManagementSales

ManagementNon Sales

ProfessionalSales

ProfessionalNon Sales

Para-ProfessionalWhite Collar

Overall

2012(Actual)

2013(Actual/

Estimate)

2014(Forecast)

ShanghaiAll Benchmarking Shanghai

All Benchmarking ShanghaiAll Benchmarking

Executive 8.7% 8.5% 8.3%

ManagementSales 9.1% 9.0% 8.6%

ManagementNon Sales 9.0% 8.6% 8.6%

ProfessionalSales 8.9% 8.7% 8.6%

ProfessionalNon Sales 9.1% 8.7% 8.7%


9.0% 9.0% 8.6%

Overall 8.8% 8.1% 8.3%

2013(Actual)

2014(Actual/

Estimate)

2015(Forecast)

GuangdongAll Benchmarking Guangdong

All Benchmarking GuangdongAll Benchmarking

Executive 7.8% 8.3% 7.3% 7.9% 7.6% 8.0%

ManagementSales 8.3% 8.5% 7.7% 8.1% 7.8% 8.3%

ManagementNon Sales 8.2% 8.6% 7.9% 8.0% 7.9% 8.4%

ProfessionalSales 8.2% 8.6% 7.8% 8.1% 8.0% 8.3%

ProfessionalNon Sales 8.4% 8.8% 8.0% 8.2% 8.0% 8.6%


8.1% 8.7% 7.9% 8.0% 7.9% 8.4%

Overall 7.8% 8.3% 7.4% 7.9% 7.7% 8.0%

MERCER Source: 2014 Mercer China TRS

Benchmarking companies turnover rate are lower than all industryStaff Turnover and Staff Retrenched

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Staff Turnover

Beijing OfficeBeijing MFGBK

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Staff Retrenched

GuangdongOfficeGuangdongMFGBK

MERCER

Market prevalence between benchmarking companies and allindustries

24 October 2014

97%

79%

42%

29%

24%

82%

0%20%40%60%80%100%

Life Insurance

Housing

Retirement

High-end Medical

Flexible Benefits

Car

81%

38%

18%

9%

7%

63%

0% 20% 40% 60% 80% 100%

Benchmarking Companies All Industries

Source: Mercer China Benefit Survey – 1st tier cities

MERCER

It is all about benchmarking

MERCER

What’s in HR’s mind?

Local Company VS MNCsChina Executive VS Global Executive

Local Employees VS Local Plus

MERCER

0

200

400

600

800

1,000

1,200

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61

Annu

alTo

talC

ash

(Tho

usan

dR

MB

pera

nnum

)

Position Class

Local MNC

Source: Mercer 2014 High tech report

OverallLocal vs. MNC: -42%

Para-ProfessionalLocal vs. MNC: -15%

ProfessionalLocal vs. MNC: -27%

ManagementLocal vs. MNC: -36%

ExecutiveLocal vs. MNC: -42%

RMB

High tech company: Local companies vs MNCAnnual Base Salary

MERCER

0

200

400

600

800

1,000

1,200

40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61

Annu

alTo

talC

ash

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usan

dR

MB

pera

nnum

)

Position Class

Local MNC

Source: Mercer 2014 High tech report

OverallLocal vs. MNC: -34%

Para-ProfessionalLocal vs. MNC: -9%

ProfessionalLocal vs. MNC: -23%

ManagementLocal vs. MNC: -32%

ExecutiveLocal vs. MNC: -37%

RMB

High tech company: Local companies vs MNCAnnual Total Cash

MERCER

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Top Executive Compensation ComparisonHead of Human Resource- Annual Total Cash

P75

P25

MedianAverage

CN HK JP SG US

Source:2013 Mercer Executive Rem survey

Gross Net

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

MERCER

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Top Executive Compensation ComparisonHead of Sales - Annual Total Cash P75

P25

MedianAverage

CN HK JP SG US

Source:2013 Mercer Executive Rem survey

Gross Net

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

MERCER

0 300,000 600,000 900,000 1,200,000 1,500,000 1,800,000 2,100,000 2,400,000 2,700,000 3,000,00049

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

How do we pay the local plus? － OfficeLocal plus vs. local comparison—Annual Base Salary


Prof

Mgm

tEx

ecut

ive

Local PlusLocal

P25 Med P75

Career Stream Local Plus vs. Local

Executive +30%

Management +43%

Professional +69% RMB

MERCER

0 300,000 600,000 900,000 1,200,000 1,500,000 1,800,000 2,100,000 2,400,000 2,700,000 3,000,00049

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

How do we pay the local plus? － OfficeLocal plus vs. local comparison—Annual Total Cash - Actual


Prof

Mgm

tEx

ecut

ive

Career Stream Local Plus vs. Local

Executive +37%

Management +42%

Professional +56% RMB

Local PlusLocal

P25 Med P75

MERCER

Locally hired foreigner benefit

SPOUSE SUPPORT

RETIREMENT

TRANSPORTATION

HOUSING

MEDICAL INSURANCE

TAX SUPPORT

20%

40%60%

80%

0%MOST PREVELENCE BENEFIT :§ Insurance and medical are still

most prevalence benefit for locally

hired foreigners, followed by

housing and relocations.

TOP ISSUE:

§ Managing costs is always the

headache.

§ Localization issue has been

recently raised by many

companies. Most of them still

doing localization case by case

without formal policies.

MERCER

Main Challenges Company Faced With

Rising TotalRewards Cost

Employee Attraction,Retention andEngagement

MERCER

Benefit Award of Year 2014

100%

Healthcare

88%

Car (Top Mgt)

66%

LTI

50%

Housing

27%

Retirement

19%

Flex

Life Science

Life ScienceChemicalChemical

Automobile Hi-Tech

source: Mercer China Benefit Survey – 1st tier cities

MERCER

5%7%

18%30%

33%38%

44%47%

50%

56%61%

68%70%

77%81%81%

89%94%

96%96%

0% 20% 40% 60% 80% 100%

LoanFlexible benefits

Supplementary retirementRetention bonus

Car allowanceSupplementary housing

Flexible working timeTransportation subsidies

Company carMeal subsidies

Education assistanceOvertime meal subsidy

Long service awardOT transportation subsidy

Fully-paid sick leaveLife insurance

Personal accident insuranceSupplementary medical

Mobile subsidiesAnnual leave

Market Prevalence of Supplementary Benefit ItemsAll Industries

CommonBenefits

DifferentiatedBenefits

Must HaveBenefits

source: Mercer China Benefit Survey – All Industries (1st tier cities)

MERCER

Innovative Benefits

24 October 2014

INNOVATIVE BENEFITSLower cost

Higher employee recognition

Enhance employer brand

Differentiate among competitors

……

Compensation Benefits Global Mobility Workforce

MERCER

Innovative Benefits in Internet Industry

24 October 2014

MERCER

Innovative Benefits in Internet IndustryExtended to family members

Dependents

MERCER

Innovative Benefits in Other Industries

Working Time Relaxation

Auto

• Friday Early Home

• Latest New Car Test Drive

• Premium Car for Marriage Use

• Holiday with PhysicalCheck-up

• Bring Your OwnDevices • Premium

Afternoon Tea

• Premium Car Monthly Rental

MERCER

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