Benette Santiago, Business Development Manager Jed Medida, Business Development Associate Birches Group, LLC

Transcription

1 March 26, 2015 Royal Hotel Saigon, Ho Chi Minh City, Vietnam Benette Santiago, Business Development Manager Jed Medida, Business Development Associate Birches Group, LLC

2 Specialized HR consultancy founded in 2005, with HQ in New York, Data Centre in Manila, and two offices in Europe Total compensation surveys in 148 developing markets Multi-sector and specialized NGO-only surveys Two surveys in Vietnam multi-sector and NGO Local Pay Compensation policy and scale design OD consulting (job evaluation, competency models, performance management) Expatriate policy consulting

3 Introduction What is the purpose of compensation? What is the basis for setting compensation? Measuring the market Vietnam A Case Study 3

4 Recruit, Retain, Motivate and EXIT Framework for Resource Management Provides a Career Framework 4

5 The market for comparable jobs Methodology that is simple, easy, and comprehensive Sufficiently attractive to secure talent 5

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7 Companies are always concerned with attracting, retaining and rewarding the best talent To be successful, you must be competitive The only way to understand the competitive market is to refer to high quality, independent market surveys But first, what kind of survey is most suitable for Vietnam?

8 Fewer good employers Talent shortages Periods of economic and social volatility Significant differentials in pay between support & professionals Inconsistent/incomplete Social Security structures Lack of clarity on labour law Challenges of data sourcing 8

9 Sector A Sector B Sector C Sector D Sector E Good talent moves around 9

10 Sector A Sector C Sector E Sector B Sector D Leading Employers The Best The Rest Leading employers have more in common with other leaders, regardless of sector 10

11 Smaller sectors Wide variations in incumbent data Lack of matches Complex array of allowances & in-kind benefit practices Less understanding of reward policies Do conventional survey methods even work?

12 Do not start with a salary survey. Not yet. 12

13 What is your target position in the market? How do you define your market? Where you recruit talent from? Where you lose talent to? Specific sectors or types of organizations? Where do you want to be? Are you a market leader? What is important to the company? Where are you right now? Leading, lagging or spot-on? 13

14 What is the right balance of internal equity and external competitiveness? Will you consider both cash and non-cash remuneration when measuring the market? How will employees be recognized for their performance? What factors should be considered when adjusting your compensation structure? How often? 14

15 Market Composition Market Placement Balancing Dynamics What group of employers is relevant? How large of an employer group? What target percentile is appropriate? Internal: Dynamics of team and priorities of the organization External: Competitiveness against the market 15

16 Captures total compensation Has a profile of relevant comparators Addresses the volatility of data in small developing markets Provides a flexible and adaptable solution 16

17 Base salary Fixed cash allowances Variable cash Benefits in-kind, such as Transportation Housing Food & beverages Recreational activities Subsidized loans Company products Pension and retirement Termination/end of service benefits Health insurance Life insurance Other insured benefits Leave benefits Family benefits And more

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20 Annual Total Gross Compensation (VND) 3,000,000,000 Total Compensation in Vietnam - September, th Percentile 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000, ,000, Birches Group Levels 20

21 Min MRP Max Span 1 124,328, ,311, ,498, % 2 148,747, ,956, ,164, % 3 172,359, ,041, ,900, % 4 234,755, ,769, ,827, % 5 264,341, ,704, ,791, % 6 277,216, ,160, ,104, % 7 417,517, ,345, ,967, % 8 380,863, ,600, ,083, % 9 490,220, ,033, ,546, % ,119, ,991, ,899, % 11 1,310,775,000 1,417,638,089 1,842,926, % 12 1,475,141,220 2,113,379,606 2,751,617, % Average Span 45.8% Pay differentials within (span) and across adjacent grades (inter-grade differential) can be significant Annual Total Gross Compensation (VND) 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000, ,000,000 Total Compensation in Vietnam - September, th Percentile Birches Group Levels Ave Span: 45.8 % 21

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26 100% 90% 80% 70% 60% 50% 40% 30% 52% 48% 20% 14% 10% 5% 0% Bonus Short Term Incentives Actual Food & Beverages Transportation

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29 A Look at the ASEAN Market

30 Annual increases 8.00% 7.00% 6.00% Expected Market Movement and Inflation (Jan. - Jul. 2015) South East Asia SE Asia Average Professional 1.95% Support 1.94% Inflation 4.34% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Vietnam Philippines Brunei Darussalam Myanmar Malaysia Cambodia Lao PDR Thailand Indonesia Professional 3.07% 2.93% 2.32% 2.04% 1.93% 1.70% 1.55% 1.27% 0.76% Support 3.41% 4.45% 0.82% 1.50% 1.44% 0.59% 3.36% 1.10% 0.80% Projected Inflation 5.50% 4.10% 0.00% 6.90% 3.60% 4.00% 5.50% 2.60% 6.90%

31 Comparison of Total Compensation in the ASEAN Market Specialized Service Provider/Technician (BG-06) Brunei Thailand 75th Percentile: $24,269 Malaysia Cambodia Vietnam 50th Percentile: $16,076 Philippines Myanmar Indonesia Laos 25th Percentile: $15,219 Lower Part of Range Minimum to MRP Upper Part of Range MRP to Maximum 8,000 13,000 18,000 23,000 28,000 33,000 38,000 43,000 Annual Total Compensation (equivalent US Dollars)

32 Comparison of Total Compensation in the ASEAN Market Senior Working Level Professional (BG-10) Thailand Malaysia 75th Percentile: $54,464 Philippines Indonesia 50th Percentile: $42,778 Vietnam Laos Cambodia Myanmar 25th Percentile: $38,173 Lower Part of Range Minimum to MRP Upper Part of Range MRP to Maximum 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, ,000 Annual Total Compensation (equivalent US Dollars)

33 Typical "Pay Mix" BG-6 Support Staff Brunei Thailand Malaysia Vietnam Philippines Myanmar Indonesia Cambodia Laos 75% 80% 85% 90% 95% 100% Base Cash Allowance Varible Cash In-Kind Benefits

34 Typical "Pay Mix" BG-10 Working Level Professional Thailand Philippines Malaysia Vietnam Indonesia Cambodia Laos Myanmar 75% 80% 85% 90% 95% 100% Base Cash Allowance Varible Cash In-Kind Benefits

35 BG Office Survey Country

36 Salary and benefits surveys Salary scale design Job evaluation, competencies and performance management solutions using our Community system Consulting on compensation, expatriate management, HR policy and organization design Expatriate allowance data

37 Birches Group: Warren Heaps Partner ) Kaye Avellana Networking Development Manager Michelle Marcelo Senior Compensation Analyst Online: Birches Group website Developing Markets Compensation and Benefits LinkedIn Group International HR Forum 37