Thursday, September 29, 2005
[IWS] Mercer: 2005 China Corporate Benchmark Monitor (CBM) [19 September 2005]
IWS Documented News Service
_______________________________
Institute for Workplace Studies Professor Samuel B. Bacharach
School of Industrial & Labor Relations Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor Stuart Basefsky
New York, NY 10016 Director, IWS News Bureau
________________________________________________________________________
Mercer
2005 China Corporate Benchmark Monitor (CBM)
China
Beijing, 19 September 2005
http://www.mercerhr.com/pressrelease/details.jhtml/dynamic/idContent/1194985
As human resource (HR) is increasingly becoming strategic business partners, it is important for HR professionals to rely on hard, quantifiable evidence to not only justify human capital investment but also seek to optimize the returns of various human capital investments.
According to a newly-released study on the effectiveness of HR function by Mercer Human Resource Consulting 2005 China Corporate Benchmark Monitor, higher performing companies are investing more in human capital programs and HR functions than lower performing companies.
The study finds that the median human capital costs per employee for high performing companies defined as the top one third of companies with profit margin higher than 14% is RMB 138,956 a year, more than twice as much as RMB 58,790 a year for low performing companies defined as the bottom third companies with profit margin below 8%. Also, the HR staff ratio for the high performing companies is 1.4%, higher than the 1.2% of the low performing ones.
The new 2005 study was conducted to examine HR performance and HRs impact on business outcomes among organizations in China for the period from January 1, 2004 to December 31, 2004. It is based on a survey of 101 companies in China spanning a variety of industries such as Hi-Tech, Pharmaceutical, Automobile, Chemicals, Consumer Goods, and Other Manufacturing (mainly Multinationals China Operations).
The data presented in the CBM provides a detailed snapshot of where participating organizations in China are positioned with regard to 45 key indicators of corporate performance in labor cost ratios, HR budgets, staffing ratios, recruitment, training, and employee turnover. CBM was launched in China from 2002 and has been conducted once a year since then.
The CBM is a diagnostic tool that enables organizations to:
* Identify areas covered by the survey where the performance of your organization is significantly different from that of relevant comparator organizations in China and outside China, and
* Monitor performance, on an ongoing basis, in those areas that have already been identified as worthy of present and future attention.
Staffing ratios
Staffing ratios remained relatively stable, compared to 2004 results. It is noticeable that sales staff as a percentage of total staff rose from 19.2% in 2004 to 22.1% in 2005. It has been observed that companies hire more sales to explore or develop market.
In companies with over 1,000 employees, the HR staff ratio the HR staff as a proportion of all employees is 1.11% at the median, suggesting that one HR staff can support 90 non-HR staff. However, in companies with under 200 employees, the ratio is 2.39%, suggesting that one HR staff can only support 40 non-HR staff.
This difference implies that large companies, measured in terms of workforce size, tend to have scale-of-economy advantages over small companies in providing HR services. This evidence is also supported by the finding that HR expenses measured by HR budget per employee at median are lower in large companies RMB3,772 was budgeted for each employee than in small companies where each employee had a HR budget of RMB 5,890.
The supporting staff ratio was also observed to decrease with an increase in company size by workforce. The average supporting staff as a percentage of total staff (including finance, HR, IT and administration staff) is 9.5%.
Training
The average of training expenditure for all industries stands at RMB 3,205 a year and an average of 33 training hours per year for each employee. It has also been observed that turnover and training expenditure has a negative correlation.
Staff turnover
The average overall voluntary staff turnover increased from 10.0% last year to 13.2% this year, reflecting most likely a tightening of the labor market conditions. Consumer and pharmaceutical companies experienced higher voluntary turnover among employees than other companies. Consumer goods companies have an average voluntary turnover rate of 19.01% while the pharmaceutical ones have an average turnover rate of 17.46%.
About the study
A customized CBM report was sent to each and every one of the participants on July 15, 2005. If you are interested, a soft copy of the 67-page generic study report can be obtained at a cost for non-participants by contacting Ms. Laurel Qin at 10-6505-9355 ext 15.
_____________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky *
Director, IWS News Bureau *
Institute for Workplace Studies *
Cornell/ILR School *
16 E. 34th Street, 4th Floor *
New York, NY 10016 *
*
Telephone: (607) 255-2703 *
Fax: (607) 255-9641 *
E-mail: smb6@cornell.edu *
****************************************
_______________________________
Institute for Workplace Studies
School of Industrial & Labor Relations
Cornell University
16 East 34th Street, 4th floor
New York, NY 10016
________________________________________________________________________
Mercer
2005 China Corporate Benchmark Monitor (CBM)
China
Beijing, 19 September 2005
http://www.mercerhr.com/pressrelease/details.jhtml/dynamic/idContent/1194985
As human resource (HR) is increasingly becoming strategic business partners, it is important for HR professionals to rely on hard, quantifiable evidence to not only justify human capital investment but also seek to optimize the returns of various human capital investments.
According to a newly-released study on the effectiveness of HR function by Mercer Human Resource Consulting 2005 China Corporate Benchmark Monitor, higher performing companies are investing more in human capital programs and HR functions than lower performing companies.
The study finds that the median human capital costs per employee for high performing companies defined as the top one third of companies with profit margin higher than 14% is RMB 138,956 a year, more than twice as much as RMB 58,790 a year for low performing companies defined as the bottom third companies with profit margin below 8%. Also, the HR staff ratio for the high performing companies is 1.4%, higher than the 1.2% of the low performing ones.
The new 2005 study was conducted to examine HR performance and HRs impact on business outcomes among organizations in China for the period from January 1, 2004 to December 31, 2004. It is based on a survey of 101 companies in China spanning a variety of industries such as Hi-Tech, Pharmaceutical, Automobile, Chemicals, Consumer Goods, and Other Manufacturing (mainly Multinationals China Operations).
The data presented in the CBM provides a detailed snapshot of where participating organizations in China are positioned with regard to 45 key indicators of corporate performance in labor cost ratios, HR budgets, staffing ratios, recruitment, training, and employee turnover. CBM was launched in China from 2002 and has been conducted once a year since then.
The CBM is a diagnostic tool that enables organizations to:
* Identify areas covered by the survey where the performance of your organization is significantly different from that of relevant comparator organizations in China and outside China, and
* Monitor performance, on an ongoing basis, in those areas that have already been identified as worthy of present and future attention.
Staffing ratios
Staffing ratios remained relatively stable, compared to 2004 results. It is noticeable that sales staff as a percentage of total staff rose from 19.2% in 2004 to 22.1% in 2005. It has been observed that companies hire more sales to explore or develop market.
In companies with over 1,000 employees, the HR staff ratio the HR staff as a proportion of all employees is 1.11% at the median, suggesting that one HR staff can support 90 non-HR staff. However, in companies with under 200 employees, the ratio is 2.39%, suggesting that one HR staff can only support 40 non-HR staff.
This difference implies that large companies, measured in terms of workforce size, tend to have scale-of-economy advantages over small companies in providing HR services. This evidence is also supported by the finding that HR expenses measured by HR budget per employee at median are lower in large companies RMB3,772 was budgeted for each employee than in small companies where each employee had a HR budget of RMB 5,890.
The supporting staff ratio was also observed to decrease with an increase in company size by workforce. The average supporting staff as a percentage of total staff (including finance, HR, IT and administration staff) is 9.5%.
Training
The average of training expenditure for all industries stands at RMB 3,205 a year and an average of 33 training hours per year for each employee. It has also been observed that turnover and training expenditure has a negative correlation.
Staff turnover
The average overall voluntary staff turnover increased from 10.0% last year to 13.2% this year, reflecting most likely a tightening of the labor market conditions. Consumer and pharmaceutical companies experienced higher voluntary turnover among employees than other companies. Consumer goods companies have an average voluntary turnover rate of 19.01% while the pharmaceutical ones have an average turnover rate of 17.46%.
About the study
A customized CBM report was sent to each and every one of the participants on July 15, 2005. If you are interested, a soft copy of the 67-page generic study report can be obtained at a cost for non-participants by contacting Ms. Laurel Qin at 10-6505-9355 ext 15.
_____________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 9:52 AM
