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Unlock your HR talent in this revolutionary blend of HR Strategy and Creativity! L’Oréal - 2010 Summary 1. Overall country data 1.1. General, historical and geographical data 1.2. Demographic and sociological data 1.3. Economic data 2. L’Oréal country data 2.1. Business data 2.2. HR data 3. L’Oréal corporate data 3.1. Corporate HR data 3.2. Other data Kiev, a city between tradition and modernity… 2 1. Overall country data 3 1.1. General, historical and geographical data UKRAINE Country name: Ukraine Surface area: 603 700 km² Population: 46.7 million inhabitants (Ukrainians : 73 % ; Russians : 22 % ; Other - Bielorussians, Moldavians, Crimeans etc. : 5 %) Capital: Kiev (2.6 million inhabitants) Main universities: Kiev (2.6 million inhabitants), Dnipropetrovsk, (1.2 M. inhab.), Odessa (1 M. inhab.), Donetsk (1 M. inhab.), Lviv (800 000 inhab.) Official language: Ukrainian (Russian remains much used in the East and South, and is also the official language of Crimea) Currency: The hryvna (1 UAH = 0.144 € ou 1 € = 6.69 UAH exchange rate as of July 1 2007) National holiday: August 24, Independance Day declared in 1991. 4 1.1. General, historical and geographical data Ukraine is located in Eastern Europe and is the second largest country in Europe after Russia. Ukraine is bordered on the north by Russia and Belarus; on the east by Russia on the west by Hungary, Slovakia and Poland; on the southwest by Romania and Moldova; and on the south by the Black Sea and the Sea of Azov. Ukraine declared its independence in 1991 after the fall of the Soviet Union and with this event came the need for structural economic reforms. The transitional period of the 1990s saw changes implemented, but only partially, and the government gave limited incentives for private sector developments. As a result of this, GDP in 1999 had dropped to 40% of the level in 1990, and poverty was on the increase. In addition, Ukraine experienced hyperinflation in 1993, due to the fact that prices in 1991 had severely lowered to overcome the problem of product shortages. It is thanks to that period that the country holds the world record for inflation in the space of a calendar In 1986, after the nuclear disaster at Chernobyl, 200,000 people had to be evacuated and all agriculture came to a halt. The environment is gradually recovering, however the most seriously affected area is still uninhabitable. 5 1.2. Demographic and sociological data Demographic growth (2007): - 0.651 % Life expectancy (2007): average is 68.06 years (74.2 years for women, 62.2 years for men) Rate of literacy : 99.6 % (Ukraine has a high standard of education) Religions : Orthodox : around 40 million ; Catholics : around 5 million ; Protestants : around 400.000 ; Jews : between 150.000 and 200.000. Human development index in 2006: 0.774 (77th. / 177 World ranking) Ukrainian age structure 16% 0 – 14 years 14% 65 years and over 15 - 64 years 70% 6 1.2. Demographic and sociological data Ukrainians are generally described as welcoming, happy, and outgoing people who are very proud of their country and culture. However, the habits and attitudes of individuals within one culture differ and you will find a wide range of behavior and attitudes in Ukraine; some will be compatible with your own while others may strike you as incomprehensible. Some people touch each other quite a bit during conversations if they are standing. On the gesticulation scale Ukrainians are more subdued than southern Europeans but more animated than Scandinavians. Gestures tend to be smaller and discreet. Also, smiling is usually reserved for friends. Gender roles in Ukraine tend to be more traditional than in the west. Nevertheless, today many people do not fit these stereotypes, especially among younger generations. There are many challenges to doing business in Ukraine such as the endless bureaucracy and high level of superstition that still remain. Office hours are generally Monday to Friday 9am to 6pm, although government offices usually finish earlier on Fridays. 7 1.3. Economic data GDP (Gross Domestic Product - 2008) : 140.5 billion US dollars (81.7 in 2005, 42.4 in 2002) Growth rate : 7.3 % in 2007 (7.1 % in 2006 ; 2.6 % in 2005 ; 12 % in 2004 ; 9.4 % in 2003 ; 5.2 % in 2002) Unemployment rate : (2007) : officially 2.3 % of the active population (more than 7 % according to the International Labour Organisation) Inflation rate : (2007) : 12.8 % (11.2 % in 2006, 12.3 % in 2004 ; 8.2 % in 2003 ; - 0.6 % in 2002) Balance of trade : (excluding services) : + 3.4 billion US dollars in 2004 ; 0.6 in 2003 ; 1 in 2002 Major investors : Total investment : 18 384 MUSD as at 1st July 2007 : Germany with 5 503 MUSD (29.9 % of total) Cyprus with 2 043 MUSD (11.9 %) Austria with 1 506.3 MUSD (8.2 %) UK with 1 435 MUSD (7.8 %) USA with 1 322 MUSD (7.2 %) Holland with 1 178 MUSD (6.4 %) Russia with 907 MUSD (4.6%) France ranks 9th with 448.8 MUSD (2.8 %). 8 1.3. Economic data Economic growth Inflation rate 2002 9 1.3. Economic data Euro Exchange rate (Basis 100 January 2006) 10 1.3. Economic data Foreign investment GNP per capita (Gross National Product per capita) : 3 000 US $ 1999 2007 11 1.3. Economic data Illustration of the cost of living in Ukraine 30-40 UAH 25-50 UAH 22.95 UAH Local average salary : 2083 UAH per month 12 2. L’Oréal country data 13 2.1. Business data Consumer profile 67% urban population 60% with university degree 39 years (average age) 250 Euro average income per month (growing towards European level) Mall in the Kiev area 14 2.1. Business data Cosmetic spendings (per capita, per year, Euro) 263€ 84€ 31€ Ukraine Poland France 15 2.1. Business data Exemple of a brand development : Maybelline +45% +170% 1.2 0.9 Market shares 0.3 2005 2006 2007 16 2.1. Business data Competition Door-to-door competitors : AVON, ORIFLAME, MARY KAY, FABERLIC « Traditional » competitors : P&G, UNILEVER, SCHWARZKOPF, BEIERSDORF, LVMH… Others Beiersdorf Schwartzkopf Procter&Gamble L’Oréal 2005 2007 17 2.1. Business data History of the L’Oréal Ukraine subsidiary ACD PPD CPD Creation of L’Oréal Ukraine Active Cosmetics Division Professional Products Division Consumer Products Division Representation Office 18 2.2. HR data Country organisation (1) Country Manager (Belgian) (2) CPD GM (3) (German) PPD GM (Canadian) ACD GM (Russian) Financial Director (Russian) Operations Director (French) HR Director (4) Supplementary data : • (1) All executive Directors are expatriates who are paid in the local currency. • (2) Up till now the country CEO has worked without an HR team. • (3) GM : General Manager • (4) This job did not exist in the organisation before your arrival. 19 2.2. HR data Human Resources Director Secretary Human Resources Manager (1) (2) Receptionist (3) Receptionist (4) (1) Originally your HR Manager was supposed to become the HRD. Finally, it was decided to recruit an HRD coming from an outside country. (2) 2 receptionists are sharing the HR team’s office but are not part of the HR structure. (3) 22 year old woman, University graduate who has lived in France and speaks both French and English fluently. (4) 27 year old woman, who only speaks Ukrainian. 20 2.2. HR data Headcount per seniority Headcount per division Average age Average Group experience Sales 28 2 Marketing 27 2 2006 2007 CPD 34 42 PPD 28 35 ACD 0 23 Management Comitee 37 11 Operations 14 23 Finance 28 2 Finance 9 19 Total 29 3 Total 85 142 21 2.2. HR data Headcount per job Headcount per division Women Men Sales 45% 55% Marketing Merchandising 90% 10% General 20% 80% Secreterial 100% 0% Finance 75% 25% Total 70% 30% 2007 Sales 60 Marketing 40 Operations 23 Finance 19 Total 142 22 2.2. HR data Staff turnover Analysis • With an average of 8%, L’Oréal Ukraine turnover is below the country average rate of 12 %. • The subsidiary turnover rate remains stable vs a market rate which progresses by +4% / year • High staff turnover in Marketing and Operations jobs (difficult to keep the best talents) Languages Analysis • Headquarter staff master English well. • Very few of the sales force speak English. Kiev, a cosmopolitan city 23 3. L’Oréal Corporate data 24 3.1. Corporate HR data Competencies required at L’Oréal 25 3.1. Corporate HR data L’Oréal IT Tools L’Oréal HR teams in other countries use customised tools which have not been implemented in L’Oréal Ukraine. CAROL “Careers online” references the CV of every member of staff worldwide. POOL “Potential online” is used by recruiters to centralise, manage and follow-up online applications for jobs and internships. UNITY is an online tool for managing training plans. 26 3.1. Corporate HR data Business Games A complete international business games portfolio to promote L’Oréal and attract talents. General Business Game Marketing Game R&D Game Industry Game E-strat Brandstorm Innovation Lab Ingenius Started 2000 Started 1993 Started 2007 Started 2001 126 Countries 38 Countries 15 recr. 2007 11 Countries Since 2000 : 283 recr. 131 recr. 2006/7 18 recr. 2006/7 27 3.1. Corporate HR data L’Oréal’s Code of Business Ethics This Code of Business Ethics has to be given to every newcomer in the company. It’s your job to ensure that this is done 28 3.1. Corporate HR data L’Oréal FIT (Follow-up and Integration Track) L’Oréal FIT is our integration program for newcomers. It provides 2 years of personalized guidance and training to promote successful integration for those new to L’Oréal. The L’Oréal FIT program provides 6 complementary learning opportunities to help newcomers understand the L’Oréal culture and our business. There are 5 key players 29 3.1. Corporate HR data Training At L’Oréal, the training offer is sorted into three fields : Vision & Culture FIELDS Management and Personal Development Professional Expertise L’Oréal has implemented 4 management levels known as Steps, each step corresponds to a specific level of management experience and expertise. Must Haves are training programs that each employee follows when taking on a new role. They help employees acquire the fundamental expertise needed for their new job. STEPS Identity for everything that concerns Training at L’Oréal MUST HAVE 30 3.1. Corporate HR data MAP MAP (Managing and Appraising Performance) is L’Oréal’s new worldwide appraisal system. It is not rolled out in Ukraine yet and one of your missions is to implement Map Map aims to appraise and develop the competencies and performance of all staff. It is based on • Clear annual objectives • Evaluation based on 4 criteria • Mastery of mission and key job accountabilities (KJA defined in job guidelines) 1. Achievement of Individual business objectives 2. Achievement of Human leadership objectives (if team leader) • Competencies (General and Professional / Technical) It links compensation decisions to performance appraisal It offers 2 annual reviews, the Year-end review (YER) and the Mid-year review (MYR) to further the ongoing dialogue between employee & managers which is key to improving performance It is totally integrated into the overall L'Oréal Human Resources strategy 31 3.2. Other data Head hunters and recruitment agencies The price of a recruitment is about 25% of the first annual salary whether recruited by agencies or headhunters. Billing : • Headhunters require a third of the fees upon signature of an agreement between L’Oréal and the headhunter. Another third upon delivery of a list of potential candidates. Final third upon recruitment of the chosen candidate. • Recruitment agencies require the integrality of the fees upon recruitment of the chosen candidate. It should be noted that the headhunter works exclusively for you and has access to potential candidates who may not be actively looking for a job change. On the other hand, recruitment agencies have an extensive file of potential candidates but they are not exclusively working for you and may be working simultaneously for your competitors. 32 3.2. Other data Remuneration studies L’Oréal works with an international consulting company to assist the Group in analysing the effectiveness of their Human Resources programs and policies. This consultant is offering L’Oréal Ukraine its expertise in the fields of compensation and employee benefits. If you require their expert opinion on the salary levels of your staff compared to similar jobs in other companies in the Ukraine, this will cost you 2 000 euros per job studied. 33 3.2. Other data Labour law and health insurance in Ukraine Labour issues in Ukraine are governed primarily by the Labour Code of Ukraine (“Labour Code”). The Labour Code, being based on the old Soviet labour code, is slanted heavily in favour of workers’ rights and protections. In the context of termination of employment, the Labour Code permits termination only in specific and limited circumstances (persistent non-performance, absence from work, drunkeness…). An employee may be hired for an initial trial or probationary period that generally should not exceed three months. The standard probationary period is one month for “labourers,” three months for other employees. During this trial period, employment can be terminated without prior notice if the employee proves unfit for the job. Under Ukrainian currency regulations, salary payments made by employers to Ukrainian residents are permitted only in local currency, the Ukrainian Hryvnia. In practice, salaries are often indexed against a foreign currency to protect against the risk of currency devaluation. By law, a salary should be paid twice per month with the period between payments not exceeding 16 calendar days. The Labour Code currently recognizes 10 national (paid) holidays. In addition to national holidays, employees are entitled to at least 24 calendar days of paid vacation each year. Employees are also entitled to paid sick leave; however an employer may terminate an employee’s contract if he or she takes more than four consecutive months’ sick leave. Source : Volodymyr Monastyrskyy, Partner, Employment/Corporate/Real Estate Salans, Kiev. 34 3.2. Other data Great company to work in Great company to L’Oréal wants to be one of the best companies to work in. You need to keep this in mind when you take on your job. work in 35 3.2. Other data Catering facilities The headquarters at Kiev does not have a staff canteen. However, staff can use fridges and microwaves situated in a common area. 36 MERCI THANK YOU ДЯКУЮ СПАСИБО 37