compensation planning for 2017 - mercer · pdf filecompensation planning for 2017 emea...

H E A L T H W E A L T H C A R E E R

C O M P E N S AT I O NP L A N N I N G F O R 2 0 1 7E M E A F O R E C A S T SA N D T R E N D S

NOVEMBER 3 2016

Monika Todor, PolandNuno Gomes, UAENicol Mullins, South AfricaDavid Wreford, UK

© MERCER 2016 1

T O D AY ’ S S P E A K E R S

MONIKA TODORPoland

NUNO GOMESUAE

NICOL MULLINSSouth Africa

DAVID WREFORDUK

© MERCER 2016 2

Context forPlanning

MercerSurveyInsights

Trends for2017 andBeyond

Call toAction

A G E N D A F O R T O D AY ’ S S E S S I O N

© MERCER 2016 3© MERCER 2016 3

CONTEXT F ORPLANNING

C O M P E N S A T I O N P L A N N I N G F O R 2 0 1 7

© MERCER 2016 4

E U R O P EE C O N O M I C A N D M A R K E T C O N T E X T

4

BREXITmeans

BREXIT

CASH BENEFITS

CAREER WORKPLACE

PRIDE/AFFINITY/PURPOSE

CUTURAL ALIGNMENT

CASH BENEFITS

CAREER WORKPLACE

PRIDE/AFFINITY/PURPOSE

WORKFORCE PLANS

BUSINESS VISION

-5%

0%

5%

10%

15%

20%

25%

30%

Irela

nd

Switz

erla

nd

Gre

ece

Spai

n

Den

mar

k

Fran

ce

Italy

Ger

man

y

UK

Lith

uani

a

Slov

enia

Hun

gary

Pola

nd

Rom

ania

Serb

ia

Turk

ey

Rus

sia

Ukr

aine

Kaz

akhs

tan

Salary increases Inflation GDP Unemployment

© MERCER 2016 5

M I D D L E E A S TE C O N O M I C A N D M A R K E T C O N T E X T

• GEO-POLITICAL INSTABILITY

• ECONOMIC UNCERTAINTY AND TURMOIL

• GOVERNMENT INTERVENTION

© MERCER 2016 6

A F R I C AE C O N O M I C A N D M A R K E T C O N T E X T

• Low GDP Growth

• Low Inflation

• Bad performing currencies

Sources: GDP, inflation: http://www.imf.org, World Economic Outlook Database October 2016

http://www.nigerianinfopedia.com/strongest-currencies-africa-top-10/

https://www.thecable.ng/its-official-naira-now-africas-worst-performing-currency-of-2016

• High GDP Growth

• High Inflation

© MERCER 2016 7© MERCER 2016 7

MERCER SURVEYINSIGHTS


© MERCER 2016 8

5,165 PARTICIPANTS

S A L A R Y M O V E M E N T S N A P S H O T S U R V E YP A R T I C I P A N T P R O F I L E – S E P T E M B E R 2 0 1 6

83MARKETS

Source: Mercer EMEA SMS September 2016

401 UNIQUEORGANISATIONS

© MERCER 2016 9

S A L A R Y M O V E M E N T S N A P S H O TP A R T I C I P A N T P R O F I L E

17%

6%

12%

7%

11%

13% 6%5%

13%

ENERGYHIGH TECHCONSUMER GOODS LIFE SCIENCESOTHER DURABLEGOODS MANUFG

SERVICES FINANCIAL SERVICES

10%

RETAIL & WHOLESALEOTHEROTHER NON-DURABLEMANUFACTURING

© MERCER 2016 10

To what extent do your employees understand the basis upon whichtheir pay and incentives are determined?

L I V E P O L LQ U E S T I O N 1

A – Not at all

B - To a slight extent

C - To a moderate extent

D – To a great extent

E – To a very great extent

© MERCER 2016 11

0% 10% 20% 30% 40% 50% 60%

To a very great extent

To a great extent

To a moderate extent

To a slight extent

Not at all


To what extent do your employees understand the basis upon whichtheir pay and incentives are determined?

0% 10% 20% 30% 40% 50% 60%


To a great extent


To a slight extent

Not at all

Based on 183 responses

2016 Results 2015 Results


© MERCER 2016 12© MERCER 2016 12

TRENDS FOR 2017 ANDBEYONDAFRICA


© MERCER 2016 13

T R E N D S F O R 2 0 1 6 A N D B E Y O N DA F R I C A

• AFRICA is VUCA– Volatile

- Currency– Uncertain

- IMF latest projections- slow down in CPI- small growth in GDP

– Complex- Legislation

– Ambiguous

• Focus is on cash and benefits– Base salary not relevant benchmark

• Skill scarcity– High demand low supply - Most companies buy skills – very few build

© MERCER 2016 14

O I L P R O D U C I N G C O U N T R I E SN O N O I L P R O D U C I N G C O U N T R I E S

• Angola

• Cameroon

• Chad

• DRC

• EQG

• Gabon

• Ghana

• Malawi

• Niger

• Nigeria

• ROC

• South Africa

• South Sudan

© MERCER 2016 15

L O O K I N G A T I N F L AT I O NO I L V S N O N - O I L P R O D U C I N G C O U N T R I E S

* Excluding South Sudan 8.81%

Source - GDP, inflation : http://www.imf.org, World Economic Outlook Database October 2016

Inflation 2016Average

2017Average

2018Average

Oil Producing 44.6%* 16.6% 10.3%

Non-Oil Producing 5.9% 5.7% 4.9%

0.97%

0.59%

-1.58%

1.59%

1.45%

0.002%

476.02%

33.68%

19.78%

HighestOil Producing Non Oil Producing

19.10%

16.70%

9.73%

LowestOil Producing Non Oil Producing

© MERCER 2016 16

L O O K I N G A T G D PO I L V S N O N - O I L P R O D U C I N G C O U N T R I E S

Source - GDP, inflation : http://www.imf.org, World Economic Outlook Database October 2016

GDP Growth 2016Average

2017Average

2018Average

Oil Producing -0.06% 2.12% 3.20%

Non-Oil Producing 4.02% 4.54% 5.04%

7.17%

6.63%

6.49%

0.45%

-0.28%

-0.51%

5.23%

4.80%

3.94%

-1.74%

-9.86%

-13.11%

HighestOil Producing Non Oil Producing

LowestOil Producing Non Oil Producing

© MERCER 2016 17

S A L A R Y I N C R E A S E F O R E C A S T S F O R 2 0 1 7A F R I C A – A L L R E S P O N S E S


Country Increase Country IncreaseMalawi 15.3% Mozambique 6.5%Ghana 11.6% Tunisia 6.3%Ethiopia 10.9% Mauritius 5.0%Egypt 10.0% DRC 5.0%Nigeria 9.7% Cameroon 4.5%Angola 8.1% Zimbabwe 4.5%Zambia 7.8% Morocco 4.4%Kenya 7.5% Senegal 4.1%Uganda 7.3% Burkina Faso 4.0%South Africa 7.0% Ivory Coast 4.0%Tanzania 7.0% Mali 3.8%Algeria 6.7% Gabon 2.9%

© MERCER 2016 18

To what extent do you proactively adapt your compensation policiesto address your talent issues?


A – Not at all





© MERCER 2016 19


To what extent do you proactively adapt your compensation policiesto address your talent issues?

0% 10% 20% 30% 40% 50%


To a great extent


To a slight extent

Not at all




0% 10% 20% 30% 40% 50%


To a great extent


To a slight extent

Not at all

© MERCER 2016 20© MERCER 2016 20

TRENDS FOR 2017 ANDBEYONDMIDDLE EAST


© MERCER 2016 21

T R E N D S F O R 2 0 1 7 A N D B E Y O N DM I D D L E E A S T

SIMPLIFICATION

ENGAGEMENT

COST OPTIMIZATION

© MERCER 2016 22

A N N U A L T O T A L R E M U N E R A T I O NR E G I O N A L A N D G L O B A L P E R S P E C T I V E

67

67

65

56

68

65

59

56

63

57

12

15

12

16

11

10

7

7

7

8

3

4

3

1

1

21

23

18

27

1

3

2

15

2

3

1

2

17

11

19

12

18

21

12

12

12

8

Africa

Asia

LATAM

NorthAmerica

EasternEurope

WesternEurope

MiddleEast

UAE

SaudiArabia

Qatar

EXECUTIVES

Salary STI Allowances LTI Benefits

69

71

70

73

70

74

57

54

62

53

6

9

6

5

5

4

4

4

4

4

5

4

4

2

1

24

27

20

34

19

16

20

22

22

21

15

15

14

9

Africa

Asia

LATAM

NorthAmerica

EasternEurope

WesternEurope

MiddleEast

UAE

SaudiArabia

Qatar

PROFESSIONALS

Salary STI Allowances LTI Benefits% of TEC % of TEC

Source: Mercer’s 2016 Total Employment Costs Report

© MERCER 2016 23

S T A F F T U R N O V E R A N D H I R I N G I N T E N T I O N SM A R K E T T R E N D S

Source: 2014 - 2016 UAE TRS

HIRINGINTENTIONS

68%

71%

57%

62%

44%

42%

5%

4%

5%

3%

10%

3%

27%

25%

38%

35%

46%

55%

0% 20% 40% 60% 80% 100%

2014

2015

2015

2016

2016

2017

Increase Headcount Decrease Headcount No Change

As of 2014

As of 2016

As of 2015

© MERCER 2016 24

S A L A R Y I N C R E A S E F O R E C A S T S F O R 2 0 1 7M I D D L E E A S T / A S I A – A L L R E S P O N S E S


Country Increase Country IncreaseIran 20.1% Jordan 5.3%Syria 12.5% Bahrain 5.0%Pakistan 10.0% Kuwait 5.0%Yemen 8.5% Oman 5.0%Kazakhstan 8.5% Qatar 5.0%Uzbekistan 8.3% Saudi Arabia 5.0%Azerbaijan 8.0% UAE 5.0%Iraq 6.0% Israel 3.1%Lebanon 5.4%

© MERCER 2016 25

To what extent do your pay and bonus programmes differentiate theemployee attributes you feel are important to drive business performance?


A – Not at all





© MERCER 2016 26


To what extent do your pay and bonus programmes differentiate theemployee attributes you feel are important to drive business performance?

0% 10% 20% 30% 40%


To a great extent


To a slight extent

Not at all



0% 10% 20% 30% 40%


To a great extent


To a slight extent

Not at all


© MERCER 2016 27© MERCER 2016 27

TRENDS FOR 2017 ANDBEYONDEUROPE


© MERCER 2016 28

0%

1%

2%

3%

4%

5%

6%

AT BE CH DE DK ES FI FR GR IE IT NL NO PT SE UK

20082016Average 2008Average 2016

On average 1,8 pp drop in salary increases in theWE region 2016 vs. 2008

2 0 0 8 V S . 2 0 1 6 S A L A R Y I N C R E A S E SW E S T E R N E U R O P E – A L L L E V E L S

Source: June 2016 Salary Movement Snapshot

© MERCER 2016 29

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

BG CZ EE HR HU KZ LT LV PL RO RU RS SK SI TR UA

20082016Average 2016Average 2008

2 0 0 8 V S . 2 0 1 6 S A L A R Y I N C R E A S E SC & E – A L L L E V E L S

On average 5.68 pp drop in salary increases in theCEE region 2016 vs. 2008

Source: June 2016 Salary Movement Snapshot

© MERCER 2016 30

P AY P R O G R E S S I O NC A R E E R S T R E A M S

2.93.7

3.3 4.2

0 €

50,000 €

100,000 €

150,000 €

200,000 €

DENMARK FRANCE GERMANY UNITED KINGDOM

Para-Professional Professional

Management ExecutiveWESTERN EUROPE

6.4 8.07.9 8.3

0 €

20,000 €

40,000 €

60,000 €

80,000 €

100,000 €

CZECH REPUBLIC POLAND ROMANIA RUSSIA

EASTERN EUROPE

Source: 2016 Total Remuneration Surveys

© MERCER 2016 31

S A L A R Y I N C R E A S E SW E S T E R N E U R O P E

31

19

14 1517

0 3

56

UnitedKingdom

Denmark France Germany

NOM IN AL AND RE AL SAL ARYINC RE ASE 2009-20 1 62009=0% (CUM ULATI VE )

Nominal Salary IncreaseReal Salary Increase

Denmark

FranceGermany

UK

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

2009 2010 2011 2012 2013 2014 2015 2016

R E AL C U M U L AT IV E S AL ARY I N C R E AS E S2009-20 1 6 (2009=0 %)

Source: June 2016 Salary Movement Snapshot & IMF World Economic Outlook April 2016

© MERCER 2016 32

S A L A R Y I N C R E A S E SE A S T E R N E U R O P E

32

34

19

66

25

5 7 7 10

Romania CzechRepublic

Russia Poland

NOM IN AL AND RE AL SAL ARYINC RE ASE 2009-20 1 62009=0% (CUM ULATI VE )

Nominal SalaryIncreaseReal SalaryIncrease

CzechRepublic

Poland

Romania

Russia

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

R E AL C U M U L AT IV E S AL ARY I N C R E AS E S2009-20 1 6 (2009=0 %)

Source: June 2016 Salary Movement Snapshot & IMF World Economic Outlook April 2016

© MERCER 2016 33

A C T U A L S A L A R Y I N C R E A S E SP E R F O R M A N C E M A T R I X

3.4% 3.7% 3.9% 3.7%

0%1%2%3%4%5%

Denmark France Germany UK

Average actualsalary increase 2016

Top Performers

Standard Performers

Low Performers

Market Average

Source: September 2016 Salary Movement Snapshot

3.7% 3.6% 4.0% 4.0%

0%1%2%3%4%5%

Denmark France Germany UK

Average forecastsalary increase 2017

Top Performers

Standard Performers

Low Performers

Market Average


© MERCER 2016 34

A C T U A L S A L A R Y I N C R E A S E SP E R F O R M A N C E M A T R I X


4.1% 4.8%6.5%

0%2%4%6%8%

10%

Czech Republic Poland Romania Russia

Average actualsalary increase 2016

Top Performers

Standard Performers

Low Performers

Market Average

11.1%

4.5% 4.8%6.5%

0%2%4%6%8%

10%

Czech Republic Poland Romania Russia

Average forecastsalary increase 2017

Top Performers

Standard Performers

Low Performers

Market Average

10.6%

© MERCER 2016 35

S A L A R Y I N C R E A S E F O R E C A S T S F O R 2 0 1 7W E S T E R N E U R O P E – A L L R E S P O N S E S


Country Increase Country IncreaseNorway 3.0% France 2.2%Germany 2.9% Finland 2.0%UK 2.8% Portugal 2.0%Austria 2.5% Spain 2.0%Denmark 2.5% Luxembourg 2.0%Italy 2.5% Belgium 1.8%Ireland 2.5% Greece 1.8%Netherlands 2.5% Switzerland 1.8%Sweden 2.5%

© MERCER 2016 36

Country Increase Country IncreaseBelarus 10.0% Estonia 3.0%Ukraine 10.0% Latvia 3.0%Russia 8.0% Lithuania 3.0%Turkey 8.0% Slovakia 2.8%Moldova 7.0% Albania 2.8%Georgia 6.3% Czech Republic 2.8%Armenia 5.0% Croatia 2.7%Serbia 4.5% Macedonia 2.6%Romania 4.5% Slovenia 2.5%Bulgaria 4.0% Bosnia and Herzegovina 2.4%Hungary 3.4% Montenegro 2.4%Poland 3.0% Cyprus 1.5%

S A L A R Y I N C R E A S E F O R E C A S T S F O R 2 0 1 7C E N T R A L / E A S T E R N E U R O P E – A L L R E S P O N S E S


© MERCER 2016 38


To what extent are your employees consistently paid for the work they do?

0% 10% 20% 30% 40%


To a great extent


To a slight extent

Not at all



0% 10% 20% 30% 40%


To a great extent


To a slight extent

Not at all


© MERCER 2016 40

D I S R U P T I V ET E C H N O L O G Y

W O R L DS O U R C I N G

W O R K F O R C E T R E N D S I M P A C T I N G T H ET A L E N T A G E N D A I N 2 0 1 6

A U T O M A T I O N& M A C H I N EL E A R N I N G

B I G D A T AM A N A G E M E N T

M U L T I -G E N E R A T I O N A L

W O R K F O R C E

R I S E O F T H EF R E E A G E N T

C O M P E T I T I O NF R O M

E M E R G I N GM A R K E T S

T A L E N TS C A R C I T Y

L E V E R A G I N G AD I V E R S E

L A B O R P O O L

F L E X I B L EW O R K I N G

Source: 2016 Mercer Global Talent Trends Survey

© MERCER 2016 41

BUILDDIVERSETALENTPOOLS

EMBRACETHE NEW

WORKEQUATION

DESIGNCOMPELLING

CAREERS

SIMPLIFYTALENT

PROCESSES

REDEFINE THE VALUE OF HR

© MERCER 2016 41

Source: 2016 Mercer Global Talent Trends Survey

H O W D O W E A C C E L E R A T E T H E T A L E N T E N G I N E ?

© MERCER 2016 42

M E R C E R I N S I G H T

COMMUNICATE A CLEAR EMPLOYEE VALUE PROPOSITION

E V P

HELP INDIVIDUALS FIND THEIR NICHE

Raise employee awareness of programmes and listen for evolvingneedsInfluence of consumerization on the workplace is shaping expectations

Provide managers the tools and resources needed tounderstand their employees as individuals

I V PMANAGERS

Examine pay parity in the workplace and reviewreward structures

STRIVE FOR TRANSPARENCY AND PAY EQUITY

FOCUS ON THE INDIVIDUAL

Everyone wants to do meaningful work. How this is done and what ismost important for ‘meaningfulness’ varies around the world

Work / life integration

Managers are at the heart of the equation

What’s important differs by geography

E M B R A C E T H E N E W W O R K E Q U A T I O N

© MERCER 2016 44

Q U E S T I O N S

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NUNO GOMES DAVID WREFORDNICOL MULLINSMONIKA TODOR

© MERCER 2016 45

S A L A R Y M O V E M E N T S N A P S H O T ( S M S ) S U R V E Y

45

SALARY MOVEMENT SNAPSHOTRegister for our quarterly snapshot surveyproviding complimentary salary movementdata: www.imercer.com/sms

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© MERCER 2016 46

B E A M O R E I N F O R M E D C O M P E N S A T I O N P R O F E S S I O N A L

CompensationHandbook

EngineeringSalariesWorldwide

GlobalCompensationPlanningReport

GlobalPaySummary

InternationalGeographicSalaryDifferentials

PayDifferentialswithinChina

PayDifferentialswithinIndia

R&DSalariesaround theWorld

Structure ofSalariesaround theWorld

Sales Salariesaround theWorld

Short-TermIncentivesaround theWorld

TotalEmploymentCosts aroundthe World

Policies & Practices

Global HRFactbook

HR AtlasAsia Pacific

HRManagementTerms

M&A R Issuesaround theWorld

Survey on CorporateResponsibility and SustainabilityPolicies and Practices

Survey Report of WorkforceReadiness: When DisasterStrikes

Global Mobility

Benefits Survey forExpatriates and InternationallyMobile Employees

GlobalMobilityHandbook

Global Mobility Metrics:Focus on Retaining KeyTalent

Worldwide Survey ofInternational AssignmentPolicies and Practices

Benefits

InternationalCar Policies

SeverancePay aroundthe World

WorldwideBenefit andEmploymentGuidelines

Compensation

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