Mercer

HR Trends in ASEANInsights into the world’s fastest emerging market

23 APRIL 2015

MERCER

Thank You

2013 GDP $861b; Per capita $3,460

2013 GDP $298b; Per capita $55,1832013 GDP $269b; Per capita $2,707

2013 GDP $388b; Per capita $5,6792013 GDP $312b; Per capita $10,421

ASEAN

625m35% 25%

2013 GDP $2,395b; Per capita $3,83228.0

ASEANASSOCIATION OF SOUTHEAST ASIAN NATIONS

Indonesia, Philippines,Singapore, Malaysia,Thailand, Vietnam, Myanmar,Cambodia, Laos, Brunei

Percentage ofsmartphone users

Percentage ofinternet users

Notes:- GDP figures reflected in US$- ASEAN’s percentage ofsmartphone/ internet usersconsiders 5 key countries only(Indonesia, Philippines,Singapore, Malaysia, Thailand)- Source: Research Partnership,ASEAN.org, AEC Advisory

2

MERCER

4.7%GDP

1.3%GDP

ASEAN as a Market Has Tremendous Potential

329 April 2015

World

USA

Europe

APAC

ASEAN

3.8%GDP

3.6%GDP

4.2%GDP

Source: IMA Asia February 2015, World Bank Data 2014

Note: APAC GNE figures do not include Taiwan

74trillionGNE

12trillionGNE

17trillionGNE

2.2trillionGNE

21.5trillionGNE

MERCER

ASEAN GDP, Inflation & Salary Increase Differ per Country

429 April 2015

GDP Inflation

SalaryIncrease

(2015Forecast)

IDO 5.2 5.7 9.4MY 4.6 3.7 5.7PH 6.8 2.5 8.4SG 2.6 0.5 4.1TH 3.2 0.7 5.9VN 6.5 2.4 10.3

ID MY PH SG TH VN

GDP Inflation Salary Increase (2015 Forecast)

Source: IMA Asia February 2015, Mercer Market PulseSurvey 2014 Cycle 2

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q Free flow of goods across ASEAN Countriesü Tariff reductionü Certification requiredü Data integration & information for custom documentation

q Free flow of servicesü Reduction or elimination of barriers for foreign service providers and workers

q Free flow of investmentü Investment protectionü Cooperation and facilitation for investment policy

q Free flow of Skilled labour

Source : Kompas, November 2014

What Will the AEC Bring to ASEAN

4 Pillars of AEC

q single market and production baseq a highly competitive economic regionq a region of equitable economic developmentq a region fully integrated into the global economy

AECImpact

5

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More Focus on ProductivityProductivity per FTE: all industries by country

629 April 2015

Formula:Revenue (in USD 000s)

FTE

*NOTE: Based on averageSource : Mercer Analytics

Indonesia Malaysia

Philippines

Singapore

Thailand Vietnam

MERCER 729 April 2015

37

24

35

41

2725

45

38

31

26

37

22 22

3735

29

38

28

38

45

30 28

48

43

3330

38

25 25

40 41

33

0

10

20

30

40

50

60

AU BD CN HK ID IN JP KR LK MY NZ PH PK SG TH VN

2010 2020

More Focus on ASEAN’s Younger WorkforceMedian age across ASEAN is relatively low

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Modern Workforce in a Nutshell – ASEAN has do deal with this!

29 April 2015

LOL

TL; DR / TL;NR

IDRC

kthxbye

Like a boss

FTW

IDKJTLYK

IAWTC8

MERCER

Annual Growth in Job Advertisements in Asia – Malaysia tops the list

929 April 2015

Malaysia Japan Singapore China Hong Kong South Korea

+48% +42% +23% +19% +3%

Gro

wth

inon

line

reta

ildr

ives

hirin

g

+15%

Ups

killi

ngcr

eate

smor

ere

plac

emen

tpos

ition

s

Impr

oved

busin

ess

perfo

rman

cesu

ppor

tsst

eady

grow

th

Gov

ernm

enti

nitia

tives

boos

tsjo

bcr

eatio

n

Regu

latio

nsdr

ive

hirin

gin

gove

rnan

ce

Mod

estg

row

thsp

urre

dby

polic

ych

ange

Source: Robert Walters, 2015

MERCER

Voluntary Attrition Rates Remain High In ASEAN

1029 April 2015

8.80%

17.10%

12.60%

12.70%

17.60%

12.00%

8.40%

14.70%

14.90%

11.40%

14.70%

11.00%

ID MY PH SG TH VN

Voluntary attrition percentage(Average)

2013 ( Full Year) 2014 (Jan - Oct)

1.70%

3.00%3.20%

1.50%

3.30%3.20%

1.50%

2.40%

6.10%

1.90%

2.80%2.70%

ID MY PH SG TH VN

Retrenchment Rate (Average)

2013 ( Full Year) 2014 (Jan - Oct)

MERCER

Salary Increases Across ASEAN are a Concern for Companies

1129 April 2015

9.1%

5.4%

7.8%

4.3%

5.8%

10.2%

9.4%

5.7%

8.4%

4.1%

5.9%

10.3%

ID

MY

PH

SG

TH

VN

Salary increase (Average)

2014 (Actual /Budgeted) 2015(Forecast)

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Short Term Incentive Plans are of High Value to Employees

1229 April 2015

31.6 30.8 30

22.6

43.5

27.9

33.5 34.6

39

23.2

47.2

30.0

ID MY PH SG TH VN

Sales Incentive Increase (Average)

2014(Budgeted) 2015 ( Forecast)

24.8%

17.0%

23.9%

16.3%

21.0% 15.4%23.6%

19.2%

29.7%

16.8%

21.4%

15.3%

ID MY PH SG TH VN

Variable Bonus Increase(Average)

2014(Actual/Budgeted) 2015 ( Forecast)

MERCER

Benefits Play a Key Role in Competitive Total Rewards

1329 April 2015

HK 62%

ID 67%IN 65%

KR 57%

MY 69%

PH 65%

SG 57%

TH 71%

64%77% 78% 71% 70% 70%

51%40%

58% 75% 69%54%

51% 39%28%

43%35%

41%

14%12% 8%

14%

9%7%

VN TH SG PH MY ID

Objective behind Benefits Review

To ensure that the benefits are above the median market offering

To align with the corporate HR philosophy

To have an understanding of where the company benefits standagainst the marketTo ensure that the benefits are competitive with the medianmarket offering

Percentage of companies planning toreview benefits policy

MERCER

Although Cost and Legislative Changes tend to Drive Change in Policies

1429 April 2015

HK ID IN JP KR MY PH SG TH TW VN

Allowance 2 3 2 3 2 2 3 2 1 1Life/Personal

Accident 2 2 1 1 3 2 2 1 3Health

Insurance 1 1 1 3 2 1 1 1 1 1 2Leave

Benefits 3

Car Benefits 3 3

1 2 3Not in top 3

Attribute's rank in importance

Top 3 Benefits that companies want to review

MERCER

COMPENSATION BENEFITS

CAREERWORK

PLACE /LIFESTYLE

CULTURAL ALIGNMENT

DIFFERENTIATED

CONTRACTUAL

AFFINITY/PRIDE /

PURPOSEUNIQUE

EMOTIONAL

COMPETITIVE

Focusing on A Complete Employee Value Proposition will Make aDifference

MERCER 1629 April 2015

LET’S HEAR FROM OURLOCAL EXPERTS

MERCER

ASEAN

ASEANWE HAVE 5MERCER LOCALOFFICESIndonesia, Philippines,Singapore, Malaysia,Thailand and our affiliatepartner, TalentNet, inVietnam.

• ECONOMICOUTLOOK

• BUSINESSLANDSCAPE

• TALENT TRENDS

• LOOKING AHEAD

GODELIEVE KROONENBERG

FLORIZA MOLON

SATYA RADJASA

KULAPALEE TOBING

NICHANANT DULSARIANNA CHABBAT

17

MERCER 1829 April 2015

QUESTIONS

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