Willis Towers Watson Data Services · Compensation Design module Ø Data Interactive module •...

20.11.2017

© 2017 Willis Towers Watson. All rights reserved.

CEEMEA Compensation Market TrendsWebcast

Willis Towers Watson Data Services

Agenda

2© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

Introduction

2017 CEEMEA market trends and insight from the latest survey results

How to find us

Our Compensation Analytics

We are an integrated advisory, broking and solutions company organized around four business segments designed to meet our clients’ risk and people needs


Willis Towers Watson

Talent and Rewards

Health and Benefits

Technology and Administrative

Solutions

Retirement

Global Network Group

Human Capital & Benefits

We are an Integrated Solutions Provider

• Compensation Software:

Ø Market Analysis & Compensation Design module

Ø Data Interactive module

• Access to global network of Data Services, Rewards and HR Software consultants

• Compensation, Benefits & HR Practices Data

• Delivered through an integrated software platform

We are an Integrated Solutions Provider

4

=Data Software Advisory

+ +Valuable and unique proposition for our clients to address the entire annual compensation cycle

© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

Compensation, Benefits & HR Practices Data offerings

© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 5

Central Eastern Europe, the Middle East & Africa:

Survey Data

Benefits Design PracticesRetirement § DB, DC or hybrid schemes

Healthcare § Medical, dental and vision

Wellness§ Medical check up§ Employee Assistance Program

Risk benefit plans§ Death, accident, disability § Critical illness

Paid time offMeal benefitsFlexible benefits

HR Policies and Practices§Compensation policies and

practices§ Starting salaries§ Variable pay§Company cars§Guaranteed payments, cash

allowances and perquisites§ Sales force policies and practices§ Education, training and professional

development§Working hours§ Business travel and relocation§ Attraction, retention and termination§ Length of service award

CompensationPosition Information§ Employee location§ Geographic responsibility

Salary Information§ Base pay§ Guaranteed bonus§ Allowances§ Variable pay (actual and target)§ Long-term incentives

Methodology§ Career Bands/Levels + Global

Grades grouped by job Functions + Disciplines (areas of specialization)

BDPHRPComp

59Countries

521,449Incumbents

2,939+Participants

2017 CEEMEA market trends and insight from the latest survey results


Common market trends


Skills Shortage

Challenges in attraction and

retention of right talent

EconomicGrowth

Stronger GDP, lower inflation and

decreasingunemployment

Legislative Changes

New tax laws and other governmental

changes are impacting pay and

benefits

7

CEEMEA Macroeconomic KPI’s

0%

5%

10%

15%

20%

25%

30%

35%

CEEMEA Annual GDP Growth and CPI % 2018

CPI % GDP %

CPI%Nigeria: 14.2%Egypt: 18.9%Rep. of Congo: 31.9%2018 Q1 Median Q3

GDP % 1.9 2.9 3.3

CPI % 2.2 3.8 6.2

! 2018 Median CPI % for region projected at ~3.8%


Source: Economist Intelligence Unit, November 13, 2017

8

CEEMEA Macroeconomic KPI’s

0,6%

28,1%

0%

5%

10%

15%

20%

25%

30%

35%

CEEMEA Unemployment % 2017 - 2018

20172018 (forecast)

Source: Economist Intelligence Unit, November 1, 2017

CEEMEA Unemployment % 2017-2018

Median

2017 9.02018 8.2


Challenges attracting employees in key workforce segments remain high overallEven more so for organizations operating in emerging economies


Mature Markets Emerging Markets

28%

45%

55% 54% 56%

44%

57%

66%

77% 76%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

All employees Diverseemployee

populations

Critical-skillemployees

High-potentialemployees

Top-performingemployees


populations




Attraction Challenges

Nearly half (48%)of employers report

hiring activity increased

EMEA

Source: Willis Towers Watson 2016 Talent Management & Rewards Study – Global

Retaining key employee groups remains difficult, especially in emerging markets Close to three quarters of employers have trouble retaining high potentials


Mature Markets Emerging Markets

20%

28%

37%

47%44% 41%

47%

59%

70%65%

0%

10%

20%

30%

40%

50%

60%

70%

80%


populations





populations




Retention Challenges

One-third (35%) of employers report

turnover activity increased

EMEA

Source: Willis Towers Watson 2016 Talent Management & Rewards Study – Global

Legislative Changes 2017 -2018


UAE to implement VAT on 1 January 2018VAT to be introduced at a rate of 5% with some limited exceptions including basic food items, healthcare and education. The UAE are planning to implement on 1 January 2018 - other GCC countries may do so at the same time or by 1 January 2019 at the latest.

Kenya clarifies tax treatment of select benefits and perksThe Kenya Revenue Authority's revised PAYE Guide, issued March 1, 2017, clarifies tax treatment of certain perks and benefits including company-provided housing, meals (up to KES 4,000 per month) and the tax exemption for retirement benefits, bonuses, and overtime allowances for low-wage workers (earning under KES 11,180 per month).

Romania to change tax and social security contributions1. Local currency equivalent of 400 euros per year in employer-paid medical service subscriptions for employees and

their dependents are exempt from personal income tax and social security contributions for employees. (since 03.09.2017)

2. Substantial increase in monthly minimum wage in 2018: Increase to RON 1,900/month as of 2018 (currently RON 1,450)

3. Social security contribution and taxation changed• Significant proportion of employer social security contributions shifted to employees, meaning employees’

contributions on pay would increase from 16.5% to 35% of covered pay• Flat personal income tax reduced from 16% to 10%

Russia increased fines for data protection violations (7/2017)

South Africa changes regulations for retirement fundsDefault regulations for retirement funds took effect as of September 1, 2017, requiring that all DC plans include an appropriate and reasonably-priced default investment fund option, a default preservation strategy for employees leaving service with the employer and annuity default strategy. Mandatory annuitization is scheduled to being from March 2018 but the matter is still under advisement, with the target date likely to be pushed back to 2019.

Trends by sub region


14

29,000+ поданных сотрудников

Salary Increase Budgets 2017-2018Central & Eastern Europe

4,9%

3,7%

0%

2%

4%

6%

8%

10%

12%

14%

2017

Average salary increase % 2017 CPI %

5,0%

3,5%

0%

2%

4%

6%

8%

10%

12%

14%

2018


Source: Towers Watson Data Services Global Salary Budget Planning Report Summer 2017


Regional Staff Turnover RatesCEE Region


6

2

8

5

7

6

2

6

4

4

10

6

3

13

10

8

10

8

8

9

8

9

9

5

4

3

Voluntary Involuntary Top Retention / Attraction Drivers

Reasons to Leave§ Base pay / Salary

§ Career advancement opportunities

§ Physical work environment

§ Job security

§ Ability to manage work-related stress

Reasons to Stay§ Base pay / Salary

§ Job security

§ Career advancement opportunities

§ Challenging work

§ Opportunities to learn new skills

Source: 2016 Willis Towers Watson General Industry Survey - HR Policies and Practices Report2017 Willis Towers Watson Global Talent Management & Rewards and Global Workforce Studies

Kazakhstan

Romania

Serbia

Bulgaria

Russia

Czechia

Slovakia

Ukraine

Poland

Hungary

Greece

Slovenia

Croatia

Wellness - CEE

16

39%of employers offer a wellness plan to theiremployees

Although the prevalence of wellness plans stays practically the same across sub-region: 39% in 2016 vs 38% in 2015 we see increases in “Other Wellness Programs “ that are offered and also in Employee Assistance Programs versus earlier years.

Source: Willis Towers Watson 2016 General Industry Surveys

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

Employee Assistance Plans

Other Wellness Programs

Medical Check-Ups

Types of wellness benefits available to employees


6,3%

6,0%

0%

2%4%

6%

8%

10%12%

14%

16%18%

20%

2018


5,2%

5,2%

0%2%4%6%8%

10%12%14%16%18%20%

2017


17

Salary Increase Budgets 2017-2018Middle East



Current challenges in the Middle East


No Coverage

PartialCoverage

Full Coverage

70%

26%

4%

Expat feesin KSA …

Source: Willis Towers Watson Expat Levy Pulse Survey – August 2017

EGP Devaluationin Egypt …

Source: Willis Towers Watson EGP Devaluation Pulse Survey – March 2017

Embargo in Qatar … Tax introductionin the UAE …

Egypt currency devaluation Results from Pulse Survey available now!

2,9 1,9

2017 2018

GDP CPI

4,0 4,8

2017 2018

Salary Increases

3,3 3,6

2017 2018Source: Economist Intelligence Unit – September 2017

Excise tax: 1 October 201750% 100%

Carbonated beverages Tobacco & Energy drinks

VAT: 1 January 2018

Majority of transactions of goods and services5%

• Majority of companies adjusted pay during the period January - April

• 2017 review indicated a typical 16% increase, at Median

Africa Overview: How large is Africa?

19

…Comparison against other countries§ Greater land mass than US, China,

Eastern Europe, much of Western Europe and India COMBINED;

§ Twice the size of Russia;§ Over 1 billion people, speaking over

1,000 languages, with 41% under the age of 15;

§ 42 cities of at least 1m people:§ Mobile phone penetration of 67%;§ 7% of people classified as “middle class”;§ 8% of world’s oil reserves, gold reserves

of $1.5 trillion;§ Average inflation during 2000s was

around 10%, further decrease in 2010-2017;

§ Average gross government debt as a percentage of GDP was 67% in 2000s. During the same period, average budget balances have narrowed.


The true size of Africa

20

29,000+ поданных сотрудников

Salary Increase Budgets 2017-2018Africa

6,2%

10,0%

0%

5%

10%

15%

20%

25%R

epub

lic o

f the

Con

go

Bot

swan

a

Zim

babw

e

Mor

occo

Tuni

sia

Ave

rage

Alg

eria

Sou

th A

frica

Ken

ya

Moz

ambi

que

Ang

ola

Nig

eria

Egy

pt

2017


6,7%

7,8%

0%

5%

10%

15%

20%

25%

Zim

babw

e

Rep

ublic

of t

he C

ongo

Mor

occo

Bot

swan

a

Tuni

sia

Moz

ambi

que

Ave

rage

Alg

eria

Sou

th A

frica

Ken

ya

Ang

ola

Nig

eria

Egy

pt

2018




0,014%0,018%0,024%0,03%0,033%0,037%0,04%0.041%0,063%0,068%

0,102%0,134%

0,173%0,326%

0,714%1,268%

1,563%1,611%

1,763%

TanzaniaGhana

UgandaEthiopia

MozambiqueZambiaMalawi

LesothoNigeria

CameroonDRC

KenyaSenegal

South AfricaPolandRussiaSpain

NetherlandsGermany

R&D Personnel as a % of Labor Force

People Challenges in Africa: Supply

21

Specific Skills Are Hard to Get

Such youthful markets makes experience rare

And if that experience was

abroad…?

Source: Towers Watson analysis of Economist Intelligence Unit and UNESCO data, 2017

Candidates with either know their

value


10

15

20

25

30

35

40

45

50

Average Age

People Challenges in Africa: Demand

22

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

GG7

GG11

GG15

Median Annual Base Salary in USD; Willis Towers Watson Compensation Reports 2017

The value of skills and experience in Africa is

clear

The steepest curves are

seen in Africa and LATAM



Global Labor Markets: How is Africa doing in this world?

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

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Uga

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Mor

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Bos

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outh

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eaS

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Om

anIre

land

Uni

ted

Kin

gdom

Net

herla

nds

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ted

Ara

b E

mira

tes

Fran

ceB

elgi

umFi

nlan

dS

audi

Ara

bia

Sw

eden

New

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land

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elA

ustri

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atar

Ger

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orw

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Sw

itzer

land

Med

ian

Median

Source: 2017 WTW Compensation Surveys

2. Compensation Trends

ZAF: ($15k) CHE: ($89k)

NGA: ($11k)Annual Guaranteed Pay in USD; entry level

EGY: ($5k)

ANG: ($22k)

Our Compensation Analytics Offering


Compensation Analytics service offering


Pay Mix Analysis

Bonus Pool FundingOverall Market Positioning

Quartile Analysis

25

Compensation Analytics service offering


How it fits with WTW’s broader data and consulting offerings

• General Industry & Sector-Specific Surveys

• Executive Surveys

• Bespoke & Club Surveys

• Rewards philosophy• Salary structure design• HR Policies & Procedures• Organisation Structure

Design• Job Evaluation• Compensation Software• Benefits Optimisation• Total Rewards Optimisation• Segmentation approach• Entitlement• Variable Pay Design• Performance Management• Sales effectiveness• Employee engagement

surveys• Employee value proposition• Executive Compensation

NEWCompensation Analytics

• Pay Competitiveness Report

• Pay for Performance Assessment Report

• Cost Optimisation Report

• Pay Increase Trends Report

• Executive Compensation Report

Managing pay across countries

Optimising employment costs

Managing pay increase budgets

Pay for Performance

Attracting and retaining talent

Managing Executive C&B

Managing Blue Collar C&B

How to find us


Contact Details


Léonie WeyGlobal Data Services Leader [email protected]

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See our latest insightswww.willistowerswatson.com/en/insights

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Willis Towers Watson Data Services · Compensation Design module Ø Data Interactive module •...

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