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NORTH AFRICA SESSION LONDON, 6-7 MARCH 2012
The wave of change in 2011 and its impact on C&B Market:Toward new HR challenges?
Haykel BARBOUCH
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MERCER 109 March 2012
Agenda
Introduction:
Overview on the new global context and its impact on the business environment
Common HR Challenges in North Africa
I Latest C&B trends based on TRS Data for North Africa
1-Salary Increase s for 2011
2-Market Trends Comparison based on Mercer IPE (Position Class)
3-Typical Remuneration Mix by Career Stream (in % from TRS Data)
4-Typical C&B Levels by Career Stream (in Euro from TRS Data)
5-Market Movement for some positions (in % based YoY Reports)
6-Benchmarking of some Management positions (in Euro from TRS Data)
II C&B Topic: HR challenges ahead
Hard case from companies based in North Africa
III Discussion with attendees
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MERCER
History is Being Made
! The North Africa is Witnessing the beginning of a new era that is likely to impact:
- Other Arab Countries.- Countries elsewhere where authoritarian regimes are in power: fromVenezuela to Pakistan to North Korea.
! Many have thought that the Arab world was not ready to democracy and civilliberties, and only authoritarian regimes can provide stability in a volatile region,
However, recent events have shown that societies held together by fear may offerthe illusion of stability for a time. This kind of stability brought with it !"#$%&'() and disappointment and eventually led to popular uprising.
! Long term consequences still unclear. Five years from now Libya, and possiblyother Arab countries will look very different. When something has been in the
freezer for 40 years, it would be difficult to know how it will look when it melts.
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MERCER
*+$ -$.&/01" 2$3/.%45+&6 7#%86#8%$
! Very Youthful population, 60% below the age of 25.
! Median age of Egypt population is 23, while in the UK it is 40.
Population (in Milli
ons) : 2010
! 90084' .%/:#+ %4#$ /; 3/%$ #+40 #+$ %$.&/01" 5/58'4#&/0 :&'' ?/8@'$ /A$% #+$
next 25 years.
! High unemployment rates: 40% especially among the youth (40% ofunemployed are below the age of 24).
! The youth are connected; - Social media networks, mobile phones, Satellite TV.
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MERCER
The Geopolitical Landscape
! The beginning of a new era similar to what had happened in: Eastern Europe
BCDC 40? E4#&0 93$%&64 BCDF1"G
! There are few Arab countries with largely homogeneous majorities, most are a
mixture of ethnic, religious and tribal groups.
! With the new politics taking center stage:
- Extremist religious parties would need to reinvent themselves, become ineffect Muslim Democrats, similar to Christian Democrats in Europe.
- Rise of secular parties with young and progressive leadership.
- There is a generational shift in attitude towards authority, the youth are
unhappy with the paternalistic culture and its structure of obedience.
! A unified army in Egypt and Tunisia would oversee a peaceful transition to
democracy.
! Countries fractured by ethnic, tribal and religious divisions are likely to suffer
from chaos and civil strife for months and years to come; Libya.
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Introduction
509 March 2012
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IntroductionOverview on the new political context and its Impact on the Business Environment
H Egypt & Tunisia
Down
* New and inexperienced parties at power
* The whole Economy plunged
* Social unrest and strikes are continuing
* Some violence scenes are raising fears
609 March 2012
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MERCER
IntroductionOverview on the new political context and its Impact on the Business Environment
H Egypt & Tunisia
Up
* Democracy is enlarging to the whole society
* Business partnering will not be anymore monopolized
* The rising of civil society with youth people ready to
volunteer
* Common people expect strong support from foreign
countries to help them achieve a free society
709 March 2012
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MERCER
IntroductionOverview on the new political context and its Impact on the Business Environment
H Libya
* Kaddafi is over but his shadow is still there
* Harsh dispute among militias
* The whole economy without money
* NGOs are there to provide basic support
809 March 2012
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MERCER
IntroductionOverview on the new political context and its Impact on the Business Environment
H Algeria
* Compromised by its support to Kaddafi
* President Bouteflika still at power
* The regulation swing is still at play
* Multinational companies are continuing toopen subsidiaries
* Algerian immigration regulation are more
drastic since summer 2011
* Government is buying peace by increasing
salaries (minimum wage increased by 20%
from January 2012 , last increase was in2008 by same rate and public sector is
increasing salaries by 25 I 80%)
909 March 2012
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MERCER
I Latest C&B trends based on TRS Data for each country1-Comparison between Salary Increase for 2011 and 2009
1009 March 2012
7,97
6,77
2,9
10,74
16,8
11,09
6,55
9,16
4
5,626,6
5,69
12
17,26
16,2
6,25
7,35
4,1
0
2
4
6
8
10
12
14
16
18
20
ActualSalary
Movement
Marketmovement
InflationRate
ActualSalary
Movement
Marketmovement
InflationRate
ActualSalary
Movement
Marketmovement
InflationRate
AlgeriaEgyptTunisia
2011
2009
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I Latest C&B trends based on TRS Data for each country2-Market Trends Comparison based on Mercer IPE (Position Class) 1/3
1109 March 2012
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
40 42 44 46 48 50 52 54 56 58 60 62 64
Median in Euro
Position Class
Annual Base Salary ! Comp 1
Maroc
Algeria
Tunisia
Egypt
Morocco
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MERCER
I Latest C&B trends based on TRS Data for each country2-Market Trends Comparison based on Mercer IPE (Position Class) 2/3
1209 March 2012
0
50000
100000
150000
200000
250000
300000
40 42 44 46 48 50 52 54 56 58 60 62 64
Median in Euro
Position Class
Total Cash ! Comp 3
Maroc
Algeria
Tunisia
Egypt
Morocco
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MERCER
I Latest C&B trends based on TRS Data for each country3-Market Trends Comparison based on Mercer IPE (Position Class) 3/3
1309 March 2012
0
50000
100000
150000
200000
250000
300000
40 42 44 46 48 50 52 54 56 58 60 62 64
Median in Euro
Position Class
Total Remuneration !
Comp 5
Maroc
Algeria
Tunisia
Egypt
Morocco
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MERCER 1409 March 2012
I Latest C&B trends based on TRS Data for each country3-Typical Remuneration Mix by Career Stream (in % from TRS Data) 1/4
62,69
51,30
60,8269,95
7,66
13,36
14,60
12,82
23,54
22,65
14,38
11,79
6,1112,6910,19
5,45
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ExcecutiveManagementProfessionalPara-Professional
Algeria 2011
comp5
comp3
comp2
comp1
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MERCER
I Latest C&B trends based on TRS Data for each country3-Typical Remuneration Mix by Career Stream (in % from TRS Data) 2/4
1509 March 2012
54,7162,5866,0963,00
5,42
8,438,7313,56
25,21
16,9414,9511,11
14,6612,0410,2312,33
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ExcecutiveManagementProfessionalPara-Professional
Egypt 2011
comp5comp3
comp2
comp1
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MERCER
I Latest C&B trends based on TRS Data for each country3-Typical Remuneration Mix by Career Stream (in % from TRS Data) 3/4
1609 March 2012
33,72
53,1062,1358,54
29,68
22,1117,6624,97
21,00
12,369,636,01
15,6012,4410,5810,47
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ExcecutiveManagementProfessionalPara-Professional
Morocco 2011
comp5
comp3
comp2
comp1
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MERCER
I Latest C&B trends based on TRS Data for each country3-Typical Remuneration Mix by Career Stream (in % from TRS Data) 4/4
1709 March 2012
62,2468,1868,78
62,04
2,383,183,27
6,91
23,7213,9212,9110,57
11,6614,7215,0420,48
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%100%
ExcecutiveManagementProfessionalPara-Professional
Tunisia 2011
comp5
comp3
comp2
comp1
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MERCER
I Latest C&B trends in North Africa4- Typical C&B Levels by Career Stream (in Euro from TRS Data) 1/4
1809 March 2012
61 028
16 63211 642
5 6090
10000
20000
30000
40000
50000
60000
70000
80000
90000
ExcecutiveManagementProfessionalPara-Professional
Algeria 2011
comp5
comp3
comp2
comp1
In Euro
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MERCER
I Latest C&B trends in North Africa
4- Typical C&B Levels by Career Stream (in Euro from TRS Data) 2/4
1909 March 2012
73 471
26 08215 132
6 730 0
20000
40000
60000
80000
100000
120000
ExcecutiveManagementProfessionalPara-Professional
Egypt 2011
comp5
comp3
comp2
comp1
In Euro
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MERCER
I Latest C&B trends in North Africa
4- Typical C&B Levels by Career Stream (in Euro from TRS Data) 3/4
2009 March 2012
85 699
34 64322 913
8 8640
20000
40000
60000
80000
100000
120000
140000
160000
ExcecutiveManagementProfessionalPara-Professional
Morocco 2011
comp5comp3
comp2
comp1
In Euro
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MERCER 2109 March 2012
I Latest C&B trends in North Africa4- Typical C&B Levels by Career Stream (in Euro from TRS Data) 4/4
58 519
21 29514 102
8 1130
10000
20000
30000
40000
50000
60000
70000
80000
90000
ExcecutiveManagementProfessionalPara-Professional
Tunisia 2011
comp5
comp3
comp2
comp1
In Euro
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MERCER
I Latest C&B trends based on TRS Data for each country5-Market Movement (2009/2011 increase in % based YoY Reports)
2209 March 2012
0
2
4
6
810
12
14
16
18
20
2011 2009 2011 2009 2011 2009
Algeria Egypt Tunisia
%
+ 0.11
- 0.46
+ 1.8
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MERCER
I Latest C&B trends based on TRS Data for each country6-Benchmarking of some Management positions (in % from TRS Data) 1/4
2309 March 2012
11,3
12,8
10,6
0
2
4
6
8
10
12
14
ALGEGYPTTUN
HR Manager %
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MERCER
I Latest C&B trends based on TRS Data for each country6-Benchmarking of some Management positions (in %from TRS Data) 2/4
2409 March 2012
9,3
21,4
12,4
0
5
10
15
20
25
ALGEGYPTTUN
Brand/Product Manager %
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MERCER
I Latest C&B trends based on TRS Data for each country6-Benchmarking of some Management positions (in %from TRS Data) 3/4
2509 March 2012
7,6
17,4
10,1
0
2
4
6
8
10
12
14
16
18
20
Algeria Egypt Tunisia
Production Manager%
I C S
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MERCER
I Latest C&B trends based on TRS Data for each country6-Benchmarking of some Management positions (in % from TRS Data) 4/4
2609 March 2012
8,8
12,4
9,2
0
2
4
6
8
10
12
14
Algeria Egypt Tunisia
Sales Manager%
II T d HR h ll ?
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MERCER
II Toward new HR challenges ?
2709 March 2012
Blue Collars
pressure demandingimmediate salaryincreases
Unions backing salaryincrease demands
Open Strikeresulting in delivery
delays
Strained Dialoguebetween Unions &
the Company
How to understand themarket and to align to it
without compromising thecorporate
policy and creating sharpgap with other regions?
Dilemma fortheMultinationalcompanies :
II T d HR h ll ?
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II Toward new HR challenges ?
2809 March 2012
Common Issues :HR
* Lack of support from the TopManagement to HR
Management
* HRDs only focused on Admin
are over* HR Topics will need in the
future to be better interrelated
C&B
* C&B policy over focused onExternal Competitiveness
* Talents are not treated inaccordance with C&B policy
II To ard ne HR challenges ?
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II Toward new HR challenges ?
2909 March 2012
Recurrent insights :
* Multinational companies shouldcommunicate on their sustainable
presence
* Corporate social responsibility isbecoming key
II Hard Cases
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II Hard Cases
H Examples of Multinational company issues faced in Algeria :
H 2011:Arecelor Mittal Steel complex in Annaba blocked by strikes mainly for salaryconditions improvement and hiring of temporary employees for months forced
company to declare bankrupt and forced involvement of Algerian government to
give helps by fiscal advantages and bank loans free of interest to stop the process
and avoid a big social crisis in the east of the country.
H 2012: Big protest in Sanofi pharmaceuticals subsidiary in Algeria in February 2012
(covered on newspapers), where sales representatives teams claimed officially
during a town hall meeting salary increases, better company cars, better conditions
of work and company management accepted to proceed for this year (march 2012)
after discussions to avoid strike and social conflict.
3009 March 2012
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