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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
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 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
L I V E P O L LQ U E S T I O N 1
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 very great extent
To a great extent
To a moderate extent
To a slight extent
Not at all
Based on 183 responses
2016 Results 2015 Results
Based on 185 responses
© MERCER 2016 12© MERCER 2016 12
TRENDS FOR 2017 ANDBEYONDAFRICA
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 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
Source: Mercer EMEA SMS September 2016
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?
L I V E P O L LQ U E S T I O N 2
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 19
L I V E P O L LQ U E S T I O N 2
To what extent do you proactively adapt your compensation policiesto address your talent issues?
0% 10% 20% 30% 40% 50%
To a very great extent
To a great extent
To a moderate extent
To a slight extent
Not at all
Based on 160 responses
2016 Results 2015 Results
Based on 134 responses
0% 10% 20% 30% 40% 50%
To a very great extent
To a great extent
To a moderate extent
To a slight extent
Not at all
© MERCER 2016 20© MERCER 2016 20
TRENDS FOR 2017 ANDBEYONDMIDDLE EAST
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 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
Source: Mercer EMEA SMS September 2016
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?
L I V E P O L LQ U E S T I O N 3
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 26
L I V E P O L LQ U E S T I O N 3
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 very great extent
To a great extent
To a moderate extent
To a slight extent
Not at all
2016 Results 2015 Results
Based on 133 responses
0% 10% 20% 30% 40%
To a very great extent
To a great extent
To a moderate extent
To a slight extent
Not at all
Based on 127 responses
© MERCER 2016 27© MERCER 2016 27
TRENDS FOR 2017 ANDBEYONDEUROPE
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 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
Source: September 2016 Salary Movement Snapshot
© 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
Source: September 2016 Salary Movement Snapshot
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
Source: Mercer EMEA SMS September 2016
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
Source: Mercer EMEA SMS September 2016
© MERCER 2016 37
To what extent are your employees consistently paid for the work they do?
L I V E P O L LQ U E S T I O N 4
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 38
L I V E P O L LQ U E S T I O N 4
To what extent are your employees consistently paid for the work they do?
0% 10% 20% 30% 40%
To a very great extent
To a great extent
To a moderate extent
To a slight extent
Not at all
2016 Results 2015 Results
Based on 137 responses
0% 10% 20% 30% 40%
To a very great extent
To a great extent
To a moderate extent
To a slight extent
Not at all
Based on 136 responses
© MERCER 2016 39© MERCER 2016 39
CALL TO ACTION
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 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 43© MERCER 2016 43
QUESTIONS
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 6
© 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
– Over 500 participating organizations– Available in 80+ EMEA markets– Updated quarterly– FREE for participants!
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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
www.imercer.com/global
© MERCER 2016 47
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