Labor Markets in High Growth Economies
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This is a presentation on labor markets and compensation and benefits information for twenty of the fastest growing countries in the world (as measured by GDP growth). Data is provided from Birches Group compensation and benefits surveys. The presentation was originally presented by Warren Heaps, Partner, Birches Group LLC, at the Emerging Markets HR Summit in London, April, 2014.
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Labor Markets in High Growth Economies
- 1. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com A GLIMPSE AT LABOR MARKETS IN SELECTED HIGH-GROWTH AND DEVELOPING COUNTRIES Warren Heaps, Partner Birches Group LLC Emerging Markets HR Summit London, 3-4 April, 2014
- 2. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • Specialized HR consultancy headquartered in New York, with offices in Manila, Philippines; Umeå, Sweden; and Riga, Latvia • We conduct salary and benefits surveys in 148 countries globally • Global Partners with Aon Hewitt; together we have data for 180 countries worldwide • Clients include multi-national corporations, regional and local companies, international organizations and NGOs About Birches Group
- 3. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • Why “high-growth and developing” countries? • What makes these markets different? • Glimpse of labor market data – Compensation levels – Pay “mix” – Typical allowances and benefits • Wrap-up Agenda
- 4. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Developing Countries Are Where the Action is! Source: World Bank Group
- 5. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • In a recently published book entitled “The Bright Continent,” author Dayo Olopade pointed out the following facts about Africa: – Six of the ten fastest growing countries in the world are in Sub- Saharan Africa – 23 countries in Africa (43%) are now middle income – Africa has an emerging middle class of 300 million people – 70% of Africa’s population is under 30 – Africa has 50 cities with more than 1MM people • Global companies seeking growth are now increasingly focusing on Africa Africa In Focus
- 6. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Developing countries are enjoying robust growth and therefore, very dynamic labor markets
- 7. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • Fewer employers • Range of skills specialization is limited – More generalists, fewer specialists • Greater interchangeability of talents • Overlap of activities between the public and private sector How Do Developing Country Labor Markets Vary?
- 8. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • Person-driven roles • Lack of consistency • Roles less defined – Hierarchy of jobs is less clear – Career ladders and job families less robust • Many project/technical assistance roles exist Job Structures Vary
- 9. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Common Occupations Across Sectors • Finance • Human Resources • IT • Project Management • Administration • Secretarial • Clerical These occupations exist in virtually every enterprise
- 10. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • Developing markets are small • Company operations are often limited scope • Expats occupy key leadership roles • Leading employers: – Have a shared perspective on workforce composition – Offer a consistent, structured approach to rewards – Employ staff across a broad range of positions – Are well-established employers in the market Focus on the Leaders
- 11. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • We will take a quick look at labor markets in a group of 20 countries • The countries were selected from a list of those with a minimum of 5% GDP growth, while the range is as high as 12% • We will look at two sample jobs, and compare the total compensation, the pay “mix” and typical allowances and benefits Labor Market Preview
- 12. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Selected Countries • Angola • Bolivia • Burkina Faso • Cambodia • Ethiopia • Gabon • Ivory Coast • Lao • Liberia • Mauritania • Mongolia • Mozambique • Nigeria • Panama • Philippines • Sri Lanka • Tanzania • Turkmenistan • Uzbekistan • Zambia
- 13. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Source: World Trade Resources Average – 8.2% Median – 7.5%
- 14. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Source: World Bank Group Average – 7.2% Median – 5.3%
- 15. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com
- 16. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com
- 17. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com
- 18. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com
- 19. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • We classify these over-base components into several categories: – Cash Payments (fixed and variable) – Transportation – Housing – Loans – Food and Beverages – Recreation – Company Products – etc. Cash allowances, incentives and in-kind benefits
- 20. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Some Examples - Bangladesh • 13th month • Festival bonus (8% to 33%) • Housing allowance • Personal allowance • House loan • Car loan • Company car • Various short term incentives • Leave Fare Assistance • Beverages • Meal allowance • Uniforms • Company activities (picnics, sports, parties) • Conveyance allowance The following items were reported by at least one employer in Bangladesh:
- 21. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Some Examples - Ghana • 13th month • Housing allowance • Transport allowance • Personal allowance • Car loan • Company car • Personal loan • Various short term incentives • Leave Travel Allowance • Beverages • Subsidized meals • Uniforms • Company activities (picnics, sports, parties) • Soap, milk & tea package • Company products • Education allowance The following items were reported by at least one employer in Ghana:
- 22. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com Some Examples - Honduras • 13th month • 14th month • Free transport • Car loan • Company car • Personal loan • Various short term incentives • Vacation cottages • Vacation allowance • Beverages • Holiday activities (Xmas, Father’s Day, Mother’s Day) The following items were reported by at least one employer in Honduras:
- 23. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com • The World is Getting Bigger As more and more companies expand operations into new markets, there is a lot to learn • Think Global, Act Local Be aware of the different approaches that are common and do not attempt to impose your headquarters approach everywhere • Market Intelligence is Key You need reliable data, especially in the most dynamic global markets Wrap-Up
- 24. HR SOLUTIONS for DEVELOPING MARKETS birchesgroup.com For More Information We are Networked! • Warren Heaps, Partner – New York warren.heaps@birchesgroup.com +1-646-837-5586 • Birches Group website http://www.birchesgroup.com • Follow us on Twitter: @BirchesGroup • Developing Markets C&B Group on Linkedin http://www.linkedin.com/groups?gid=2201013 • International HR Forum Blog http://www.internationalhrforum.com