Tag Archives: Developing Markets

Report from Mombasa – Africa Forum 2009

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Warren Heaps – Birches Group LLC

Many of you will already know that last week, the second Africa Forum conference, sponsored by the African Development Bank, Birches Group LLC and ORC Worldwide, was held at the lovely Sarova Whitesands Resort and Spa in Mombasa, Kenya.  The conference was attended by representatives from leading employers in Africa, with delegates from Kenya, Tanzania, Uganda, Sudan, Democratic Republic of Congo and South Africa.  I was lucky to be one of the organizers and presenters at the conference, so I thought I would share some of the proceedings with you.

Keynote Address
The conference opened with a wonderful conversation with Dr. Sipho Moyo, Residential Representative for the AfDB in Tanzania.  Dr. Moyo spoke about what managers look for from HR in terms of support, ideas and insight.

Overview of African Markets
The keynote address was followed by an overview of African markets.  The presentation included statistics capturing the impact of the global economic crisis on Africa, through reduced GDP growth rates across the region, higher inflation (double digit levels in over 25 countries), and reduced trade.  There was also a discussion about the nature of the labour markets in Africa, and the key role leading employers across all sectors, including international public sector organizations, play in the market.  Finally, some summary market data was shared for all countries in Africa, with a special look at Kenya, Mozambique, Malawi and Nigeria.

African Cafe I
The next session was a series of small group discussions.  Three topics were selected by the group – Market Intelligence, Impact of the Global Economic Downturn, and Incentive Pay.  Each topic was featured as a discussion group, and  participants rotated through all three topics, thus having a chance to participate in all of them.  These were lively, interactive discussions, where participants were able to raise issues, share their experiences and learn from the experience of others.

Focus on East Africa
Since the event was held in Kenya, we turned next to an in-depth look at the East African market, focused on Kenya, Tanzania, Uganda, Rwanda and Burundi.  There was comparative data to highlight the similarities and also the unique features of each labour market in the region.

Building a Pan-African Workforce
A lively discussion followed led by Awinja Wameyo of AfDB, about the challenges the bank faces in building a workforce for their operations across 25 countries in Africa.  Topics of particular interest to the group included recruitment of professionals from the African diaspora, and the desire for diversity, and how best to achieve it.

Market Intelligence
Day Two began with an in-depth look at market intelligence, and how the Birches Group surveys are tailored to address many of the challenges faced in small, volatile markets, with such a wide range of practices.  Birches Group staff demonstrated the Indigo survey portal for the group as well.

We also spoke about the comparative framework — how to best determine the right approach to matching positions in the African market to survey benchmarks consistently.

African Cafe II
Next we had another series of discussions on topics chosen by those in attendance at the Forum:  Intra-Regional Assignments, Performance Management and Talent Sourcing.  It was a wonderful chance to share insights and learn from each other.

Untying Knots
Following lunch, we kicked off the final afternoon of the Forum with a stimulating presentation about Performance Management and Pay Design.  Gary McGillicuddy spoke about the Birches Group Community approach to performance management, which uses multi-rater feedback and the answers to three simple questions to manage evaluations effectively and efficiently.  Gary also spoke about the “Wedding Cake” of pay design, demonstrating that in an organization, time-based, competency-based and performance-based compensation systems can coexist to drive overall organizational effectiveness.

Employer Branding
The closing presentation was an overview of employer branding.  Curtis Grund of ORC Worldwide shared his personal experiences as well as a summary of the leading practices in employer branding.  Curtis also looked at some employer website to highlight best practices.

In Summary
The Africa Forum 2009 was a great opportunity for human resources professionals in Africa to discuss critical issues, learn about trends, and most importantly, share information with each other and form what we hope will be an ongoing network for sharing and collaboration.

We expect that Africa Forum will be repeated, next time in Southern Africa.  Stay tuned for more information about next year’s Forum.  We are grateful, also, to the African Development Bank, for lending it’s name and providing resources to make the Forum a reality.

Conference Presentations
If you were unable to attend the Africa Forum, but would like to receive copies of the presentation materials, please let me know by using the Contact Us link.  Just indicate your interest in receiving the Africa Forum materials.

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Talent in Ghana

Imported Photos 00033 Author:
Yendor Felgate –  Emergence Consulting

The traditional wisdom on Africa is that there is a one way passage for talent to more ‘developed markets’. Experience suggests that a continuous ‘brain drain’ is occurring, where talented professionals are being ‘denuded’ from home markets, exacerbating an already tenuous scarce skill situation.

Change is Coming

Recently I hosted a talent management workshop in Ghana, where I am starting to see signs that things may be changing.  This is not say that the ‘war for scarce skills’ does not exist or that the predominant trend has changed, but rather we are seeing a more complex picture emerging.

The change may have started even before the impetus of the global financial services meltdown, if anecdotal evidence from headhunters and resourcing specialists working in Africa are accurate.  Ghana may be a useful case in point to begin to understand the emerging changes in talent behaviour and the resultant complexities for business in Africa.

Recent Trends

Ghana is a democratic West African country that has been independent for over 50 years.  Traditionally the country has been economically reliant on commodities and natural resources, though is diversifying rapidly into financial services and telecoms.  Recent trends suggest an increasing level of foreign direct investment and interest from the region in the opportunities offerred by Ghana.

In the past, global education and career opportunities were valued over local organisations and career paths.  The first change to this dynamic was the rapid expansion of Nigerian banks and the telecom revolution in Ghana. Both sectors are large consumers of talent and ‘overheated’ the local and expatriate skill markets, largely by paying aggressively.

The second major trend is the exciting opportunities for entrepreneurs.  This has attracted interested from first and second generation Ghanians based outside the country.  Initially, this took the form of direct investment, but is increasingly involving Ghanians leaving corporate roles outside Ghana, to take up local opportunties.

The final trend is the global instability in ‘developed’ job markets, where many Ghanians are now looking to return to corporate and professional roles within the country.  The perceived ‘gap’ between global and local has diminshed significantly.

The net result is that many corporates in Ghana are able to compete for talent more effectively than before. I think this is the real change – global players may now not be the automatic default choice for African talent. African business has a window of opportunity they can exploit. However, the complexity lies in the detail.

The challenge is that good people have many opportunities both locally and regionally they can explore in corporates and on the entrepreneurial front. My sense is that this has less to do with money, but the personal connection people make to these opportunities.  In my language, an holistic employee value proposition is more important the ever.

What About Pay Levels?

Ghana Pay Ranges

Total Compensation in Ghana

Pay levels amongst leading employers in Ghana are competitive, but relatively low when compared to more developed countries, and also to many countries in Africa.  As you can see from the illustration, total annual compensation in Cedi ranges from about 5,000 to 20,000 Cedi for support staff positions, while pay for professionals varies from approximately 24,000 to 80,000 Cedi.

Birches Group LLC Survey of Leading Employers – September, 2008

In Summary

The difficulty most Ghanian businesses face is that they are not used to working with the intangible concept of the employee value proposition and tend to want to compete on remuneration, whilst keeping relatively conservative management practices.  This is changing, but I hope it is sufficiently rapid to fully utilise what may be a very narrow period of talent parity.

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Employer Mandated Health Coverage in Dubai

George Bashaw

George Bashaw – Atlas Global Benefits

On January 1st, the Dubai Health Authority (DHA) initiated the first phase of employer mandatory health insurance for expatriates and UAE nationals working in Dubai.  All expats new to Dubai must obtain a Health Benefit Contribution (HBC) compliant insurance policy.


The population of Dubai has exploded from 300,000 to 1.5 million since the Department of Health and Medical Services (DoHMS) was created over thirty years ago.  Considering the growth and significant demographic changes in Dubai, the DoHMS has done an adequate job (World Health Organization ranks the UAE 44th).  Did I say something in “Dubai” is “adequate”?  The two words are mutually exclusive. In Dubai, they simply strive for the best.  Therefore, the DHA was established to accomplish this goal by 2015.  What does this mean for you?

Existing Plans

If you manage an existing health plan in Dubai, it is valid until it expires. Upon renewal during 2009, the new plan must be HBC compliant.  By January 1st 2010, all corporate health plans must be HBC complaint.

Payment and Administration

Who pays the HBC?  The employer pays the tab.  The HBC is a flat-rate for all employees, including UAE nationals and expatriates.  There is another hitch.  All HBC policies must be sold by authorized insurance companies. Since most employers will provide benefits above the notional standard, there is a group of authorized insurance companies waiting to sell you a top-up plan.

Choosing a Clinic

Not so fast.  All employees must choose a primary clinic to complete enrollment.  They can do so by visiting an OCP (Outpatient Care Practice)clinic in person, on the web www.dha.gov.ae, or through their employer.  Want the good news?  The employer may choose a default OCP clinic.

Employer Responsibilities

Just so there is no confusion on the rules, I copied this from the DHA website: 

  1. This is a mandatory system enforced by law – employers must comply
  2. Every employer pays a standard payment (HBC) to the DHA for every employee once a new HBC policy is introduced
  3. System will be enforced through a licensing system
  4. All employees covered by a corporate healthcare scheme by 12/31/08
  5. Employees not currently covered by an existing corporate health scheme must be provided with a HBC compliant scheme from 1/1/09
  6. Everyone covered by HBC compliant corporate healthcare scheme by 12/31/09
  7. Every employer is responsible for enrolling every employee with DHA
  8. This includes contractual responsibilities for dependents
  9. Every employee most register at a clinic before employer enrolls them with the DHA
  10. Employers to help employees register with a clinic

 Still have questions?

You are welcome to visit the DHA but I would rather you just ask me.

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Labour Market Dynamics in Mongolia

Warren Heaps photo

Warren Heaps – Birches Group LLC

This former communist country has undergone a rebirth recently, but still faces economic and and social challenges.  These factors, in turn, have a strong influence on the local labour market practice.


Brief History and Background

Mongolia became an independent country in 1911.  By 1924, however, a Soviet-influenced government was established, and flourished until the early 1990s.  A new, democratic constitution was adopted in 1992, and democratic elections were held in 1993.  Since then, Mongolia has been making the transition to a full market economy.

Over the last several years, Mongolia has enjoyed a robust growth rate, with GDP increases from 7.3% in 2005 to 10.2% in 2007.  Much of this growth has been driven by the mining sector, with large operations focused in cooper, gold and other commodities.  There also has been increasing foreign investment in other sectors, such as software development, telecom and food.

The global economic crisis and collapse of commodity prices has resulted in a slowdown in Mongolia.  GDP growth for 2008 dipped to 8.9%, and the Asian Development Bank predicts a further drop to just 3.0% for 2009.  From January, 2008, to April 30, 2009, the local currency, the Tugrik, has depreciated against the US dollar by about 22%, putting additional pressures on the Mongolian economy, which imports 80% of its oil, and many other basic commodities and raw materials.  Projected inflation for 2009 is about 9.5%.

Overview of the Labour Market

Birches Group recently completed the annual survey of the market in Mongolia.  The information that follows is based on the recently published survey results.

Total compensation levels in Mongolia range from about $7,400 for unskilled support staff positions such as Messengers and Drivers, to $36,000 for Managers and other senior level professionals.


Total Compensation in Mongolia

Let’s focus in on Working Level Professionals, i.e., college graduates with 3 to 5 years of experience in their respective fields, such as Finance, HR, Procurement, Engineering, Sales and Marketing.  In the graph, this group corresponds to the second column in the Professionals category.

For a Working Level Professional in Mongolia, the median total compensation ranges from about $14,000 to $22,000.  However, as the “footprint chart” illustrates below, there is a much wider range of compensation in the market – from around $9,500 to over $30,000.


Market Footprint – Working Level Professional

The footprint chart shows the full range of the market, from the 25th percentile of the minimum or entry level salary to the 75thpercentile of the maximum, as well as the MRP or “market reference point” which illustrates the average rate for incumbents in the job.  By viewing the market with this perspective, employers can gauge not only the market references, but also get a good idea about the span of pay (from min to max) in the market.

What else besides salary?

As is common in developing countries, the typical package in Mongolia for a Working Level Professional includes not only salary, but allowances, incentives and in-kind benefits.  Let’s take a closer look at the market practice for these items.

At the 50th percentile, the average breakdown of total compensation is as follows:

Composition of the Compensation Package


Composition of Compensation Package

The chart above indicates a base salary of $15,926, representing about 84% of total compensation.  The rest is made up of allowances (6.5%), short-term incentives (4.5%) and in-kind benefits (5.2%).  The most common allowances are meal and beverage allowances, and cash allowances such as 13th month, mobile phone allowance and seniority premium.

For in-kind benefits, the chart below shows the categories provided; recreational activities and meals are the most common.


In-kind Benefits

 In Summary

Mongolia is a dynamic market which has experienced good growth in recent years.  While there is much slower growth occuringnow, employers with businesses there still must keep abreast of market changes.  Rich survey data is one of the best ways to ensure that your compensation packages remain competitive, cost efficient, and responsive to your employee’s needs.

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A Glimpse of Pay and Benefits in Africa

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Warren Heaps – Birches Group LLC

Africa is a Diverse Continent

Africa is a vast continent with over 50 countries.  There is much diversity, too, amongst the people, cultures, climate, economies and businesses across the region.  Not surprisingly, there is also tremendous diversity in compensation in Africa — not only the obvious differences in actual amounts of pay, but importantly, a wide range of practices in addition to base salary.

Pay and Benefits in Africa

Birches Group recently examined the total compensation for Working Level Professionals – college graduates with five to eight years of experience and a level of technical expertise in their respective profession.  Typical positions included Accountants, Brand Managers, Bankers, Engineers, Human Resources and other occupations across ten markets in Africa.

Pay Ranges in Africa

Pay Ranges in Africa

The results confirmed the wide range of absolute pay levels – from around $40,000 to over $110,000 per year.

Allowances and In-Kind Benefits Are Important

The salary numbers only tell half the story.  In many developing countries, employers provide allowances and in-kind benefits to local staff.  These benefits include cash allowances such as 13th month and vacation bonus, as well as cash or in-kind payments for transportation, food, housing, recreational activities, and more.

Percent Allowances and In-Kind Benefits

Percent Allowances and In-Kind Benefits

Allowances and in-kind benefits provide from 8% to over 30% of the total package, depending on the country.  Therefore, it’s critical to consider these elements in designing pay packages.  To overlook these “extras” and focus just on base salary would result in a potential gap against the market.

Global Approaches Need Local Tailoring

Global employers take pride in having consistent approaches to compensation around the world.  But in developing countries, local practices and insights need to be fully considered in the broader context of the employer’s compensation strategy.  The best way to ensure your pay package is competitive is to reference a good market survey, that captures all of the elements of compensation in the market, from the leading employers present in the market.

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