2016 Vietnam TRS Results

2016 Post Sur vey Seminar
Ho Chi Minh City, 6 th October, 2016

Ha Noi, 7 th October, 2016
Ms. Hoa Nguyen

© Copyright 2016. All rights reserved
Senior Director, Talentnet
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. 1
Fun Facts about 2016 Post Survey Seminar and 2016 TRS
1st 3.4
9th 16/09
Talentnet in association with Mercer 2

Contents
01 Economic Overview
02 Compensation & Benefits Trends

03 Other Trends

Terms & Definitions - COMP
COMP1 COMP2 COMP3

Annual Base Salary Annual Guaranteed Cash Annual Total Cash
Variable Pay
Allowance Allowance
Annual Base Annual Base Annual Base

Salary Salary Salary
Talentnet in association with Mercer 4 Source: 2016 Vietnam TRS

Terms & Definitions
Position Class (PC) - is a job weight (size) resulted from Mercer International
1 Position Evaluation system
Market Regressed Line - The result of applying one of several mathematical

models to fit a smooth curve through a series of graphed "X/Y" points
2
(representing Position Class and a compensation figure respectively) such
that the curve best represents the overall trend in those points
Mean (Average) - The sum of all data reported divided by the number of
3
observations in the sample
Median (P50) - The data point that is higher than 50% of all other data in the
4
sample when ranked from low to high

Terms & Definitions
Executives - Typically includes top executives and function heads providing

1 strategic vision and/or tactical/strategic direction across multiple functions or
sub-functions
Management - Typically management and supervisory professionals focusing

2 on tactical and/or operational activities within a specified area
Professionals - Typically professionals with no management responsibility,

3
although may provide mentoring and coaching to less experienced staff
Para-Professionals - Typically roles that are semi-skilled or unskilled with no

4
supervisory or management responsibility

Economic
Overview
Compensation
& Benefits
Trends
Economic Overview
Other Trends

Vietnam Economic Overview
AEC, TPP, VN-EU, RCEP provide fresh stimulus for reform

Increased FDI continue to boost export
Inflation rate is controlled and GDP is good
Increasing middle class, consumer power and willingness to

spend
Star of the economy: Manufacturing, Construction & Real Estate,

High Tech

Vietnam Workforce Overview
“PRIME AGE” WORKFORCE
Low cost and young, Hard working and

dynamic workforce love to learn
Productivity,
Low mobility, high
leadership, EN skills
family value
need improvement

Factors to Consider for Salary Increase Proposal
INTERNAL EXTERNAL
1 Profit/revenue of last year & next year 1 Minimum wage increase
2 Actual current pay vs pay policy 2 Salary increase of the market
3 Increase history, union agreements 3 Inflation
4 Retention & engagement issue related to C&B 4 Employee turnover trend

5 Recruitment issue related to C&B 5 Hiring trend

Expected Business Performance in 2016 vs 2015
Significant increase (>15% increase) 14%
Moderate increase (5 - 15% increase) 31%
Similar (+/- 5% change) 53%

Moderate reduction (5 - 15%

reduction)
2%
No. of Responses = 62
Talentnet in association with Mercer 11 Source: 2016 Mercer Asia Pulse Survey
Change in HR Budget in 2016 vs 2015
Significant increase (>15% increase) 7%
Moderate increase (5 - 15% increase) 20%
Similar (+/- 5% change) 64%

Moderate reduction (5 - 15%

reduction)
9%
No. of Responses = 54
Change in HR Budget in 2016 vs 2015
Impact on budget in 2016 on account of current economic
conditions in your country
Travel budgets (N=47) 60% 13% 28%
Recruitment budgets
67% 19% 13%
(N=52)
Training budgets (N=53) 70% 21% 9%
Welfare amenities (N=50) 76% 22% 2%

Employee benefits like

79% 19% 2%
Transportation,…
No Changes Increase in Expenses Reduction in Expenses

*N = No. of Responses
Economic
Overview
Compensation
& Benefits
Trends
Compensation & Other Trends

Benefits Trends
Survey Demographics - 2016 VN TRS
2 Databases 557
(MNC & Local Co.) Organizations
16 Industries
481 MNC &
76 Local Co.
2,525
Benchmarking positions
(by Job & PC range)
244,526
Employees’ data

Growth in 2016 VN TRS
No. of participants - 2016 vs 2015 No. of employees’ data
2015 2016
All industries (MNC + LOCAL)
2015 2016 +15%

211,816 244,526
+7%
520 557 No. of benchmarking positions (Jobs + Position Class Range)
2015 2016
MNC 4% +10%
2,305 2,525
Local 33%

2016 Participants’ Profile - MNC
Total 16 Industries with 2 new Industries
Agriculture, 11
Trading, 32 New industries
Chemicals, 52
Biggest industries
Transportation & Logistics, 20
Various Manufacturing, 41
Retail, 8
No. of Consumer Goods, 71
Real Estate, 15
MNC Companies
Other Industries, 27
481 Education, 10
Oil & Mining, 16

FS - Banking, 18
Life Sciences, 50 FS - Insurance, 21

FS - Non Banking, 12
High Tech, 77

2016 Participants’ Profile - Local
2 Industries with good number of participants
Various Manufacturing, 2 Agriculture, 4

Transportation & Logistics, 4
Consumer Goods, 8
Trading, 4
Retail, 4
No. of
Real Estate, 9 Local Companies FS - Banking, 13
76
FS - Insurance, 1
Other Industries, 9
FS - Non Banking, 8
High Tech, 10

Salary Trends
Incentives
Updates
Hot jobs &

Hiring intention
Salary Trends
Benefits Trends

Pay Difference between Local Companies and MNCs
Big gap between Local Companies and MNCs remained for COMP 1
3,500,000
3,000,000
-31%
MNC
Management
2,500,000 Local
-38%
2,000,000
Professional
1,500,000 -30%
1,000,000 Para-professional
-20%
500,000
0
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58
Position Class
Pay Difference between Local Companies and MNCs
The gap is a little less for Annual Total Cash (COMP 3 Actual)
3,500,000
3,000,000
-27% Management
MNC -36%
2,500,000 Local
2,000,000 Professional
-27%
1,500,000
-13%
500,000
0
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58
Position Class
Pay Difference by Industry - MNC
Percentage Deviation from All Industries Percentage Deviation from All Industries
(Annual Guaranteed Cash - COMP 2) (Annual Total Cash Actual - COMP 3 Actual)
67% Oil & Mining 67%
9% Chemicals 11%
8% FS - Banking 12%
3% Life Sciences 9%
3% Trading 0%
1% FS - Non Banking 6%
1% High Tech -2%
-2% Consumer Goods 0%
-3% Education -10%
-5% FS - Insurance -4%
-5% Logistics -8%
-10% Various Manufacturing -12%

-14% Real Estate -15%
-20% Agriculture -6%
-22% Retail -28%
All Industries All Industries

Regressed Median Regressed Median
Salary Increase Trend in relation to Inflation and GDP
Salary Increase (Excl Salary Freeze) - MNC
15.2% Salary Increase (Excl Salary Freeze) - Local

13.4%
10.7%
12.5% 12.7% 12.3% 9.4% 9.7% 9.3% 9.6%
10.8% 9.9%
9.0% 8.9% 9.2%
GDP Growth 6.8% 6.7% 6.7% 6.5%
5.9% 5.4% 6.0%
5.0%
Inflation 11.8% 18.1% 9.3% 6.6% 4.1% 2.1% 3.0% 4.0%
2010 2011 2012 2013 2014 2015 2016 2017

(forecast)
Talentnet in association with Mercer 23 Source: 2016 Vietnam TRS; GSO (2015), ADB (2016 & 2017)
2016 Salary Increase Trend - Top 3 & Bottom 3
Top 3 industries
Bottom 3 industries
1 High Tech 9.9%
2 Manufacturing 9.8% 1 Education 7.5%

3 Life Sciences
9.7% 2 FS - Banking 6.7%
Chemicals
3 Oil & Mining 5.0%

Market Movement - Same Companies - MNC
Annual Base Salary (COMP 1)
3,500,000
3,000,000
+6%
June-16
Management
2,500,000
June-15 +6%
2,000,000
Professional
1,500,000 +6%
+7%
500,000
0
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58
Position Class
Market Movement - Same Companies - MNC
Annual Total Cash (COMP 3 Actual)
3,500,000
3,000,000
+7%
Management
June-16
+7%
2,500,000
June-15
2,000,000 Professional
+7%
1,500,000
+8%
500,000
0
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58
Position Class
Salary Trends
Compared to 2015, do you think
Short-term incentives for 2016 will: Incentives
Updates
a) Increase
b) Decrease Hot jobs &
Hiring intention
c) Remain the same
Benefits Trends

Variable Bonus Trend
Variable bonus as % of base salary

25%
19.9% 20.4% 20.6%

20% 17.9% 17.3%
19.6%
15%
15.8% 15.1% 15.5% 15.2% 15.9% 16.4%
10%
MNC
Local
5%
0%
2010 2011 2012 2013 2014 2015 2016
(Actual) (Planned)
Target 2016 Variable Bonus - Top 3 & Bottom 3 - MNC
Top 3 industries
Bottom 3 industries
1 FS - Non Banking 22.5%
2 Agriculture 22.1% 1 Logistics 12.2%

3 FS - Banking 19.9% 2 Retail 11.7%
3 Education 8.8%

Variable Bonus & Sales Incentives
% Co have VB % Co have SI % Co have BOTH
MNC 97% 50% 12%

Local 93% 67% 24%
*BOTH: Sales Incentive & Variable Bonus for Sales employees

Long Term Incentives
% Companies providing LTIs
9% 50% CASH
Yes
No
50% NON-CASH

Salary Trends
Compared to previous year, do
you think the voluntary staff Incentives
turnover rates will:

Updates
a) Increase Hot jobs &

Hiring
b) Decrease intention
c) Remain the same Benefits Trends

Voluntary Staff Turnover Trend
25%
20% 18.8%
16.9% 17.1% 17.2% 17.0%
15.7%
15%
15.6% 15.0%
10% 13.0% 12.2% 12.7% 13.7% 8.6%
MNC
Local
5% 6.6%
0%
2010 2011 2012 2013 2014 2015 H1-2016

2015 Voluntary Staff Turnover - Top 3 & Bottom 3 - MNC
Top 3 industries
Bottom 3 industries
1 Retail 39.2%
2 Life Sciences 17.0% 1 Trading 10.8%

3 Consumer Goods 16.2% 2 Chemicals 8.6%
3 Oil & Mining 5.7%

Hot Jobs in 2016 - MNC
Difficult to RECRUIT Difficult to RETAIN
SALES SALES
Management
1 Experienced
SALES SALES
Experienced 2 Management
MARKETING MARKETING
Management 3 Management

Hiring Intention predicted for next 12 months - MNC
49%
47%
4%
Increase headcount
No change in headcount
Reduce headcount

Salary Trends
Incentives
Updates
Hot jobs &

Hiring intention
Benefits Trends
Benefits Trends

Benefits Survey
Participant Profile Main Items:
 Working hours Travel
345
 Telecommuting
 Annual Leave
 Parental Leave
 Dependent Care Support
 Sick & Hospitalization Leave
 Travel Insurance
Participants 


Air Travel Policy
Travel Expenses – Domestic & Overseas
Health, Accident, Life Insurance
Training
 Medical Check-up
 Car Benefits
12
 Loans (Car, Housing, Personal)
 Training & Development policy
 Foreign Language Training
 Allowances (transportation, meal, acting , …)
 Golf club, Recreational club, Fitness club membership

 Long Service Awards Car benefits
Industries 


Outing trip
Congratulations & Condolences
Domestic Relocation
 Long-term incentives
 Referral Program
… and more
Talentnet in association with Mercer 38 Source: 2016 Vietnam Benefits Survey

Benefits Cost
Total benefits expenditure as % payroll
3% 2%
0 - 10%
20%
31% 11% - 20%
21% - 30%
31% - 40%
More than 40%
44%
Talentnet in association with Mercer 39 Source: 2016 APAC Benefits Pulse Survey
The Design of Your Total Rewards Strategy
More important than ever
Think holistically Draw on multiple Consider outcomes before

perspectives design
Pay Benefits Engage-

Attraction
ment
Employer Employee
DESIGN
Careers Work/life Retention Results
Cost External
Reward elements are Use facts and Use data and analytics
interdependent analytical tools
Talentnet in association with Mercer 40 Source: Mercer

Benefits Planning at LinkedIn
Design with a purpose

What matters most
Know your market
Develop your business case

Pilot your program
Branding & Communications
Measure success
Iterate
Talentnet in association with Mercer 41 Source: LinkedIn, 2016 Mercer AMEA HR Conference
Why Are We Doing This?
… Whether for business, or because it’s the right thing to do
 Attract and retain top talent

 Differentiate us as an employer
 Reduce employee distractions
 Focus on wellness
 Increase employee engagement and energy
We believe in all of the above

What Matters Most
Your employee preference - understanding importance vs satisfaction
Higher Supplementary
retirement plan
Medical Cvg
Vacation
Importance
Pension
Flexible Work
Arrgmnts
Sick Days Dental Cvg
Portable Medical Wellness Progs

Financial Educ Life Insurance
Lower Educ Asst STD/LTD
Lower Satisfaction Higher
Considerations When Developing Your Business Case
• Objective
• High Level Scope
• Market Data, Internal Data
• Measures of Success
• Impact to Organization and Employees
• Cost
PILOT/ BETA TEST THE PROGRAM

Communication
ONE TO MANY
ROADSHOWS / CLINICS
LEVERAGE TECHNOLOGY
#goINLIFE
Benefit Portal
DIGITAL & PRINT

BROCHURES
Measure Results - Data, Data, Data
What does it tell us? What behaviors can we reinforce?
Employee Feedback
Over 700 comments
“I just love it.

“a win-win “valuable to LinkedIn
situation” every employee” Rocks :):)”
“my wife actually

“great idea!” cried with joy”
“we are moved by

the gesture!”
Economic
Overview
Compensation
& Benefits
Trends
Other Trends
Other Trends

LOCAL PLUS Local Plus
Gen Y

Local Plus trends
% Companies have Local Plus
23%
WHO ARE THEY?
• Foreign nationalities
• Move to other countries 2016
• Be officially hired by
the host countries
Local Plus Local

Local Plus trends
As % of Companies (Co.)
% Co. have Local Plus % Co. have Local Plus by Industry - MNC
Retail 63%
26% Education 60%

22% MNC
FS - Insurance 48%
Local
Logistics 40%
Real Estate 40%

MNC Local

Local Plus trends - MNC
As % of Industry Population
Data of Local Plus as % of Industry Population - MNC

Top 4 Industry
Education 14.8%
FS - Insurance 1.6%
Chemicals 1.2%
Real Estate 1.0%

Local Plus trends - MNC
As % of Local Plus population
% Local Plus population by level - MNC % Local Plus population - MNC

Top 7 home countries
47%
United Kingdom 15%
Australia 12%
32%
United States 12%
Philippines 9%
10% France 6%
5% 5% Taiwan 5%
1%
Executive Management Management Professional Professional Para - India 4%
Non - sales Sales Non - sales Sales Professional

GEN Y Local Plus
Gen Y

Gen Y - MNC
% Gen Y Population
2016
TOMORROW’S LEADER
WHO ARE THEY?
BORN BETWEEN 1980 AND 2000
Often called ‘GENERATION WHY’, the ‘ME 80%
GENERATION’ and ‘TROPHY KIDS’

Gen Y - MNC
% Gen Y Population by level % Gen Y Population in Mngt. Level

Top 3 industries
8%
34%
77%
FS - Banking 54%
89%
92%
66%
FS - Non Banking 48%
23%
11% High Tech 48%
Executive Management Professional Para-Professional

Gen X Gen Y

Millennials decoded
Things that matter
Interested in knowing just how well
Desire a strong relationship with
Want constant recognition “pat on they’re performing and aggressive
their bosses, yet are much more
the back” or “email” and value the seekers of feedback. They thrive on
willing to leave if they lack a
connection it and are not at all afraid of
connection with that person
feedback that is disappointing
Less patient and hungrier to move

Like being constantly challenged fast…want more formal leadership
and need a variety of experiences development opportunities…, wants to see
to keep them engaged a clear road map for moving up within the
organization
Value flexibility – “I should be able to set my Meaningful work…may even place this over a
own work hours” high paying job
Talentnet in association with Mercer 57 Source: Millennials in the Workplace Infographic, Mercer
2017 Planning & Budgeting - MNC
GDP Hiring Intention Variable Bonus

+
6.5% 49.0% 16.4%

Inflation Salary Increase Sales Incentive
4.0% 9.2% 38.5%

Thank you
And See you next year!

New in 2017
1 Surveys: 1 more survey (Life Sciences)
2 Mercer Job Library: same job codes for all surveys globally
3 WIN: link with eIPE, more search advances

4 Mercer Training Workshops: 5 workshops in 2017

Upcoming Mercer College Workshops
Year Workshop’s name Tentative date
2016 Strategic Workforce Planning 11th November
1 Compensation for Today's Business 17th March
2 Talent Battle Field & Compensation 14th April
2017 3 Designing Core Compensation Vehicles 12th May

4 Workforce Metric & Analytics 18th August
5 Strategic Workforce Planning 11th November

Mercer Learning Online - Basic Information
Why Mercer Learning? Mercer Learning Online - 5 Competencies
All courses are based

Mercer has been ranked
on Mercer’s points of
the #1 HR consultancy
view and can be applied
by Vault.com for nine Performance & Analytics & Talent
consecutive years. to global functions
with local adaptions. Rewards Change Management
All courses are

constantly updated We will bring learning
and delivered by directly to your
Mercer’s experts, who organization and
develop content Business Talent
work with leading
organizations every day. specifically for you. Partnering Acquisition

About
Mercer is a global consulting leader in talent, health, retirement, and investments.
• US$4.2 billion in revenue • 20,000+ colleagues
• 76 years of operation • Offices in over 40 countries
• 4 main consulting sectors • Operations in over 130 countries
Benefits consulting
Retirement plan consulting
Insurance brokerage
Retirement plan administration
Benefits administration
Leadership and organization

Pension risk management
performance
Information and technology
solutions Defined contribution
Workforce analytics
plan investments
and planning
Compensation consulting
International mobility Investment fund consulting
consulting

About
Talentnet is the leading Human Resources consulting firm in Vietnam.
• Originated from PricewaterhouseCoopers Vietnam • 200+ colleagues (+20 in Salary Surveys and
HR Consulting Services business unit)
• Offices in Ho Chi Minh, Hanoi and Bac Ninh
• Partners with 600 big companies in Vietnam
• Strategic partner with Mercer and ADP
• 3 business units
Salary Surveys
& HR
Consulting
Services
(SSC)
Executive
Payroll &
Search &
Outsourcing
Selection
Services
(ESS)
(POS)

About Salary Surveys & HR Consulting Services
Total Remuneration Survey (TRS) Benefits survey HR Consulting Services
To evaluate how competitive your To understand current practices 1 Job Description

1
total remuneration elements are 1 and get an overview of statutory
requirements 2 Position Evaluation
To ensure external competitiveness
To identify appropriate market- 3 Salary Structure & Salary Increase Matrix
2 and maintain internal equity in 2
competitive benefits packages
your pay strategy
4 Performance Management System
To understand how companies set
To be able to customize your 3 up their benefits plans for different
5 Bonus Allocation
3 employee groups
comparison against the market
6 General Competencies Framework
557
Companies 481 MNC 7 Benefits Scheme Design or Benchmarking

76 Local
16
2,481 244,526 Industries 345 12 Total
Non
Positions Employees’ Participants Industries Total
Rewards
data Rewards

Why choosing
We have the largest, most reliable remuneration database of 557 companies from 16
1 industries in 2016
We have a good number of consultants having extensive experience in doing HR

2 projects with big MNCs & local companies
We have high level of commitment and customer service to always deliver project
3 outcomes as promised with excellent quality
We provide great post project support so that clients can really implement the new
4 HR systems
We provide solutions that best meet client’s needs thanks to our good combination of
5 global methodologies and local insights

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2016 Vietnam TRS Results

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2016 Post Sur vey Seminar

Ho Chi Minh City, 6 th October, 2016

Ms. Hoa Nguyen

Senior Director, Talentnet

Talentnet in association with Mercer 2

02 Compensation & Benefits Trends

Talentnet in association with Mercer 3

COMP1 COMP2 COMP3

Annual Base Annual Base Annual Base

Talentnet in association with Mercer 4 Source: 2016 Vietnam TRS

Market Regressed Line - The result of applying one of several mathematical

observations in the sample

Talentnet in association with Mercer 5 Source: 2016 Vietnam TRS

Executives - Typically includes top executives and function heads providing

Management - Typically management and supervisory professionals focusing

Professionals - Typically professionals with no management responsibility,

Para-Professionals - Typically roles that are semi-skilled or unskilled with no

Talentnet in association with Mercer 6 Source: 2016 Vietnam TRS

Talentnet in association with Mercer 7

AEC, TPP, VN-EU, RCEP provide fresh stimulus for reform

Inflation rate is controlled and GDP is good

Increasing middle class, consumer power and willingness to

Star of the economy: Manufacturing, Construction & Real Estate,

Talentnet in association with Mercer 8

“PRIME AGE” WORKFORCE

Low cost and young, Hard working and

Talentnet in association with Mercer 9

2 Actual current pay vs pay policy 2 Salary increase of the market

3 Increase history, union agreements 3 Inflation

4 Retention & engagement issue related to C&B 4 Employee turnover trend

5 Recruitment issue related to C&B 5 Hiring trend

Talentnet in association with Mercer 10

Significant increase (>15% increase) 14%

Moderate increase (5 - 15% increase) 31%

Similar (+/- 5% change) 53%

Moderate reduction (5 - 15%

Significant increase (>15% increase) 7%

Moderate increase (5 - 15% increase) 20%

Similar (+/- 5% change) 64%

Moderate reduction (5 - 15%

Travel budgets (N=47) 60% 13% 28%

Training budgets (N=53) 70% 21% 9%

Welfare amenities (N=50) 76% 22% 2%

Employee benefits like

No Changes Increase in Expenses Reduction in Expenses

Compensation & Other Trends

Talentnet in association with Mercer 15 Source: 2016 Vietnam TRS

2015 2016 +15%

Talentnet in association with Mercer 16 Source: 2016 Vietnam TRS

Oil & Mining, 16

Life Sciences, 50 FS - Insurance, 21

Talentnet in association with Mercer 17 Source: 2016 Vietnam TRS

Various Manufacturing, 2 Agriculture, 4

Talentnet in association with Mercer 18 Source: 2016 Vietnam TRS

Hot jobs &

Talentnet in association with Mercer 19

-10% Various Manufacturing -12%

All Industries All Industries

Salary Increase (Excl Salary Freeze) - MNC

15.2% Salary Increase (Excl Salary Freeze) - Local

Inflation 11.8% 18.1% 9.3% 6.6% 4.1% 2.1% 3.0% 4.0%

2010 2011 2012 2013 2014 2015 2016 2017

2 Manufacturing 9.8% 1 Education 7.5%

3 Oil & Mining 5.0%