Tag Archives: emerging markets

Africa Compensation and Benefits Event – Feb 7th

Author:
Warren Heaps – Birches Group LLC

Are you interested in Compensation and Benefits in Africa?  If you are nearby to Johannesburg, you should plan to attend the Employer Roundtable sponsored by Birches Group, Emergence Growth and Aon Hewitt on February 7, 2013.

The event will be held at Aon Hewitt South Africa offices in Sandton.  You must register in order to attend.  Click here for more information and to reserve your seat.

I look forward to meeting you!

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Two Surveys Are Better Than One

Author:
Warren Heaps – Birches Group LLC

If you work in international HR, you know how important market data is for the management of your international operations.  Finding reliable data in all of your countries is undoubtedly a challenge.  Each country has different survey suppliers, different employers participating in the surveys, and variable levels of quality.  So naturally, when you find a survey you trust, the tendency is to stick with it.  But is one survey enough?  I don’t think so.

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Maxi-Devaluation in Malawi – HR Response

Author:
Warren Heaps – Birches Group LLC

One of the most challenging situations that compensation professionals face is how to respond to unexpected or unusual external events such as maxi-devaluation, civil unrest, or natural disasters.

Flag of Malawi

On Monday May 7, the new government of Malawi agreed to the demands of the IMF and other donors, and floated the Kwacha, resulting in a 47% devaluation versus the US dollar. The new exchange rate, 246.26 Kwacha per US Dollar as of May 13, is fairly close to the parallel rate that has been in effect for the last several months, so in many ways, this move just makes official a rate that has been operational already in many parts of the economy. Continue reading

Salary Survey Insanity in Small Markets – Are You Looking for the Wrong Data?

Author:
Warren Heaps – Birches Group LLC

Benchmarking compensation in smaller countries is challenging.  The usual approaches often do not work well, mostly because the market is small!  If the country is developing (most small ones are), then economic and social instability and immature labor market conditions contribute to the problem, too.

Some of the most common problems expressed by our clients include:

  • Not enough employers in my sector
  • Insufficient job matches for my company
  • Volatile results from year to year
  • Gaps in coverage, with a lack of information for specific levels

There are lots more, but you get the idea.

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Birches Group, Aon Hewitt, Announce Partnership

Author:
Warren Heaps – Birches Group LLC

I am delighted to announce today an exciting new partnership between Aon Hewitt and Birches Group.  Under the partnership, Aon Hewitt will make Birches Group surveys in developing country markets available to their clients, expanding their survey coverage to over 170 countries globally.

The two firms will also collaborate closely on consulting projects and promotional activities.

Here is a link to the full Press Release.

Impact of Devaluation on Local Pay


Author:
Warren Heaps – Birches Group LLC

Recently, a client posed the following question to me:

“The Ethiopian Birr has devalued recently and management wants to offer an across-the-board increase to our staff there.  Can you offer any guidance?”

The first thing I asked my client was if she was referring to expats or local staff. She confirmed local staff, not expats.  So, I told her if that’s the case, you might want to reconsider such a step.  Why?

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Africa Compensation Update – 2010


Author:
Warren Heaps – Birches Group LLC

Back in April of 2009, I published a post entitled “A Glimpse of Pay and Benefits in Africa.”  A few weeks ago, I had the pleasure to speak at an International Compensation and Benefits meeting in Houston, Texas, hosted by the National Foreign Trade Council, where my topic was also focused on Africa in general, and some information about pay practices there.  I thought it would be nice to share some highlights here.

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E-Learning in Africa (and the rest of the world!) Part 2


Authors:
Han van der Pool – TNT N.V.
Lex Lindeman – HRBoosters

Introduction
In part one of this two-part post, we discussed e-learning in Africa, and especially the hurdles of implementation.  In this second part, we will delve more into practical advice for successful implementations in Africa, or anywhere else in the world!

In a broad sense, e-learning can be defined as “any form of learning that makes use of a network for distribution, interaction and facilitation.” There are plenty of demonstrable success stories and breathtaking ROIs.  However, the other side of the coin is that in many cases, web-based investments turn out to be fiascoes and only lead to a waste of time.

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HR in Afghanistan – A Personal Story

The Author in her tent


Guest Author:
Yolanda Adrian

Why would anyone volunteer to live in a tent and sleep on a cot?  Well I did.  I had the opportunity to work in Afghanistan for three months from November 2009 through January 2010. The company I work for is a defense contractor and we won a contract in Afghanistan; I volunteered to help with the phase-in of the program.

My assignment was to assist with the hiring of the incumbent workers employed by the current supplier as employees of my company.  While this might seem like a simple task, there were many challenges – not knowing who the employees are, not being able to contact the employees at the work site during working hours, and the many different locations involved.

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The Challenge of International Market Pricing

 


Author:
Chuck Csizmar – CMC Compensation Group

“What is the competitive market price for a particular position?”

It’s a simple question.  If you work in Compensation, this is what you do.  And if you’re in the US, the survey sources you can call upon are numerous and well-stocked with participating companies and benchmark matches – the blessings of a large country.  In fact, it is a common practice to segment the data (report separately) on the basis of industry, revenue size, or geographic region.  In some instances you can further refine your analysis by operating budget, staff size or even years of experience.

For those accustomed to such robust analysis it can be a real wake-up call when asked to conduct a similar analysis for operations in another country.  Suddenly your content-rich environment has disappeared, and in its place you find that the availability of good information can no longer be taken for granted.  Now what do you do?

Your large country database is gone.  Instead, you face a limited selection of survey sources and each offers only a fraction of your normal participant count – a far cry from business as usual.

Such is the key challenge when pricing international jobs – the limited number of companies included in surveys, even by the major vendors.  For example, Mercer Netherlands has 81 participating companies.  So it is not unusual for a market pricing analysis to include only 4 – 5 “matches” – but is that representative of common practice?

If you’re the one on the asking end of the original question, let me share the challenges your analyst is likely to encounter.

Impact of Reduced Participation

  • Limited industry segmentation:  Reported data will likely cover multiple industries, with limited or no segmentation.  If you’re in either a high or low paying industry, surveys will provide inflated or discounted  information.
  • Hard to segment by revenue size:  To the extent that larger companies pay more than smaller you lose that distinction as well.  This can be especially problematic if you’re a small company.
  • Global responsibilities vs. strictly national:  The distinction is often blurred between national, regional and global responsibilities.
  • Combination jobs not well represented:  You will find yourself matching against jobs “close to” your own, just to gain a “feel” for pay levels.  If your job content varies from benchmark descriptions, reported data might not capture such idiosyncrasies.
  • Poor matches and / or no data when less than 5 respondents:  Surveys tend to provide an “n/a” when they do not have enough participants.  When you start with limited companies it’s not unusual to find unreported jobs.
  • Forget Regional variations:  While it is often the case that certain geographic regions have higher pay levels, the reported data is usually national.  You may assume that participants are in the higher paid region, at your risk.

What to do?

Frustrating, isn’t it?  You can’t very well throw your hands into the air, complain about poor survey quality and move on to something else.  The limitations are there and you have to play with the cards you’ve been dealt. Management is waiting, wondering what is taking you so long.

Working with limited resources is a test.  Your challenge is to balance an understanding of the subject position, the industry and the vagaries of limited data points in order to determine which figure best represents your position’s competitive value.

To succeed you must utilize subjectivity and your professional judgment to consider the available data and gauge which figures best reflect the job under review.  The correct answer will no longer jump off the page at you.  Compensation has become an art, not a science.

  • To improve your matching, consider either the 25th or the 75th percentiles instead of the median or 50th percentile to reflect your position: this can be effective with poor matches, or concerns that the reported job is either larger or smaller than your own.
  • You may have to add or subtract from a benchmark job to gain a more appropriate figure for your position.  For example, if your job is a VP but the survey matches stop at the Director level (or converse), you may have to adjust up or down to create a better “guesstimate.”  Note: in such a case don’t forget that the incentive percentages will likely differ as well.
  • There is no formula in making adjustments, but changes in organizational level are usually around 15% – 20%.  Within-level description changes are usually around 5% – 15%.
  • If dealing with only a few positions you might have greater success by individually pricing jobs through a vendor’s database of multiple surveys, government sources and local surveys.  Vendors like ORC, Birches Group and a few others offer this select service.
  • Be careful of the arithmetic exercise (averaging averages, inappropriate matches, assuming numbers, etc.) that delivers a figure you cannot validate later.  Caution: a number is remembered, while often the qualifiers that follow are forgotten.  Make sure that you document such concerns before providing specific data.

All this subjectivity means that your judgment might suffer from more skepticism, even criticism, as you cannot simply point to a survey page and say, “there it is.”

Does all this subjectivity ruin the value of your analysis?  Not at all, as long as you inform management about how limited survey resources have impacted your analysis.  They expect an answer to their question (market value?) and you need do the best that you can with the resources you have available.

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