Africa: Update on National Compensation - … im ba bw e B e n S w a zi n d e r N am s ib ia Ma l aw...
Transcript of Africa: Update on National Compensation - … im ba bw e B e n S w a zi n d e r N am s ib ia Ma l aw...
Africa: Update on National
Compensation
NFTC International Compensation and Benefits Committee –
Houston
November 19, 2010Warren Heaps, Partner
Birches Group LLC
© 2010 Birches Group
What We Will Cover
Quick Overview of the African Market
A Glimpse into Compensation and Benefits Practices
Specific Examples in 8 countries
© 2010 Birches Group
© 2010 Birches Group
McKinsey reports:
“Africa’s 50-plus economies
are growing at a remarkable pace:
•
across the region, real GDP increased by an average of 4.9 percent a year between 2000 and 2008, compared with just 2.4 percent a year during the 1990s.
•
the annual flow of foreign direct investment (FDI) into Africa in 2008 increased to $62 billion, from $9 billion in 2000.
•
Relative to GDP, that is almost as large as the flow into China.”
Africa Snapshot
Source: McKinsey Quarterly
© 2010 Birches Group
Africa Vital Signs
McKinsey also compiled information about:
PopulationGDPLiteracyUrbanizationMineral ResourcesEase of Doing Business
Africa Vital Signs
© 2010 Birches Group
Growth is Across all Sectors
© 2010 Birches Group
Inflation is under control
8% in 2009 vs 13% in 2008
By the end of 2010, only 6 countries (mostly fragile states) are projected to have double-digit inflation compared with 27 countries at end-2008.
© 2010 Birches Group
Africa’s Labor Force
By 2040, Africa will:
Have a labor force of 1.1 billion, exceeding China and India
Be home to 20% of all young people in the world
Have the world’s largest working-age population
© 2010 Birches Group
The Future is Bright, but Africa Faces Many Challenges
Life expectancy around 50 yearsPoor educationInadequate infrastructureGovernance issues and civil unrestHIV and other epidemics
© 2010 Birches Group
Africa is a Continent of Opportunity
In the relentless search for growth, companies are expanding operations into Africa as the last frontier
There will be continued pressure on the employment market
Skills shortages abound
Market intelligence is key
© 2010 Birches Group
Sources and More Information
McKinsey Global Institute
Statistical Data from the International Monetary Fund
Recent Business Week articles:
Booming Africa
Africa's Biggest Score: A Thriving Economy
Africa: Coke's Last Frontier
A Glimpse of Compensation and Benefits in Africa
© 2010 Birches Group
Understanding the African Labor Market
African markets are different from North American and Western European marketsThere are fewer “good” employersThere are widespread talent shortagesMarkets are volatile, and vary widely between countriesExternal forces often interfere (civil unrest, instability of government, etc.)
© 2010 Birches Group
Competition for Talent is Tough
Multi-national companies seek the best talent
International organizations are seeking the same talent
You are competing with the UN, World Bank, Embassies and even NGOs
© 2010 Birches Group
Talent is Fluid
Employees move between employers frequently
Movement between sectors is commonBetween international public sector and private sector, too
Occupations start to blur
Example: Sr. Working Level Professional
© 2010 Birches Group
Senior Working Level Professional
Sr. AccountantHR SpecialistBrand ManagerIT Operations SpecialistAdministrative Services SpecialistEngineerAVP (Banking)Programme Officer
Job Thumbnail:
Supervise project teams and ensure effective integration of project activities with overall programme objectives; secure cooperation and support from external partners and clients; advise senior management on programme objectives; recommend new programme concepts.
Examples of Jobs Covered
© 2010 Birches Group
Which are the High and Low
countries?
Comparative DataSr. Working Level Professional
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Congo CAFGabonNigeria
South Africa
Equatorial
GuineaCote
d'Ivoire
Morocco
AngolaBots
wanaKenya
SenegalTogo
Zambia
ZimbabweBenin
Swazilan
dCam
eroon
Namibia
Mauritius
Malawi
SudanCape V
erde
Congo, D.R.
Tanzani
aMaur
itania
Egypt
Burkina F
asoMozam
bique
Algeria MaliNiger
Lesotho
ChadLiberi
aLibya
TunisiaUgandaGuineaEritr
eaRwanda
Sao TomeSierr
a Leon
eBurun
diGhana
Madagascar
EthiopiaGam
biaSeyc
helles
Ann
ual T
otal
Com
pens
atio
n (U
S$)
25th Percentile:$42,097Tunisia
75th Percentile:$78,147Togo
Median:$62,652Tanzania
Mean:$62,113
© 2010 Birches Group
The Trap
Most surveys capture average actual incumbent data
But with fewer incumbents, there is a lot of volatility
We suggest min and max “bookends” to really understand developing country markets
This allows examination of the spans along various percentiles, as well the variance at each percentile between low and high
© 2010 Birches Group
The Market Footprint
We refer to the range of the market, from minimum to maximum, from 25th to 75th percentile, as the market “footprint”
© 2010 Birches Group
Sample “Footprint” Chart
Illustrates Minimum,MRP and Maximum at
25th, 50th
and 75th
percentile
Provides “bookends”
tobroad market range
Easy to determine if
you are “in”
the market
Market FootprintSenior Working Level Professional
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Market Position
Ann
ual T
otal
Com
pens
atio
n (U
S$)
MIN 18,696 32,770 44,690 62,570 88,728 MRP 23,660 42,097 62,652 78,147 115,256 MAX 30,860 50,608 76,343 98,323 141,786
Low 25th Median 75th High
© 2010 Birches Group
Base Salary is just the beginning…
Fixed allowancesHousingTransportationMealsCommutingCompany productsSubsidized loans
CarsMobile phonesVariable payPensionProfit sharingInsurance benefitsEquity compensation
In addition to base salary, companies may provide:
A Closer Look…
© 2010 Birches Group
Selected Markets
AngolaEgyptGhanaLibya
MozambiqueNigeriaSouth AfricaUganda
We will examine the compensation and benefits levels in more detail for the following countries:
For each market, we’ll look at the same position
© 2010 Birches Group
Senior Working Level Professional
Sr. AccountantHR SpecialistBrand ManagerIT Operations SpecialistAdministrative Services SpecialistEngineerAVP (Banking)Programme Officer
Job Thumbnail:
Supervise project teams and ensure effective integration of project activities with overall programme objectives; secure cooperation and support from external partners and clients; advise senior management on programme objectives; recommend new programme concepts.
Examples of Jobs Covered
© 2010 Birches Group
Angola – Market Footprint
© 2010 Birches Group
Angola – Beyond Base
© 2010 Birches Group
Angola – Comp Mix
© 2010 Birches Group
Egypt – Market Footprint
© 2010 Birches Group
Egypt – Beyond Base
© 2010 Birches Group
Egypt – Comp Mix
© 2010 Birches Group
Ghana – Market Footprint
© 2010 Birches Group
Ghana – Beyond Base
© 2010 Birches Group
Ghana – Comp Mix
© 2010 Birches Group
Libya – Market Footprint
© 2010 Birches Group
Libya – Beyond Base
© 2010 Birches Group
Libya – Comp Mix
© 2010 Birches Group
Mozambique – Market Footprint
© 2010 Birches Group
Mozambique – Beyond Base
© 2010 Birches Group
Mozambique – Comp Mix
© 2010 Birches Group
Nigeria – Market Footprint
© 2010 Birches Group
Nigeria – Beyond Base
© 2010 Birches Group
Nigeria – Comp Mix
© 2010 Birches Group
South Africa – Market Footprint
© 2010 Birches Group
South Africa – Beyond Base
© 2010 Birches Group
South Africa – Comp Mix
© 2010 Birches Group
Uganda – Market Footprint
© 2010 Birches Group
Uganda – Beyond Base
© 2010 Birches Group
Uganda – Comp Mix
Over-base Comp Varies A Lot!
16.8
12.8
26.4
4.9 4.7
35.5
16.615.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Angola
Egypt
Ghana
Libya
Mozambique
Nigeria
South Afri
ca
Uganda
Perc
ent o
f Tot
al C
ompe
nsat
ion
Span from 25th to 75th Percentile
29.2%
32.7%
47.8%
49.5%
56.5%
59.9%
89.9%
127.0%
Libya
Ghana
Angola
South Africa
Mozambique
Egypt
Uganda
Nigeria
Span of 50th Percentile (Min to Max)
26.8%
35.5%
43.6%
50.9%
52.8%
56.8%
58.6%
79.0%
Uganda
Ghana
Angola
Mozambique
Libya
South Africa
Egypt
Nigeria
© 2010 Birches Group
In Summary
Markets in Africa vary widelyThe package composition differs from country to countryIf you focus on base salary only, you will miss the mark!Spans and inter-grade differentials are not standardGood market intelligence is the key to attracting and retaining the right talent
© 2010 Birches Group
About Birches Group
Specialized HR consultancy founded in 2005, with HQ in New York, Data Centre in Manila, and two offices in Europe
Total compensation surveys in 147 developing markets via Indigo™ survey portal
Compensation policy and scale design
OD consulting (job evaluation, competency models, performance management)
Expatriate policy consulting
© 2010 Birches Group
For More Information We are Networked!
Warren Heaps, Partner – New [email protected]
Benette Santiago, Senior Survey Specialist - [email protected]
Birches Group websitehttp://www.birchesgroup.com
Follow us on Twitter: @BirchesGroup
Developing Markets Compensation & Benefits Group on LinkedInhttp://www.linkedin.com/groups?gid=2201013
International HR Forum Bloghttp://internationalhr.wordpress.com