GLOBAL TREND REPORT HUMAN RESOURCES 2015 OUTLOOK

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1 GLOBAL TREND REPORT HUMAN RESOURCES OUTLOOK

2 ECONOMIC GROWTH & ORGANISATIONAL CHANGE CREATING NEW OPPORTUNITIES By and large the market for human resources professionals has improved with the economic upturn of the past year. It is also an evolving market place. In most of the seven countries we reviewed at the start of 2015 HR is becoming more specialised, with increased emphasis on professionals who can help organisations through change and restructuring, and those who can help attract and retain top talent. In the Asia-Pacific markets of Mainland China, Hong Kong, Singapore and Japan human resources has moved from a back-room administrative function to be more intimately involved in business operations. In these countries and in France there is strong demand for HR professionals with foreign language (particularly English) skills. If the economic upswing continues, we are likely to see further demand for compensation and benefits experts. Many organisations are outsourcing certain HR functions and implementing HR systems. QUICK LINKS MAINLAND CHINA... 2 FRANCE... 3 HONG KONG...4 IRELAND... 6 JAPAN...8 SINGAPORE UNITED KINGDOM In Mainland China the market has developed rapidly and there is strong demand for HR business partners In France HR generalists are still in demand but we expect to see HR playing a more strategic role with a focus on talent development In Hong Kong overseas experience is highly valued and professionals in L&D, OD and talent management are especially sought after Retaining top talent is becoming a priority for many companies in Ireland so there is growing demand for compensation and benefits experts Japanese companies are adopting best practices in learning and development. There is a lack of suitably experienced bilingual candidates In Singapore the local talent pool has developed, reducing multinational companies need to bring in project leaders from overseas HR generalists are in demand in the UK, as are performance and reward and talent acquisition specialists. Contract professionals are often recruited to manage projects 1

3 On-the job experience counts for more than formal training. MAINLAND CHINA A RAPIDLY MATURING MARKET The HR environment is changing rapidly in China, with more and more companies splitting the function into business partnering, centres of excellence and shared service centres. Consequently ambitious HR professionals are strongly advised to develop a specialisation. At the moment, HR generalists are not hot candidates for multinational companies, nor even for some small and medium sized enterprises, says Marlon Mai, Associate Director, Finance, HR & Strategy at Morgan McKinley China. Over the next year we anticipate that candidates will become more active in seeking new roles. This is also a sign of the times: traditionally, HR candidates have been satisfied with a stable career path within one or two organisations. Today, there is greater incentive to move between roles. In many organisations, HR recruitment budgets have increased, despite the fears of an economic slowdown, often because they need to get to grips with organisational change and there is still strong competition to attract and retain the best talent. Strategic HR planning, learning and career development and recruitment and talent acquisition are strong growth areas, especially at manager level. While most candidates will need a university degree, HND or HNC to move into HR, on-the job experience counts for more than formal training, as HR teams tend to have a rather pragmatic orientation. Candidates with language skills are very much in demand, comments Mai. SALARIES & BENEFITS HR professionals can expect salary increases of on average 8-10% in 2015, or 20-25% if moving to a new role. 2

4 HR is becoming an increasingly important function in leading organisations. FRANCE TALENT ACQUISITION & RETENTION A KEY FOCUS We have seen little change in recruitment into HR positions over the past year in France. There is still a prevailing mood of economic uncertainty and recruitment budgets are static or even declining in many organisations, while some multinational corporations are globalising their HR function. Recruitment and talent acquisition remains a growth area; so too are organisational development and change management. There is ongoing demand for HR generalists and we expect to see demand increase for learning and talent development specialists over the next year. There is certainly adequate local talent supply, while many organisations will recruit internally into senior positions, says Hubert Levesque, Managing Director of Morgan McKinley France. Most demand is for career starters and junior roles, he adds. Candidates with an MA or MSc in Human Resources and fluency in foreign languages will be in the best position to secure a foothold on the career ladder. More experienced candidates need to focus on talent acquisition and development competences, and they will need to get proactive in seeking their next role, for example by networking via informal meetings. Transformation and development skills are really important attributes for anyone seeking a more senior position, as retaining top talent is a priority, says Levesque. HR is becoming an increasingly important function in leading organisations so, while the market is a little quiet at the moment, it will be a focus for Morgan McKinley in 2015 he concludes. SALARIES & BENEFITS Those staying in their current roles can expect a rise of around 5%. Those moving can expect on average a salary increase in the order of 10-15%. 3

5 Candidates who combine overseas training and experience with fluency in Chinese will go far. HONG KONG STRONG DEMAND FOR LEARNING & ORGANISATIONAL DEVELOPMENT SPECIALISTS We ve seen no overall discernible change in the HR recruitment market in Hong Kong. One reason has been the political tension between China and the special administrative region. Businesses view China as a core growth market with lots of potential but are often uncertain about where to allocate resources in the current climate, says Jenny Leung, Associate Director, Morgan McKinley Hong Kong. Organisational change is driving a high level of demand, especially in the areas of learning and talent development, organisational development, talent management and succession planning, at all levels of seniority within HR. But in all of these areas there is a lack of locally based candidates for new positions. On the other hand, process efficiencies and strong talent programmes implemented over the past two years have improved staff retention rates, allowing more organisations to cover new positions through internal movement. Employers value candidates with an overseas qualification, such as CIPD/CIPP and/or relevant HR experience overseas. A candidate who combines these qualities with fluency in Chinese languages will do well, says Leung. The HR discipline continues to develop here and is playing a more strategic role in the business, but we are still some way behind western best practices. There is growing interest in candidates who are qualified in a learning and development methodology such as DDI and Lominger. The contract market for HR professionals is also under-developed in Hong Kong, and in fact we have seen even greater emphasis on permanent headcount in recent months. Contract hiring is generally limited to providing maternity cover and seasonal requirements. Retention, engagement and development strategies will be the hot topics for 2015, concludes Leung. 4

6 SALARIES & BENEFITS Those staying in their current roles can expect a rise of around 5%. Those moving can expect on average a salary increase in the order of 10-15%. 5

7 A sideways move can help HR professionals to get where they would like to be in a few years. IRELAND AN EXCELLENT TIME TO EXPLORE NEW OPPORTUNITIES With Ireland experiencing an economic upswing multinational and Irish companies are currently recruiting specialists in recruitment and talent acquisition, organisational development and change management, as well as learning and talent development. We expect there to be a greater focus on performance and reward, succession planning and analytics as the year progresses. Companies cannot afford to lose talent through lack of engagement, so they are spending more time and resources to improve their understanding of how best to retain employees as well as how to cope should key individuals leave, says Tanya Thomas, National Manager, HR, at Morgan McKinley Ireland. At the same time, virtually all multinational companies are considering the benefits of outsourcing certain elements of the HR function or introducing new shared services. The contract market continues to be buoyant, partly because HR staff profiles tend to be strongly female in Ireland, and partly because the function is very project-oriented. The market will become more fluid in 2015 as HR professionals, particularly at assistant manager level, find there are more options and opportunities for pay increases. These opportunities exist both in new sectors and in specialisations. We have also started to see movement from the public sector, for example the defence forces, to Irish companies. During the recession these moves were unheard of in the HR market. Supply and demand issues are creating this exciting momentum, says Thomas. HR Professionals should also take opportunities in shared services seriously as this sector continues to be in growth mode and skill sets gained in this environment are in demand. While CIPD/CPP is the standard qualification in HR, professionals with an analytical frame of mind would do well to consider training in disciplines such as project and change and in HR software. More and more companies are implementing HR systems from vendors such as SAP, Oracle, Core and PeopleSoft. 6

8 SALARIES & BENEFITS Salaries in HR have started to rise across the board although at a faster rate for specialist than generalist roles. In 2015, for people on the move, we would anticipate pay rises of between 2-5% for generalists and 5-10% for specialists. 7

9 Any movement in the bilingual HR market produces a significant ripple effect. JAPAN ADAPTING TO WESTERN HR BEST PRACTICES The economic outlook has improved gradually in Japan and there are signs that recruitment budgets are increasing as companies look to address organisational change, with a focus on recruitment into learning and development and change management functions. Globalisation is a further key factor driving recruitment, as is the implementation of new IT systems such as SAP LSO and PeopleSoft. Overall companies are recruiting more actively than a year ago, both new and replacement headcount, but offshoring and outsourcing is a counter-trend, comments James Hiluk, Manager, HR at Morgan McKinley s Tokyo office. Moreover, hiring processes can be lengthy, partly because it is often difficult to find the right candidate locally. We have also witnessed a growth in recruitment process outsourcing (RPO), resulting in a shift towards demand for contractors. One reason is that a number of Japanese retailers are planning to open new stores over the next couple of years and have initiated time-delimited recruitment projects. Many of our clients are also seeking to hire staff on initial contracts as a cautionary move before confirming the need for permanent headcount, or the suitability of an individual for a role, says Hiluk. One very important factor in HR recruitment in Japan is the limited size of the bilingual talent pool. Any movement in this market produces a significant ripple effect, says Hiluk. Organisational change is also making a significant impact on the HR recruitment market. Many foreign capital firms are currently going through change management projects. As a result, some staff are looking to move when new senior management come in or new processes are introduced. Employees sometimes find that their new roles do not match expectations or that they don t like the new corporate culture, and start looking for new opportunities, comments Hiluk. The HR market is thus becoming rather more fluid. Hiluk advises candidates who want to move forward to develop their English language skills and their ability to bridge the cultural and organisational divide between Japan and regional and global counterparts. The HR function in Japan is still evolving from a traditional back office administrative function to one that is more embedded as a partnering function within business units. This calls for a new skill-set. The strongest trend that we are seeing is the growing demand for experienced leaders in learning and development who can implement practices that are well established in western companies but new and challenging to Japanese companies (as well as foreign firms that are long-established in Japan and have therefore adapted to traditional Japanese work cultures). Japan s educational system generally does not seem to develop the kind of problem-solving and communications skills that many international firms seek. However, graduates from Japan s leading academic institutions who go on to gain international work or study experience tend to do well, says Hiluk. There are also many respected courses that HR professionals can study locally, such as the Human Resources Management certificate programme at Temple University. 8

10 SALARIES & BENEFITS Those staying in their current roles can expect a rise of around 2-5%. Historically those moving could expect on average a salary increase in the order of 10%, although recent trends indicate less certainty on increases. Whilst salary increases of 10-15% are possible, expectations need to be closely managed on both sides as budgets remain tight and candidates are more frequently choosing career moves for reasons unrelated to salary. 9

11 A once-in-a-lifetime career opportunity might be just around the corner. SINGAPORE ORGANISATIONS MORE INCLINED TO SEEK LOCAL TALENT TO MANAGE BIG PROJECTS In 2014 we witnessed an unexpected surge in the number of multinational companies seeking senior level interim human resources business partners. In the past, such HR project leaders were transferred from their global HQs to work in Asia to perform crucial transformation work within a fixed period, often enjoying generous expatriate packages. The fact that organisations are now more inclined to seek talent from within the region to manage major programmes shows the extent to which skills have developed here, says Iryani Kamal, Senior Consultant, HR at Morgan McKinley Singapore. Nevertheless, we are still not in a position where there is sufficient local talent to meet all demand, she adds. Organisational change is the main driver of that demand, with organisations seeking strategic HR planning, organisational development and change management, and talent acquisition specialists in particular. With the economic outlook generally rather better than a year ago, HR departments have been ramping up on recruitment in recent months, albeit rather cautiously. There is strong demand for effective HR business partners at leadership and assistant manager levels, says Kamal. Performance and reward and learning and development specialists may be in higher demand as we progress through 2015, especially if the economic upturn is sustained. The focus of 2013 and 2014 was on talent acquisition. Therefore, we are more likely to see staff retention becoming a greater issue as top performers consider exploring opportunities elsewhere. So the focus will turn to compensation and benefits and talent management, says Kamal. Some organisations are shrinking their HR teams in Singapore, but if so it is usually because they are outsourcing and offshoring administrative functions. In other cases multinationals have recruitment freezes in place but there is still strong latent demand that may translate into actual demand later in the year. Moreover, the contract market has developed recently to meet the needs of global restructurings and regional transformation projects. In this climate we expect to see HR professionals getting even more proactive in seeking new employers in Singapore is in any case a vibrant and dynamic market. HR professionals are usually open to having exploratory conversations with potential employers, even if they are satisfied in their current role. They are mindful that a once-ina-lifetime career opportunity might be just around the corner. People who are currently midway through their careers and who are looking to achieve director level need to demonstrate consistency and stability. Evidence of effective stakeholder management will make a candidate stand out as business leaders usually seek an HR director who speaks their language, who can be relied on and who will add value to the organisation, Kamal advises. Generally speaking the HR talent pool is, from a technical and point of view, very well qualified. The key problem here is bilingual fluency. More and more companies will only recruit HR professionals who have excellent language skills in English and in an Asian language such as Mandarin or Bahasa, says Kamal. 10

12 SALARIES & BENEFITS HR professionals who stay in their current role can probably expect salary increases in the order of 3-7%. For those being promoted internally this should rise to 9-13%. Those changing companies, but remaining in similar jobs, can expect a modest 8-12% increment. However, if the move involves a significant promotion, they can look forward to a jump of 15-20%, dependent on the overall portfolio and package. 11

13 HR generalists are in greatest demand. UNITED KINGDOM A BUOYANT CONTRACT MARKET In the UK the contract market has continued to be buoyant. Organisational change, such as the review and restructuring of the business model, together with compliance and regulatory changes are driving demand for experienced project professionals as well as generalists who are required to back-fill for internal mobility in staffing projects. HR generalists are in greatest demand. We have also seen companies seeking to recruit performance and reward and talent acquisition specialists, with particularly strong demand for the latter within technology and consultancy, says Jon Carey, Associate Director at Morgan McKinley s London office. With some UK-based organisations consolidating HR functions or offshoring/outsourcing, the permanent market has been much more focused on replacement headcount with a noticeable increase in time-to-hire. Learning and talent development specialists and succession planning experts will be increasingly in demand through 2015 as organisations intensify their efforts to retain talent. In addition to a relevant qualification such as CIPD/CPP, candidates are increasingly expected to bring strong IT skills. SALARIES & BENEFITS Contract: Candidates working in contracts and on an interim basis in a generalist capacity can expect a 2-10% rate increase and those in specialist roles can expect 2-15%. The demand for contractors continues due to the volume of change in organisations. Permanent: HR professionals who remain in their current roles in 2015 can expect an increment of around 5%, whilst those changing jobs can expect 5-10%. Benefits have become a hot topic with all companies required to implement auto-enrolment pensions in 2015; the employer contribution can vary greatly between organisations. 12

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