HEALTH WEALTH CAREER

INSIGHTS FROM CURRENT

ASIAN LABOUR MARKET
TRENDS

Kulapalee Tobing, Principal

Career Products Leader

CONFIDENTIAL
The content of this material is intellectual property of Talentnet-Mercer and is intended to be
sent to participants of Talentnet-Mercer's Total Remuneration Survey only. Distribution of this
material in any form without written consent from Talentnet-Mercer is strictly prohibited.
AGENDA

1. Global & Regional Outlook

2. Workforce Demographics & Talent Trends
• Human Capital Index and Talent Shortages
• Attrition & Hiring Trends
3. Compensation Trends
• Pay Differentials & Parity
• Talent Mobility – Regional Executive
• Cost of Living

© MERCER 2017
GLOBAL & REGIONAL OUTLOOK

© MERCER 2017
W H AT D O Y O U T H I N K W I L L A F F E C T W O R K F O R C E I N T H E
NEAR FUTURE?

 WOMEN IN
WORKFORCE?

 ARTIFICIAL
INTELLIGENCE?

 CHANGING
EMPLYEE
ASPIRATIONS?

 GLOBAL
MOBILITY?

© MERCER 2017
THE CHANGING WORLD
W H AT ’ S A F F E C T I N G T H E F U T U R E O F J O B S

Rise of millennials joining the In the era of robots and

The global economic landscape In a world without boundaries,
was sluggish in 2016 and competition for talent & workforce is increasing. This artificial intelligence, the job
underwent increased volatility. resources has compounded. It has led to an evolved landscape is undergoing a
This put a direct pressure on is harder to manage expectations from employers revolution. Jobs of the future
business performance and expectation of a diverse as well as higher mobility of will be very different from the
costs. workforce. talent. jobs that we see now.

“This will profoundly impact the way organisations acquire and nurture talent in the
workplace”

© MERCER 2017
AROUND 2020,INDUSTRIES WILL START TO BE DISRUPTED!

AROUND 2020, YOU WOULDN’T WANT TO

OWN A CAR. YOU CAN CALL A CAR WITH
YOUR PHONE

BETTER MORE SPACE

90-95% LESS CARS WITH LESS LESS CAR ACCIDENTS,
NEIGHBOURHOODS
PARKING LOTS CHEAPER INSURANCE

© MERCER 2017
T H E T H R E AT O F A U T O M AT I O N
E M P L O Y M E N T O U T L O O K A C R O S S J O B FA M I L I E S
JOBS LOST JOBS ADDED

- 4M - 3M - 2M - 1M 0 + 1M +2M +3M + 4M
Business and Financial Operations +4.9M
Management +4.2M

25% skills will

Computer and Mathematical +4M
be redundant Architecture and Engineering +3.4M

Sales and Marketing Related +3M

Education and Training +0.7M

50% skills will -4.8M
be constant Office and Administrative
-1.6M Manufacturing and Production
-0.5M Construction and Extraction
25% skills
-0.15M Arts, Design, Sports and Media
will be new -0.11M Legal
-0.04M Installation and Maintenance

© MERCER 2017
T H E T H R E AT O F A U T O M AT I O N
ROBOT PROOF JOBS

Composers and Artists Engineers

25% skills will

be redundant Child Care Workers
Teachers
50% skills will
be constant

Nurse Practitioners

25% skills
Human Resources
will be new Home Health Aides

© MERCER 2017
TOP 10 SKILLS IN 2020

Top 10 skills in 2020

1. Complex Problem Solving
2. Critical Thinking
3. Creativity
4. People Management
5. Coordinating with Others
By 2020, more than a third of 6. Emotional Intelligence (responsiveness, empathy, listening, and self-awareness)
the desired core skill sets of
7. Decision Making
most occupations will be
comprised of skills that are not 8. Service Orientation
yet considered crucial to the 9. Negotiation
job today, 10. Cognitive Flexibility (creativity, logical reasoning and problem sensitivity)

Source: Future of Jobs Report, World Economic Forum

© MERCER 2017
EMERGING MARKETS POSITIONED FOR STRONG
G R O W T H C O M PA R E D T O G L O B A L
• ASEAN has the most rapid acceleration of GDP as compared to other major economic zones due to strong exports and domestic demand
• Vietnam is still expected to grow faster than all major economic regions, despite a drop in 2016

2014 2015 2016 2017 Forecast 2018 Forecast

6.5 VIETNAM
6 6.7 6.5 6.5
6.2
5.5 5.2
4.9 ASEAN
4.4 4.4 4.5
4.5 4.6 ASIA
4.5

3.5
3.4
3.1 3.1 3.8 4 GLOBAL

2.5
2.6
2.8 USA
2.4 1.7 2.4
1.5 1.7
0.9 1.6 1.6 1.6 EU
0.5
© MERCER 2017
GROWTH IN ASEAN
DRIVEN BY DOMESTIC DEMAND
• Growth is led by ASEAN nations, India, and China
• Salary increase is driven primarily by market practices
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
2017 GDP Growth 4.0%
% Forecast
3.0%
2017 Inflation Rate 2.0%
Forecast
1.0%
2017 Salary
Increase 0.0%
JP US AU SG HK KR TH MY PH CN KH ID VN MM IN
2017 GDP Growth % Forecast 1.2% 2.2% 3.1% 2.2% 2.4% 2.7% 3.0% 4.5% 6.8% 6.6% 6.9% 5.1% 6.5% 7.5% 7.2%
2017 Inflation Rate Forecast 0.4% 2.2% 2.0% 1.1% 2.6% 1.8% 1.4% 2.7% 3.6% 2.4% 3.2% 4.5% 4.9% 6.9% 4.8%
2017 Salary Increase 2.1% 2.9% 3.0% 3.7% 3.9% 4.1% 4.8% 4.9% 5.8% 5.8% 6.6% 7.9% 8.7% 9.0% 9.1%

Source: 2017 Global Compensation Planning Report, July

© MERCER 2017 Mercer Asia Market Pulse Survey H1 2017
GROWTH IN VIETNAM
20 YEAR OUTLOOK

25.0%
GDP Growth

20.0% Inflation
Salary Increase

15.0%

10.0%

5.0%

0.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

-5.0%

© MERCER 2017
WORKFORCE DEMOGRAPHICS
& TA L E N T T R E N D S

© MERCER 2017
POLLING QUESTION

Which Country do you think has the

most difficulty in filling jobs ?

a) Japan
b) China
c) Vietnam
d) Singapore

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TA L E N T Q U A L I T Y A C R O S S T H E G L O B E
TA L E N T C R U N C H

JP: 86%
CN: 10%
TW: 73%
HK: 69%
IN: 48%

SG: 51%

% Having Difficulty Filling Jobs

NZ: 46%

Source: Manpower Group - 2016/2017 Talent Shortage Survey

© MERCER 2017
TA L E N T Q U A L I T Y A C R O S S A S E A N
H U M A N C A P I TA L I N D E X
• Human Capital Index is a numeric translation of the economic value of an employee’s skillset.
• In VN, the upcoming workforce is significantly better skilled than the current workforce

CURRENT UPCOMING CURRENT UPCOMING

OVERALL OVERALL
WORKFORCE WORKFORCE WORKFORCE WORKFORCE

SG 81 77 86 VN 71 66 76

MY 76 71 82 ID 69 62 76

TH 73 69 77 KH 59 57 62

PH 73 70 76 MM 57 53 61

LEGEND BEST WORST

© MERCER 2017
TA L E N T Q U A L I T Y A C R O S S T H E G L O B E
H U M A N C A P I TA L I N D E X & R A N K

JP: 4
CN: 71 KR: 32
TH: 48
PH: 49
VN: 68
IN: 105 ID: 72
MY: 42
SG: 13
AU: 18

NZ: 6

Source: http://reports.weforum.org/human-capital-report-2016/

© MERCER 2017
P O P U L AT I O N B Y A G E
LOOKING INTO THE FUTURE
60 40+ Median Age by Country
2020
Age (in years)

50 2030

40 30+
Asia Median Age 2030: 34.8
World Median Age 2030: 32.3
30 Asia Median Age 2020: 32.0
World Median Age 2020: 30.8

20
Japan Hong Kong Korea Singapore Thailand UK China USA Australia Vietnam Malaysia Indonesia India Philippines

2020 2030
WORLD: WORLD:
7.8 BILLION 8.5 BILLION
APAC: APAC:
4.6 BILLION 5.0 BILLION
Source: UN Population Data 2016
Note: Estimation of population assumes that mortality and birth rate remain constant
© MERCER 2017
H I R I N G I N T E N T I O N & AT T R I T I O N R AT E S
C A U T I O U S H I R I N G & D O U B L E D I G I T AT T R I T I O N
2015 - 2016 ATTRITION RATE:

15 16 10 13 13 14 11 11 16 15
7 (2.2) (-0.3) (1.2) (-0.8)
(0.8) (1.7) (0.2) (0) (-1.2) (3.5)
(-2.2) 7 (0.2)

2017- 2016 HIRING INTENTION:

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0% 16 17 16 17 16 17 16 17 16 17 16 17 17
16 17 16 17 16 16 17 16 17 16 17

IN VN PH CN ID TH AU KR JP SG MY HK

Reduce staff No change Add staff Source: 2015 & 2016 Mercer Total Remuneration Surveys
Note: Data for China is from 2015 and 2016 Shanghai TRS
© MERCER 2017
C O M P E N S AT I O N I N S I G H T S I N A PA C

© MERCER 2017
PAY PA R I T Y B Y I N D U S T R I E S
MAJOR INDUSTRIES VS ALL INDUSTRIES
• Chemical and Consumer Goods Industry pay higher than All Industries across countries in ASEAN
• Chemical and Life Sciences Industries are the pay master in MY, PH, TH and VN
• High Tech Industry generally pays lower than other industries across ASEAN

% Deviation from All Industries (Annual Base Salary)

Chemical Consumer Goods
High-Tech Life Sciences

15% 15%
13% 12% 12%
11% 10% 11% 11%
7% 8%
6% 6% 6%
3% 2% 2%
1%

-2%
-6% -6% -7% -8%
-12%

ID MY PH SG TH VN
Source: 2016 Mercer Total Remuneration Surveys
© MERCER 2017 Note: Data for China is from 2016 Beijing TRS
Note: Data for India is Total Remuneration Target less LTI
 2017 SALARY INCREASE
ASEAN COUNTRIES
• 2017 salary increase is showing a positive trends in all countries in ASEAN region
• In 2018, companies are expected to reduce salary increase down slightly except VN
Increased since 2016 No change
10.0% 2016 (Actual) 9.6% 9.7%
8.5% 8.7% 9.3%
8.6% 2017 (Actual/Budgeted)
9.0% 8.6% 8.8% 8.6%

8.0%
6.8% 6.8%
7.0%
6.2% 6.2% 6.1%
5.8%
6.0% 5.3% 5.5% 5.2%
5.2% 5.4% 5.1%
5.0%
3.9% 3.9% 3.8%
4.0%
3.0%
2.0%
1.0%
0.0%
KH VN PH TH MY ID MM SG

Source: Mercer Asia Pulse Survey 2017 Cycle 1

© MERCER 2017
POLLING QUESTION

Which Country has the highest Pay

differentials from Executive level to
Para Professional level in Asia ?

a) Vietnam
b) China
c) Indonesia
d) India

© MERCER 2017
PAY D I F F E R E N T I A L S I N A PA C
E X E C U T I V E V S PA R A - P R O F E S S I O N A L
Executive to Para-Professional Pay Range
300,000 Pay Range 30
Pay Differential
26
250,000 25
Annual Total Cash (USD)

APAC Executive Average

200,000 20

Pay Differential
150,000 15
15 13
14
100,000 12 12 10
9
50,000 6 5
6 5 3 3
4 3
0 0
VN CN ID PH TH IN MY HK SG US KR UK JP AU

Source: International Geographic Salary Differentials 2017

© MERCER 2017
PAY PA R I T Y B Y I N D U S T R I E S
EXECUTIVE EMPLOYEES
450,000 Annual Total Cash Target
425,000
400,000 All Industries
375,000 Chemicals
350,000 Life Sciences
325,000 Consumer Goods
300,000
Amount (USD)

High Tech
275,000
250,000
225,000
200,000
175,000
150,000
125,000
100,000
75,000
50,000
25,000
0

Source: 2016 Mercer Total Remuneration Surveys

Note: Data for China is from 2016 Beijing TRS
© MERCER 2017 Note: Data for India is Total Remuneration Target less LTI
SINGAPORE: HUB FOR GLOBAL / REGIONAL EXECUTIVES
Locations of Directors and VPs+ with Global and Regional Responsibilities Executive Scope of Role in
Vietnam
22% 16% Others
GLOBAL
49% South Korea
1%
12% Japan
REGIONAL Malaysia Local
Australia Regional
12%
20% Hong Kong Global
14% China
19%
99%
11%

% of Regional % of Global
Rank Regional Global
Roles Roles
1 Singapore 49% Singapore 22%
2 China 14% China 20%
3 Australia 12% Australia 19%
* Mercer PC 60 and above Source: Mercer Total Remuneration Survey 2016
© MERCER 2017
C O M P O S I T I O N O F E X PAT R I AT E E M P L O Y E E S
ACROSS LEVELS
Composition of ‘Expats’ (%) by Hierarchy Level
Manager Senior Manager Director & Above
100%
23% 22% 16% 16%
80% 34% 31%
53% 46% 20%
22% 39%
60% 31%
28%
32%
40% 26%
33% 56% 64%
20% 41% 46% 45%
28% 34%
13%
0%
Taiwan Hong Kong Singapore China Thailand Indonesia Vietnam Malaysia

Source: Mercer-HRBS Executive Pay Survey 2016

* Mercer PC 52 and above ‘Expat’ – regardless of package types
© MERCER 2017
LOCAL-PLUS TERMS MOST COMMON
E X PAT R I AT E E X E C U T I V E PA C K A G E
Employment Terms for Expatriate Executives in APAC 2016 (%)

Foreigner on Local Package

57%
Local-Plus
V P & A B OV E
International Full-Expat
56%

23%
19% 24%
D I R EC TO R 20%

The Local-plus and foreigners on local package is a definitive trend due to cost pressures
and increase in local talent.
* Mercer PC 60 and above ‘Expat’ Source: Mercer-HRBS Executive Pay Survey 2016
© MERCER 2017
POLLING QUESTION

Which country has the highest Cost of

living for Expats in Asia?

a) Singapore
b) China
c) Hong Kong
d) Tokyo

© MERCER 2017
COST OF LIVING AND QUALITY OF LIVING
C O M PA R I S O N A C R O S S A PA C
Cost of Living Index Quality of Living Index

KUALA HO CHI MINH:

LUMPUR: 59 62 (152)
JAKARTA: 69 (151 ) MUMBAI: 62 (154)
(93) HONG KONG: AUCKLAND: 104
104 (1) (3)

MUMBAI: 69 JAKARTA: 65
(82) (143)
SEOUL: 98 (15) SYDNEY: 102
(10)

MANILA: 70 (80)
MANILA: 67 (135) TOKYO: 96 (47)
SINGAPORE 100 SINGAPORE
TOKYO: 95 (5)
(4)
100 (25)
HO CHI MINH: 71 BANGKOK: 68
(88) (131)
HONG KONG: 91
BEIJING: 92 (71)
(10)
BANGKOK: BEIJING: 71 (119)
SYDNEY: 84 SEOUL: 88 (76)
75 (74) AUCKLAND: 79 (42) KUALA LUMPUR: 84
(98) (86)
Source: Mercer Cost of Living and Quality of Living Reports 2016 and 2017
Note ;Numbers in brackets are country rankings globally
© MERCER 2017 Note ; COL and QOL index are calculated with Singapore as base with a score of 100
LOOKING AHEAD TO 2018
W H AT T O P R E PA R E F O R
2 3
1 Understand what drives the
workforce you need and
Examine the
effectiveness of Think about your entire value
design the program that will pay programs to proposition as your
drive your workforce & ensure the competitive advantage
business performance!
best ROI.

Looking at Leadership, Pay Upgrade your talent and Take a holistic view of the
and Performance reward communications total rewards if it is
linkages, T&D and use technology to effective to retain and
& benefits for millennials communicate attract people you need!

© MERCER 2017
R E M E M B E R … … . B E S T F I T, N O T B E S T
PRACTICE!

© MERCER 2017
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© MERCER 2017