www.pwc.nl
The impact of emerging
markets on the compensation
& talent strategies of
organisations
29 November 2013
Agenda
• Update on PwC Milennial Research
• Outlook towards 2014 and beyond
PwC
2
Talent Mobility 2020 – Key Findings
• Emerging markets will create a significant shift in mobility patterns
• There will be 50% growth in assignments by 2020
• More assignees, more travel, more virtual tools, and especially more
quick, short-term tours and commuter arrangements
• Mobility strategies will become more sophisticated and complex but
simpler in design
• The millennial generation (born between 1980 and 2000) will view
international exposure / assignments as a rite of passage
• As companies venture into new territory we will see an increase in
collaboration across businesses and with governments
• Compensation levels across some skill sets and industries will begin
to harmonise across the globe
• Technology and compliance will come together like never before
RES Forum
PwC
29 November 2013
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PwC Research on Milennials: the workplace in
2020
• Born between 1980 and 2000
• 80% wants to work abroad
• 70% expects they need a foreign
language for being succesful in
their career
• 94% Beliefs that they will work
more international than their
parents
• Out of the box reward strategies
• Want to have influence on how
they would like to do their work
• Expect to shift jobs every 2-3
year
• …..
RES Forum
PwC
29 November 2013
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Milennial Research: main conclusions still valid
for mobility trends
What has been confirmed
• IM will grow, less Long Term
Assignments
• Increase of non moving family and or
partners for assignments
• Lower job levels and specialists become
more mobile / are expected to be more
mobile
• New directions and destinations
• More complexe mobility programs and
policies
• Technology becomes more important for
enabling control
• Mobility department has to become
more strategic in adding value
RES Forum
PwC
29 November 2013
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….but slowing down
• Countries introduce strict visa rules for protecting their domestic labor
market
• What do they really want? In times of crisis?
- Nice job
- Fair salary
- Nice work environment
….and that’s it?
• The chanses of being audited for non compliance are currently almost non
existing…however, governments are getting awake….
RES Forum
PwC
29 November 2013
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…but how different are Milennials?
•
Intention of leaving within 12 months is high; but is that different compared
to non millennials at the same age?
•
Millennials are more positieve on their employer (great place to work)
compared to Baby Boomers / Gen X at the same age
•
Opportunities for growth are asessed more positive by Milennials
•
Millennials are more saftisfied on recognition than their age peers in Gen X
and Baby Boom; the same applies on manager satisfaction (having a great
boss)
* Source: kenexa: attitude? What attitude: www.khpi.com
RES Forum
PwC
29 November 2013
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www.pwc.nl
2014 and beyond
Global Mobility trends – facts and figures
24% of CEOs say
talent constraints mean
growth targets won’t be
met in overseas
markets
58% of CEOs see
availability of key skills
as a threat to growth
prospects
78% of CEOs expect
to make changes to
their strategy for
managing talent in the
next 12 months
30%
Only
of CEOs
are ‘very confident’
they will be able to
access the talent they
need in next 3 years
RES Forum
PwC
18%
Only
of CEOs feel
they receive
comprehensive data on
the return on investment
in human capital spend
29 November 2013
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Source: PwC 16th Annual Global CEO Survey, 2013
How the world is changing
Short-term
assignments
Commuters
Remote
working
Global
nomads
Substance /
PE challenges
RES Forum
PwC
Multi-state
commuters
29 November 2013
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Market context
How talent mobility is evolving
Old state (1990 – c. 2010)
•
Increasing diversity in expatriate destinations,
driven by globalisation and offshoring
•
Flow of talent predominantly West to East
•
Formal assignments remain the norm but
variations (Commuter, Rotational) emerge
New state (2020)
•
Global mobility continues to grow in volume
•
Mobility of talent is fluid. Companies need to match
the right employee with global business needs and
global and regional talent programmes
•
Traditional assignment policies and frameworks
adapt to these changes – now includes business
travellers, ‘talent swaps’, ‘expat lite’, strong mobility
‘career deal’
RES Forum
PwC
29 November 2013
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Mobile population is increasing
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PwC
29 November 2013
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Returning home with new acquired knowledge
and competences
• We are seeing increasing numbers of employees returning home with
their new-found skills and experience to exploit emerging
opportunities in their countries of origin
• These returning nationals typically command better remuneration
than their local counterparts
• HR professionals need to be prepared to manage the career and
remuneration expectations of these East-West-East pioneers
RES Forum
PwC
29 November 2013
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Shift in mobility patterns and drivers
• The growing importance of new
markets will create a significant
shift in mobility patterns and an
ever greater pressure on recruiting
and retaining the best talent
• Mobility strategies will become
more sophisticated and complex but
simpler in design
• Demand for qualified/talented
people will be high… and the needs
of the employee population will be
highly differentiated across three
generations of employees
RES Forum
PwC
29 November 2013
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New mobility directions require new mobility
strategies
• A host country approach works well in case of a move from a developing
jurisdiction to a more developed jurisdiction; the other way around is
difficult.
• A home country approach with extreme differences between home and host
country compensation does not work.
• Intra regional compensation and benefits is levelling within Europe; the
same is expected for Asia. This encourages host country package strategies.
• The importance of country benefits will reduce (especially pension), and will
open up opportunities for a host country approach.
• The importance of home country benefits is less significant for developing
countries.
• Why should an employee / assignee return to their home developing home
country?
RES Forum
PwC
29 November 2013
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Compensation in developing countries is different
Retention / Staff Turnover
Cash is king, non financial benefits
start becoming more important
Differences on country basis are
significant
RES Forum
PwC
29 November 2013
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Compensation in developing countries is different
Shares have high value for
attracting and retaining senior
employees in BRICS
Regional differences
Source : AON 2010
Source: Making executive pay work, PwC 2012
RES Forum
PwC
29 November 2013
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Increased harmonisation between business and
government is on the horizon
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PwC
29 November 2013
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Collaboration of business and governments
• An increase in collaboration across businesses and with governments
to co-invest in sustainable initiatives for the region from which both
assignees and the local population can benefit.
But for now, the reality is different:
• Rules for visa in developed countries are linked to quota for
recruiting / training local staff.
• Visa rules are used for protecting the local labor market in both
developed and developing markets.
• Developing countries realise they host foreign workers with relatively
high salaries and want to collect the best share of taxes.
RES Forum
PwC
29 November 2013
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Businesses should plan ahead to tackle challenges
such as visa roadblocks and tax treaty issues
• These will gain in importance on the global stage.
• PwC doesn't expect taxes to become globalised through a global tax
treaty any time too soon but do see a trend towards tax clearance
requirements.
• But we believe that tax authorities will gain more consistency about
the definition of what constitutes a day of presence and what type of
activity determines taxable presence — along with having
sophisticated tax collection enforcement mechanisms in place.
RES Forum
PwC
29 November 2013
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Companies will have primary responsibility for
reporting on where their employees have been and
the wage allocations associated with their
whereabouts
• GPS tracking, which may be an accepted norm within the next five to
seven years, is just one component of the tracking process
• Employees, companies, and vendors will supplement positional data
with other data points to allow for conversion into meaningful wage
sourcing data
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PwC
29 November 2013
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Your strategy your future
Bridging the gap to 2020
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PwC
29 November 2013
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Your strategy your future
Is your workforce sourcing strategy (including mobility
strategy) fit for the future?
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PwC
29 November 2013
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Do you have an employee engagement strategy that suits a
new world? How do you engage to retain key talent? How do
you accommodate regional / cultural differences?
RES Forum
PwC
29 November 2013
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Questions?
Henk Zeilstra
Henk.zeilstra@nl.pwc.com
More information:
http://www.pwc.com/gx/en/hr-managementservices/publications/making-executive-pay-work-the-psychology-ofincentives.jhtml
http://www.pwc.com/gx/en/managing-tomorrows-people/future-ofwork/global-mobility-map.jhtml
RES Forum
PwC
29 November 2013
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