1. 1 Prepare for the Upturn 逆境自強 迎接挑戰 Employment in HK: Issues and Policy Implications Central Policy Unit Public Seminar Speaker ： Ms Virginia Choi, President, HKIHRM Date: 25 November 2002

2. 2 Agenda What is HKIHRM? What is going on in the market? What does that mean to me? What is the job market environment? - Take aways for employers and employees - Take aways for employers and employees

3. 3 What is HKIHRM? A non-profit and non-government professional organization formed in 1977A non-profit and non-government professional organization formed in 1977 With more than 3,400 membersWith more than 3,400 members (including 320 corporate members)

4. 4 Economic& Employment Environment What is Going on in the Market?

5. 5 Macro Economic Environment 1) Uncertain economic outlook US may experience economic downturn 2) Globalization Shortened business cycle 3) China Continues to enjoy high GDP growth 4) Knowledge economy Human capital is the most important asset HK: Prudent but not pessimistic

6. 6 The Downward Spiral Massive Change Demoralised Workforce Disconnection from Customers Cost Cutting/ Resource Stretching Internal focus Lack of Capacity to Grow More Cost Cutting

7. 7 HK Employment Market 1)Unemployment rate still remains high 2)Manpower mismatch 3)Changing employment pattern 4)Outsourcing 5)Flexible work arrangement

8. 8 What does that Mean to Me?

9. 9 Transformation Requires a Leap Can ’ t transact your way to transformation Must think from the goal back

10. 10 (A) Skill Sets for the Workplace What is the Job Market Environment?

11. 11 Top 5 most Important Training Initiatives to Various Levels of Staff Frontline StaffSupervisorsMiddle ManagementSenior Managers 1 English Language Comprehension Supervisory Management Effective Problem Solving Skills Strategic Planning 2 General Computer Skills Effective Problem Solving Skills Presentation SkillsChange Management 3 Basic Interpersonal Skills for Associates English Language Comprehension General Management Skills Risk / Crisis Management 4 Putonghua Comprehension Basic Interpersonal Skills for Associates Resolving conflict / negotiation skills Organization Development 5 Effective Problem Solving Skills Managing PriorityProject Management Resolving conflict / negotiation skills Source: Training Needs Analysis Survey 2002, IHRM

12. 12 Personal Quality being Measured in Appraisals Source: IHRM Incentive Policy and Performance Management Survey 2002

13. 13 Take Aways: 1)For employees: Invest in themselvesInvest in themselves - New workplace skills are needed, e.g. Conflict-resolving / negotiation skills Managing priority Language skills: English and Putonghua - Personal quality being measured Core competency, future potential 2)For employers: Invest in their people Talent management

14. 14 (B) Change of Employment Mode What is the Job Market Environment?

15. 15 Manpower Planning 1.Proportion of flexi workforce to total workforce increases: -2001: 9.1%  2002: 11.9% 2.Proportion of companies with outsourced positions increases: -2001: 22.6%  2002: 24.2% Source: IHRM Manpower Planning Survey 2002

16. 16 Take Aways: 1)For Employees: Try to understand the global trends of outsourcing and flexi work arrangement Ensure your own employability Keep an open and flexible mind-set to the changing working environment 2)For Employers: Need professional management on flexi workforce - e.g. how to motivate, how to provide effective training and how to reward Manage outsourcing projects professionally - - may lose control and risk fluctuating standards Communicate with affected staff

17. 17 (C) Change of Compensation & Benefit Package What is the Job Market Environment?

18. 18 Pay Freeze is the Trend 1.First negative pay adjustment recorded in 2002 since 1984 2.Overall weighted average adjustment in 2002 -2001: 2.6%  2002: - 0.1% -63.5% of responded companies opted for pay freeze 3.2003 predicted adjustment -82% predicted pay freeze Source: IHRM Pay Trend Survey 2002

19. 19 The Use of Flexible Incentive Package Non-guaranteed bonus payment -89% surveyed companies provided a non-guaranteed bonus scheme to some or all of their employees (vs. 84% in 2001) -Among those employees eligible to be awarded a bonus, only 52% were actually awarded a bonus (vs. 88.7% in 2001) Source: IHRM Pay Trend Survey 2002

20. 20 Take Aways: 1) For Employees: -Incentives will only be awarded to high performers -Work together with employers to enhance the competitiveness of companies 2) For Employers: -C&B directly related to business profitability -A properly designed non-guaranteed scheme to motivate staff performance and to flexi payroll costs -Open communication, the right corporate culture & effective C&B strategy are key to enable changes with least pain but more understanding

21. 21 The Upward Spiral

22. 22 Well-Equip yourself, Be a Winner in the Future!

23. 23 URL: http://www.hkihrm.org Informative Website END