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EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America
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EY Human Capital Conference 2012: Strategic growth markets - Brazil and South America

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► Latin America/South America (SASA) projection …

► Latin America/South America (SASA) projection
► Brazil and the immigration scenario
► SASA’s global mobility issues

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  • 1. 2012 Human Capital Conference23–26 October Strategic growth markets: SASA Human Capital developments and specificities for the South America Sub Area Sub-Area
  • 2. Circular 230 disclaimer► Any US tax advice contained herein was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.Page 2 Human Capital on SASA
  • 3. Disclaimer► Ernst & Young refers to the global organization of member firms of Ernst Y E t & Young Global Li it d each of which i a separate l Gl b l Limited, h f hi h is t legal entity. l tit Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited located in the US.► This Thi presentation i ©2012 E t & Y t ti is Ernst Young LLP All rights reserved. N LLP. i ht d No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, photocopying transmission recording rekeying or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Any reproduction, transmission or d st but o o t s o o a y o t e ate a e e s p o b ted and s distribution of this form or any of the material herein is prohibited a d is in violation of US and international law. Ernst & Young LLP expressly disclaims any liability in connection with use of this presentation or its contents by any third party.► The views expressed by panelists in this session are not necessarily those of Ernst & Young LLP.Page 3 Human Capital on SASA
  • 4. Presenter► Carlos Henrique Martins Tonnus q ► Ernst & Young Terco ► carlos.martins@br.ey.comPage 4 Human Capital on SASA
  • 5. Agenda► Latin America/South America (SASA) projection► Brazil and the immigration scenario► SASA’s global mobility issuesPage 5 Human Capital on SASA
  • 6. SASA projection
  • 7. SASA: key countriesInvestments in Latin America:► In 2011, Latin America and the Caribbean received a 2011 record volume of US$153.4 billion in foreign direct investment, which represents 10% of those global flows. US$153.4 billion US$137 billion US$120.9 billion 2008 2010 2011 Source: http://www.brasil.gov.brPage 7 Human Capital on SASA
  • 8. SASA: key countriesTop four foreign investment receiver countries:► Brazil — US$66 7 billion US$66.7 For 2012 the Investments in I i entries of direct► Mexico — US$19.4 billion Brazil investments in represents,► Chile — US$17 3 billion US$17.3 the region may g 43.8% f the 43 8% of th y vary between► Colombia — US$13.2 billion total flow to the 2% and 8% in region respect of 2011. p Source: http://www.brasil.gov.brPage 8 Human Capital on SASA
  • 9. SASA: key countries Rank in world Country GDP (2011)South America s GDP has America’s 8 Brazil $2,102,018 $2 102 018 millionbeen in the spotlight in the 21 Argentina $694,690 millioninternational scenario. 26 Columbia $484,960 million 34 Venezuela $369,324 million 41 Peru $300,114 million 44 Chile $281,368 million 62 Ecuador $125,066 million $ 88 Uruguay $52,111 million 89 Bolivia $51,478 million 100 Paraguay $36,235 million 152 Guyana $5,842 million 154 Suriname $5,069 million Source: CIA World FactbookPage 9 Human Capital on SASA
  • 10. SASA: key countriesPresent and future of South America:► Chile has an estimated GDP growth of 4.5% for 2012.► Peru has an estimated GDP growth of 5% in 2012 2012.► There are good economic perspectives for 2013.► Brazil announced in August a US$66 billion stimulus plan to complement investments for World Cup and Olympic Games.► Resilience before European international crises. Source: CIA World FactbookPage 10 Human Capital on SASA
  • 11. Brazil and the immigration scenario
  • 12. Business reactions: what we have seen as atrend pattern► Investment on education: ► External recruiting: ► Corporate universities ► Top management ► Post-graduation ► Regular job positions ► Research centers ► Technicians► Attractiveness and retention: ► Compensation strategies Approximately 33,000 A number 19% higher ► Benefits and flexibility work visas were granted when compared with the first p ► Retirees in the first semester two quarters of 2011. of 2012.Page 12 Human Capital on SASA
  • 13. Immigration scenario: inbound/outboundflows hit records year after year Other 80,000 80 000 18% 70,524 North 70,000 66,690 America 60,000 56,006 35% 53,441 Asia/ 50,000 Oceania 40,460 42,914 18% 40,000 32,913 29,065 Europe 30,000 29% 20,000 10,000 Top five countries 2009 2010 2011 2012* 2,565 3,834 3,848 2,454 United States 559 755 10,049 10 049 4,646 4 646 0 Haiti 6 15 720 2,302 2009 2010 2011 2012* Philippines 4,969 6,531 7,784 2,302 United Kingdom 3,496 3,809 4,817 2,083 Permanent visas Temporary visas Total Germany 1,454 2,904 3,142 1,695 * First two quarters of 2012Page 13 Human Capital on SASA
  • 14. Improving unemployment rates and risingGDP per capita Source: IHS Global Insight 14.0 ► The unemployment rate in Brazil has 12.0 been decreasing. The average for 2011 g g 10.0 is 6.18%. Such a path is sustainable 8.0 once it is associated with investments 6.0 spread throughout the country and in% 4.0 40 sectors such as energy, oil, agribusiness gy, , g and manufacturing. 2.0 ► In addition, real GDP per capita is also 0.0 increasing. -2.0 ► Both factors indicate that social conditions in the country are improving, and as a result, the country has rising Real GDP per capita (% yoy) Unemployment rates domestic demand and consumption. Nasdaq Crisis Financial 2010 2011 Unemployment rates in Brazil 2000–2002 11.7% Crisis 08–09 8% 6.7% 6.18% have been decreasingPage 14 Human Capital on SASA
  • 15. Internal marketplace: manpower shortage inthe oil and gas industry Engineering bachelor’s — number Local supply ability versus domestic of new graduates per year demand Source: Poli - USP Source: IG Estagio e Trainee Brazil 32,000 , Current scenario Ideal scenario South  80,000 Korea Russia 100,000 32,000 Gap India I di 250,000 60,000 60 000 China 20,000 40,000 60,000 400,000Page 15 Human Capital on SASA
  • 16. SASA’s global mobility issues
  • 17. SASA’s global mobility issues► Regarding last y g g year: ► Legislative complexity: reaction, focus on compliance ► Aggravating: head count shortage and unplanned inheritance ► Result: inefficiencies, high costs, frustration► Strategy versus execution: ► Lack of visibility about productive career ► Inefficient policies and processes ► Reactivity► Challenge: global growth platform: ► Methodology, communication, risk management ► What makes great companies great? (peer to peer)? ► Return: consistency, continuity, flexibilityPage 17 Human Capital on SASA
  • 18. Timeline: issues that impact the expatriationprograms MERCOSUL Ibero- Americano Competitiveness Agreement* Transit market Argentina Argentina Bolivia Chile Chil Stakeholders Ecuador Portugal Cape Verde Espain Germany* El Salvador Japan Fiscalizations Paraguay Spain Paraguay Portugal Uruguay Uruguay Belgium* Luxemburg Italy Grece Chile Venezuela Quebec 1943 1965 1969 1970 1979 1982 1984 1990 1991 1993 1997 2000 2002 2005 2007 2009 2010 2011 2012 Law 4,749 13th Law 8,036 IN 208 Tax RN 74 IN 84 IN 1,216 salary FGTS residency Work FGTS DIRF authorizationDecree law Law 7,064 Law 8,212 Law 10,1015,452 — CLT Reallocation of Social security Profit sharing engineers Letter L tt Law 11 962 11,962 New law 3,280 Labor contract RMCCI Law 11,638 * In process of ratificationPage 18 Human Capital on SASA
  • 19. Recommendations to the market: generalrule is expatriate has no owner Risks Low Medium High HR Tributary/ legal High Mediu um Controls/ finances Low L ► Inherited responsibility $ ► Underestimated responsibility ► ReactivityLow Operational complexity p p y HighPage 19 Human Capital on SASA
  • 20. Recommendations to the market: HRresponsibilities Risks Low High Stocks Medium Law 11,962 , remuneration High RH Policies Mediu FGTS Chargeback Low L um ► Inefficiencies ► Costs $ ► Personal motivationsLow Operational complexity p p y HighPage 20 Human Capital on SASA
  • 21. Recommendations to the market: mappingand work on synergies Risks Low Medium High L 11,962 , Stocks remuneration RH Tributary /legal High Policies Companies are failing on execution! Mediu FGTS Chargeback um A Controls/ finances Low L ► Compliance $ ► Estrategy ► Governance and reputationLow Operational complexity p p y HighPage 21 Human Capital on SASA
  • 22. It is not just a problem of small companies Automaker► 18 special projects Oil and ► Brazilian and foreigners, greatest ones gas ► Southeast, South and Mid-west Energy ► Foreigners in Brazil and Brazilians abroad Industry* Banks► Attention points Construction *(General industries/factories of benefit and production) 28% 25% Unknown 100% ramifications 14% 14% 11% Pointed problems in execution, Law 11,962 7% communication and controls Benefits Treaties 4% IN 99 Visas FGTS PS V B T L F IPage 22 Human Capital on SASA
  • 23. Why does problems happen?► Policies/processes p ► Outdating Overload ► Lack of flexibility ► Reactive culture Inefficiencies► People ► Head count ► Continuity Frustrations ► Low innovation► Strategy versus execution ► Focus on potentiality, lack of attention to the execution challenges ► Neglected operational aspects Motivation and perception of value ► Lack of visibility of the “production chain”Page 23 Human Capital on SASA
  • 24. A situational exercise: indicators of whatmakes a great company great► Global American Company, Fortune 500 10 30 0 FTE/Expatriate 90 Preparation time (days, 0 120 expatriate) 2.5 Short-term cost 0 6 (comparison with local, in x) 3.5 Long-term cost 0 6 (local comparison) 80 0 100 Training/hour/year 9 0 10 Specific p p policies >2 0 100 Percentage of layoffs (%) >80 Acceptance of new 0 100 expatriationsPage 24 Human Capital on SASA
  • 25. Conclusion► Growth perspectives for 2013► Effective systems for information exchange► Better communication between the different authorities (fiscal, l b pension and F d l P li ) (fi l labor, i d Federal Police)► Legislation complexity growth► Tendency of authorities to recognize applicability of T d f th iti t i li bilit f international treatiesPage 25 Human Capital on SASA
  • 26. Conclusion Where to improve? ► Policy revision ► Constant review of internal procedures ► Improvement of market p p practices ► Investment in skilled manpower ► Constant legislation updatePage 26 Human Capital on SASA
  • 27. QuestionsPage 27 Human Capital on SASA

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