GLOBAL MOBILITY TRENDS IN ASIA - imercer · GLOBAL MOBILITY TRENDS IN ASIA March 2017 Mario Ferraro...
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H E A L T H W E A L T H C A R E E R
G L O B A L M O B I L I T Y T R E N D S I N A S I A
March 2017
Mario Ferraro Global Mobility Practice Leader Asia , Middle East, Africa & Turkey Mercer
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I N T R O D U C T I O N
Mario Ferraro Regional Practice Leader, Global Mobility Asia, Middle East, Africa & Turkey Mercer
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S T R A T E G I E S F O R F I L L I N G T A L E N T G A P I N A S I A
Source: Future of Jobs Report, World Economic Forum
ASEAN India China Japan UK France Germany
Support mobility and job rotation 54% 48% 36% 34% 38% 25% 30%
Attract foreign talent 46% 12% 11% 23% 17% 25% 30%
Invest in reskilling current employees 31% 48% 48% 54% 48% 33% 56%
Hire more short-term workers 31% --- --- 9% 5% --- ---
Collaborate with educational institutions 23% 28% 18% --- 17% 25% 22%
Target female talent 15% --- 20% 23% 36% 25% 19%
Target minorities’ talent 8% 12% --- --- 12% --- 19%
Collaborate, other companies in same industry 8% --- --- 11% --- 8% 15%
Collaborate, companies across industries --- 8% 11% 14% --- 33% ---
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A D O P T I N G A L T E R N A T I V E A P P R O A C H E S T O F I L L T A L E N T G A P
Source: Alternative International Assignments Policies and Practices Survey (AIA)
(N = 301)
SHORT-TERM LONG-TERM PERMANENT TALENT DEVELOPMENT
INTRA REGIONAL
COMMUTERS
89% 76% 59% 50% 46% 88% 31%
GLOBAL NOMADS
(N = 55)
86% 67% 51% 46% 36% 82% 33%
A P A C
A L L R E S P O N D E N T S
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China
Hong Kong
India
Indonesia
Malaysia
Philippines
Thailand
-7%
0%
-57%
-57%
-49%
-41%
-46%
Source: Mercer Total Remuneration Survey (2016)
Vietnam -54%
T A R G E T B A S E C O M P E N S A T I O N F O R F U N C T I O N H E A D A P A C S A L A R Y D I F F E R E N T I A L S
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37%
57%
9%
6%
ALL RESPONDENTS
(N=109)
18%
55%
66%
29%
47%
50% APAC N = 38
E S T A B L I S H I N G T H E B A S E S A L A R Y F O R F O R E I G N E R S O N A L O C A L P L U S A P P R O A C H
According to the local pay structure only (without
adjustment)
According to the local pay structure with
premium/adjustment
Case by case
Primarily through local HR/Management guidance
Direct conversion of home salary to host currency using latest
exchange rate
Depends on assignment type 3% 29%
Source: Mercer 2016 Local-plus and Location Specific Survey
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C O M M O N P A Y A P P R O A C H E S I N C H I N A
6%
25%
29%
45%
71%
21%
Local policy - (Local salary + Local benefits)
Local plus policy - (Local salary + Premium benefits)
Local plus policy - (Premium salary + Premium benefits)
Locally Hired Foreigner
Locally Hired Returnee
* Other approaches include global policy, intra-regional policy and local plus policy (Premium salary + Local benefits)
Source: 2016 Mercer TRS for LHF/Returnee
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S T A Y T U N E D …
China
Taiwan
Hong Kong
Singapore
Middle East
South Africa
Turkey
India
Mercer Mobility Forums Asia, Middle East, Africa &
Turkey
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9 © MERCER 2017
AP P E NDI X : ADDI T I O NAL I NS I G HTS
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REGIONAL OVERVIEW
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W H A T I S A S I A ? - G E O G R A P H I C D E F I N I T I O N
• World’s largest and most populous continent
• 48 UN member states (+6 non UN states)
Region Population (2017) % Yearly Change Net Change Area (Km²) Fert. Rate Med. Age Asia 4,478,315,164 59.60% 0.95% 42,090,691 31,034,755 2.2 30 Africa 1,246,504,865 16.60% 2.50% 30,375,050 29,678,687 4.71 19 Europe 739,207,742 9.80% 0.05% 358,740 22,131,968 1.6 42 Latin America and the Caribbean 647,565,336 8.60% 1.02% 6,536,030 20,110,725 2.15 29 Northern America 363,224,006 4.80% 0.75% 2,694,682 18,626,872 1.86 38 Oceania 40,467,040 0.5 1.42% 565,685 8,430,633 2.42 33
Source: Worldometer
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W H A T I S A S I A ? – B U S I N E S S D E F I N I T I O N
… However, many organizations have a different definition of “Asia”
EMEA ASIA
APAC
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A S I A A S A N E C O N O M Y H A S T R E M E N D O U S P O T E N T I A L B E C A U S E …
ASIA
By 2050, Asia will account for 45% of the
world population From 2000 – 2010, incomes rose on average by 96% Rapid emergence of a new Middle-Class of consumers
The region has been resilient through the global financial crisis and has experienced consistent average annual
GDP growth rates between 5% to 8%
This will add 1 billion new consumers and a total purchasing power in excess of $10 trillion
Asia will house one of the youngest and largest
workforces, numbering around 3 billion and representing 52% of the global workforce
9 of the 10 fastest growing mega-cities in the world are in Asia
The ASEAN Economic Community (AEC)
launched in 2015
Source: Forbes 2014
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A S E A N ( A S S O C I A T I O N O F S O U T H - E A S T A S I A N N A T I O N S )
Core idea Free movement of goods, services, investment, labor and freer flow of capital.
• Facilitate movement of skilled and professional labor in cross border trade • Enhance movement of students • Harmonize qualifications
A S E A N E C O N O M I C C O M M U N I T Y ( A E C ) W H A T W I L L B E T H E I M P A C T ?
14Million Additional jobs in ASEAN by
2025:
Source: International Labour Organization (ILO) and Asian Development Bank (ADB). 2014. ASEAN Community 2015: Managing Integration for Better Jobs and Shared Prosperity.
IF ASEAN WERE A COUNTRY
GROWTH by job families • Sales and Related • Management • Business, Legal and Financial
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A H I G H L Y D I V E R S E R E G I O N
Cost of Living: Hong Kong = 2nd
• Kolkata, India =194th
Quality of Living: Singapore = 26th • Dhaka, Bangladesh = 211th
• Yangon, Myanmar – 201st
Income Tax: Japan = 55.95% China = 45%
• Brunei = 0%
• Mongolia = 10%
• Macau = 12%
• Hong Kong = 15%
• Inflation ranging from 1% to 30% • 80 Languages • Intense competition for talent, leading to wage inflation
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C H I N A H I G H L I G H T S – O V E R S E A S E X P A N S I O N “One Belt and One Road” • Launched in September and October 2013 by Chinese leader
Xi Jinping.
• The Silk Road Economic Belt and the 21st-century Maritime Silk Road, also known as One Belt, One Road.
• A development strategy and framework aimed at connectivity and cooperation between China and the rest of Eurasia, consisting of two main components:
Land-based "Silk Road Economic Belt" (SREB)
"Maritime Silk Road" (MSR).
• The strategy underlines China's push to take a bigger role in global affairs, and its need for meet market demands in many areas, primarily steel manufacturing.
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C H I N A H I G H L I G H T S – C O M P E T I T I O N F O R T A L E N T
Beijing facilitates permanent residence of foreign talent Beijing Public Security Bureau, implemented 20 new immigration policies have been implemented starting March 1, 2016. High-level foreign talent will enjoy a simpler application process for visas, immigration and permanent residence in Beijing.
The “Thousand Talents Program” This is a talent recruitment program established by the Government of China in 2008, to attract high level technical experts and scientists to work in China. Preferential policies and treatments include: • Enabling working conditions; • Special living benefits: high pay and visa
privileges
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“Criteria for the identification of foreign high-level talents in Beijing ”
On April 25th 2016, Beijing issued an Article announcing a strategic Talent Management initiative, which has been a great success in attracting overseas high level talent.
18 © MERCER 2017
KE Y T RE NDS I N E X PATRI ATE CO MP E NS ATI O N
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I N C E N T I V E A L L O W A N C E
DO YOU PAY AN INCENTIVE PREMIUM TO YOUR TYPICAL LONG-TERM ASSIGNEES?
63%
75%
32%
22%
5%
3%
WORLDWIDE
ASIA-PACIFIC
Ongoing Lump-sum Other
WHAT TYPE OF INCENTIVE PREMIUM DO YOU PROVIDE?
57%
43%
67%
33%
No
YesAsia-Pacific
Source: 2015 Worldwide International Assignment policies & Practices Survey
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H O U S I N G DO YOU REQUIRE A CONTRIBUTION FROM THE ASSIGNEE TO HOUSING COSTS (DEDUCT A HOME HOUSING NORM)?
40%
61%
Yes
No, we offer free housing
ON WHICH EMPLOYEE VARIABLES IS THE HOST HOUSING ALLOWANCE /BUDGET BASED?
3%
3%
23%
24%
46%
Other
It is a fixed amount (same for all assignees)
Family size
Income/position level
Family size and income/position level
Source: 2015 Worldwide International Assignment policies & Practices Survey
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T R A N S P O R T A T I O N
49%
25%
15%
13%
9%
8%
6%
0%20%40%60%W O R L D W I D E ( N = 8 0 7 )
47%
31%
11%
7%
13%
9%
5%
0% 20% 40% 60%AS I A- PAC I F I C ( N = 1 6 6 )
I T D E P E N D S O N T H E H O S T -C O U N T R Y C A R P O L I C Y
I T D E P E N D S O N T H E P O S I T I O N L E V E L O F T H E E M P L O Y E E
Y E S , T O AL L AS S I G N E E S
I T D E P E N D S O N T H E H O M E -C O U N T R Y C A R P O L I C Y
O T H E R
C A S E B Y C AS E
N O
DO YOU PROVIDE A COMPANY CAR BENEFIT/ALLOWANCE TO YOUR ASSIGNEES?
Source: 2015 Worldwide International Assignment policies & Practices Survey
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S P O U S E S U P P O R T
47%
37%
9%
5%
2%
0%10%20%30%40%50%60%
W O R L D W I D E ( N = 7 7 3 )
64%
23%
8%
3%
3%
0% 10% 20% 30% 40% 50% 60%
APAC ( N = 1 5 7 )
W E D O N ’ T H A V E A P O L I C Y N O R D O W E S U P P O R T T H E
I S S U E
W E H AV E A C O R P O R A T E P O L I C Y T H AT P R O V I D E S
G U I D E L I N E S
W E D O N O T H A V E A P O L I C Y AN D H A N D L E I S S U E S C AS E
B Y C A S E
O T H E R
W E D O N O T H A V E A P O L I C Y , B U T AR E D E V E L O P I N G O R
P L A N N I N G T O D E V E L O P O N E
DO YOU HAVE A WRITTEN POLICY ON SPOUSE/PARTNER SUPPORT FOR YOUR TYPICAL LONG-TERM ASSIGNEES?
Source: 2015 Worldwide International Assignment policies & Practices Survey
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L O C A T I O N A L L O W A N C E ( H A R D S H I P )
DO YOU PROVIDE HARDSHIP PREMIUM WHEN APPLICABLE?
58%
12%
30%
Yes No Not applicable
DO YOU CAP OR LIMIT THE AMOUNT PAID AS A HARDSHIP PREMIUM?
22%
78%
Yes
Source: 2015 Worldwide International Assignment policies & Practices Survey
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LOCAL-PLUS TRENDS
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R I S E I N L O C A L - P L U S P R A C T I C E S , B U T …
Location Ease of Localization Location Ease of Localization
Hong Kong Jakarta
Singapore China – 2nd and 3rd tier locations
Japan India
Korea Vietnam
Shanghai, Beijing Myanmar
Kuala Lumpur Brunei
Bangkok Cambodia
Manila Laos
Ease of localization is also highly dependent on home-host country combination
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I N W H I C H C O U N T R I E S D O Y O U H A V E T H E H I G H E S T N U M B E R O F A S S I G N E E S O N A L O C A L O R L O C A L P L U S A P P R O A C H ?
Source: 2016 Local Plus and Location-Specific policies and practices survey
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46%
35%
16%
30%
32%
32%
44%
37%
37%
37%
29%
35%
APAC
2016 (N=37)
2013 (N=52)
T Y P I C A L C A S E S W H E R E A L O C A L P L U S A P P R O A C H I S U S E D – C O M P A R I S O N A G A I N S T 2 0 1 3
F O R P E R M A N E N T / O N E W AY ( O P E N - E N D E D ) T R AN S F E R S
F O R I N T E R N A T I O N A L L Y H I R E D F O R E I G N E R S
AF T E R A M AX I M U M D U R AT I O N O N AN E X P AT R I A T E P A C K A G E ( L O C A L I Z A T I O N )
I N C E R T AI N AS S I G N M E N T L O C AT I O N S
F O R L O C A L L Y H I R E D F O R E I G N E R S
F O R C E R T AI N P O S I T I O N L E V E L S
Source: 2016 Local Plus and Location-Specific policies and practices survey
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W H A T I S T H E “ P L U S ” I N “ L O C A L - P L U S ” ?
T AX F I L I N G AS S I S T A N C E
H O S T H O U S I N G
C H I L D R E N E D U C A T I O N
T AX B R I E F I N G AS S I S T A N C E
M E D I C A L B E N E F I T
H O M E L E AV E
7 3 %
7 0 %
6 8 %
6 4 %
5 5 %
5 1 %
5 8 %
7 9 %
6 3 %
3 7 %
6 3 %
5 8 %
Source: 2016 Local Plus and Location-Specific policies and practices survey
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O N G O I N G V S . O N E - T I M E A L L O W A N C E / A S S I S T A N C E – A L L R E S P O N D E N T S R E S U L T S
O N E - T I M E O N G O I N G
H o s t H o u s i n g 8 4 %
H o m e L e a v e 7 2 %
T a x F i l i n g 4 2 %
T a x B r i e f i n g 7 3 %
M e d i c a l B e n e f i t 9 1 %
E d u c a t i o n 8 7 %
T a x F i l i n g 4 6 %
+ R E L O C A T I O N I T E M S
Source: 2016 Local Plus and Location-Specific policies and practices survey
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W H A T I S T H E “ L O C A L ” I N “ L O C A L - P L U S ” ? China (N=427)
Comp 1
Comp2
Staff (276) -44% -32%
Prof (76) -14% 5%
Mgmt (64) -12% 2%
TopMgmt(11) -26% -11%
India (N=1262)
Comp 1 Comp 2
Staff (225) -42% -27%
Prof (406) -14% -9%
Mgmt (578) -53% -55%
TopMgmt(53) -45% -33%
Malaysia (N=446)
Comp1 Comp2
Staff (275) -36% -29% Prof (107) -29% -30% Mgmt (49) -25% -21%
TopMgmt(15) -50% -34%
Thailand (N=28)
Comp 1 Comp 2
Staff (2) -- --
Prof (8) 32% 59%
Mgmt (14) 0% 26%
TopMgmt (4) -- --
Indonesia (N=46)
Comp 1 Comp 2
Staff (4) -- --
Prof (16) 14% 42%
Mgmt (25) -1% 6%
TopMgmt(1) -- --
Australia (N=163)
Comp1 Comp 2
Staff (1) -- --
Prof (34) 90% 150%
Mgmt (85) 28% 49%
TopMgmt(43) -22% -16%
USA (N=74)
Comp1 Comp2
Staff (0) -- --
Prof (14) 116% 147%
Mgmt (39) 33% 54%
TopMgmt(21) -37% -26%
Philippines (N=271)
Comp 1
Comp 2
Staff (132) -22% -10%
Prof (89) -41% -34%
Mgmt (39) -19% 13%
TopMgmt(11) -48% -37%
AS
IA
AS
EA
N
OTH
ER
Hiring Country
Singapore
Comp1 = Base Salary Comp 2 = Base Salary + Allowances
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C O M M O N P A Y A P P R O A C H E S I N C H I N A
6%
25%
29%
45%
71%
21%
Local policy - (Local salary + Local benefits)
Local plus policy - (Local salary + Premium benefits)
Local plus policy - (Premium salary + Premium benefits)
Locally Hired Foreigner
Locally Hired Returnee
* Other approaches include global policy, intra-regional policy and local plus policy (Premium salary + Local benefits)
Source: 2016 Mercer TRS for LHF/Returnee
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8,360 20,635 44,986
123,926
7,895 22,832 56,528
151,644
0
50,000
100,000
150,000
200,000
Para-professional Professional Management Executive
MY Annual Base Salary
Local Foreigners on Local Plus
25,666 54,047 103,425
237,297
26,057 56,706
111,507
265,679
0
100,000
200,000
300,000
Para-professional Professional Management Executive
SG Annual Base Salary
Local Foreigners on Local Plus
L O C A L P L U S A N A L Y S I S C O M P A R I S O N O F B A S E S A L A R I E S F O R L O C A L V S L O C A L P L U S A C R O S S J O B L E V E L S
(USD)
27,591 58,067
111,063
254,651
63,164 115,970
251,365
0
100,000
200,000
300,000
Para-professional Professional Management Executive
HK Annual Base Salary
Local Foreigners on Local Plus
*Based on regressed data
(USD) (USD)
LE
GE
ND
Little or no difference between Local and Local+ Local+ significantly higher than Local Local+ is lower than Local
Singapore: Overall the difference in salary ranges between 1%-8%. For Executive group it is about 12%.
Malaysia: Foreigners on Local Plus are generally paid significantly higher amounts of Annual Base Salary as compared to Local
employees (10% to 25% higher). The exception is para-professional level, where the salary is about 5 % lower for the foreigners.
Hong Kong: Overall the difference in salary ranges between 4%-9%.
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L O C A L P L U S A N A L Y S I S C O M P A R I S O N O F S A L A R I E S + A L L O W A N C E S F O R L O C A L V S L O C A L P L U S A C R O S S J O B L E V E L S
9,421 23,916 53,337
151,778
9,921 29,141 73,049
198,860
050,000
100,000150,000200,000
MY Annual Total Cash Comp
Local Foreigners on Local Plus
29,072 63,287 124,481
296,697
32,202 74,749 154,987
397,698
0100,000200,000300,000400,000
SG Annual Total Cash Comp
Local Foreigners on Local Plus
30,170 66,631
132,624
321,383
86,057
167,329
392,498
0
100,000
200,000
300,000
400,000
Para-professional Professional Management Executive
HK Annual Total Cash Comp
Local Foreigners on Local Plus
*Based on regressed data
Source: Mercer Total Remuneration Survey (2016)
(USD)
(USD)
(USD)
LE
GE
ND
Little or no difference between Local and Local+ Local+ significantly higher than Local Local+ is lower than Local
Singapore: When allowances are added, the overall difference is 11%-25%. For Executive group it is higher, and is recorded at 34%. Malaysia: Foreigners on Local Plus are paid significantly higher as compared to Local employees (22% to 37% higher). The exception is para-professional level, where the compensation is only about 5
% higher for the foreigners. Hong Kong: Overall the difference between the compensation for local employees and foreigners on local plus packages is 22-29%.
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76%
9%
9%
4%
ALL RESPONDENTS
(N=110)
58%
18%
13%
5%
APAC N = 38
Per local country
Depends on location
Best of home and host locations
It depends on the assignment type
Case by case 3% 5%
H O W D O Y O U H A N D L E S T A T U T O R Y B E N E F I T S ?
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B E N E F I T S P R O V I D E D T O A S S I G N E E S O N L O C A L P L U S A P P R O A C H
9%
16%
26%
37%
2%
3%
3%
44%
34%
38%
32%
45%
38%
60%
45%
ALL RESPONDENTS(N=110)
APAC (N=38)
ALL RESPONDENTS(N=110)
APAC (N=38)
ALL RESPONDENTS(N=109)
APAC (N=37)
ALL RESPONDENTS(N=110)
APAC (N=38)
NO PLAN FOR LOCAL PLUS ENROLLED IN THE LOCAL PLAN
P E N S I O N P L A N
S AV I N G S P L AN
H E A L T H I N S U R A N C E
D E AT H A N D D I S A B I L I T Y
B E N E F I T