Author: Kai Donesa

Oil Rig

The 2026 Iran Conflict: Implications for Global Business and Practical Mitigation Strategies

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group provides insights into volatile labor markets that are making news headlines, focusing on key developments.  

The conflict involving Iran in 2026 has quickly emerged as one of the most consequential geopolitical developments in recent years. While hostilities remain concentrated in the Middle East, the economic ripple effects are being felt far beyond the region. Energy markets have reacted sharply, shipping routes are under strain, and uncertainty has begun to weigh on financial markets worldwide.

For business leaders, the central concern is clear: how will this conflict affect operations, costs, and long-term planning?

There is no simple answer. The impact will vary across industries and geographies. What is certain, however, is that geopolitical disruptions of this scale tend to affect global business in ways that are both direct and indirect—and that careful planning can meaningfully limit exposure and preserve operational stability.

Background of the Conflict

The current crisis escalated in late February 2026 following coordinated military strikes against Iranian targets by the United States and Israel. The strikes triggered a series of retaliatory actions by Iran, including missile and drone attacks on military and strategic targets across the Gulf region.

Tensions around the Strait of Hormuz, one of the world’s most strategically important shipping corridors, have also intensified. In an article by the Los Angeles Times, roughly one‑fifth of global oil supply typically passes through this narrow waterway (Bulos, 2026), meaning even partial disruption can quickly ripple through energy markets and supply chains. According to the United Nations, the strait is responsible for approximately a quarter of the world’s seaborne oil trade, along with substantial quantities of liquefied natural gas and fertilizers (UN Trade and Development, 2026). Reports indicate that vessel strikes, maritime security warnings, and rising war‑risk insurance premiums have significantly reduced tanker traffic through the strait. Shipping companies have responded by delaying shipments, rerouting vessels, or temporarily suspending Gulf transit altogether (Tan and Chow, 2026).

Why This Matters for Businesses

Geopolitical developments rarely stay confined to the political sphere. The Iran conflict illustrates how quickly instability in one region can reverberate across global industries.

Energy markets reacted first. Oil prices rose as traders anticipated possible supply disruptions—a cost increase felt directly by aviation, logistics, manufacturing, and shipping. According to The Guardian, nearly all tanker operators have halted passage through the strait (Lowell, 2026). Supply chains have also come under parallel pressure: when shipping companies avoid higher‑risk maritime routes, cargo must travel longer distances, driving up transportation costs, extending delivery timelines, and creating new bottlenecks in already complex networks.

Financial markets have shown similar sensitivity. Periods of geopolitical uncertainty tend to increase volatility in equities, commodities, and currencies, and if disruptions persist, they can contribute to inflationary pressure and slower economic growth.

Several sectors face heightened exposure due to their proximity to Iran and their role as major economic and logistics hubs – particularly in the United Arab Emirates, Qatar, Oman, and Bahrain. Aviation and logistics centers in Dubai, Abu Dhabi, and Doha have experienced airspace restrictions, flight rerouting, and temporary operational disruptions (Schneider, 2026). Maritime shipping and port operations, especially in Oman and the UAE, face growing uncertainty as instability around the Strait of Hormuz raises costs and prompts shipping companies to reassess Gulf transit.

Financial and business centers such as Dubai, Doha, and Manama may encounter

operational challenges as multinational organizations evaluate employee safety and contingency planning. Tourism and hospitality across the Gulf are experiencing short-term volatility as travel demand responds to heightened regional security concerns. The BBC reported that flights were briefly grounded on March 16 following a fire near the airport caused by a drone-related incident, noting that Iran had directed more than 1,900 missiles and drones at the UAE since the onset of hostilities between the US, Israel, and Iran (Pomeroy, 2026). Even organizations not directly targeted by attacks may face indirect disruption as transportation networks adjust, governments implement tighter security measures, and corporate risk policies evolve.

How Birches Group Can Help

For employers operating in markets affected by this conflict, a Special Measures Policy provides a critical foundation for business continuity. This proactive, documented framework outlines specific, pre-approved, temporary actions an organization will take to support employees and sustain operations during a crisis—allowing compensation practices and HR protocols to adapt to rapidly changing circumstances.

Birches Group specializes in developing Special Measures policies tailored to high-risk environments. Our consultants bring deep understanding of crises and unforeseen events, particularly in developing markets, enabling us to craft solutions that account for present challenges, risks, and evolving uncertainties.

As a supplement to a Special Measures Policy, our Market Monitor—published monthly—keeps organizations informed of exchange rate movements and country-level volatility. Each edition includes recommendations on potential triggers and the measures organizations can take depending on the level of volatility observed.

The Path Forward

The long‑term trajectory of the 2026 Iran conflict remains uncertain. Military developments, diplomatic negotiations, and regional dynamics will continue to shape how the situation evolves in the months ahead.

For organizations operating in or connected to the Gulf, the central challenge is managing uncertainty while maintaining operational continuity. Businesses with exposure across the region will need to monitor developments closely as governments tighten security measures and companies reassess operational risk.

More broadly, the conflict highlights how geopolitical instability can disrupt global commerce—from transportation networks and travel patterns to investor confidence and corporate risk management. In an increasingly interconnected global economy, preparedness and adaptability are not merely prudent, they are essential to sustainable business leadership.

Contact us to learn more about developing a Special Measures Policy for your organization.

References

Lowell, H. (2026). US intelligence sees direct attacks by Iran on oil tankers as greater risk than mines. https://www.theguardian.com/world/2026/mar/11/attacks-iran-oil-tankers-strait-hormuz?

Bulos, N. (2026).  Iran’s threat to burn ships is choking off Persian Gulf oil flow to world. https://www.latimes.com/world-nation/story/2026-03-07/irans-threat-to-burn-ships-is-choking-off-persian-gulf-oil-flow-to-world

Tan, F. and Chow, E. (2026). Global oil and gas shipping costs surge as Iran vows to close Strait of Hormuz. https://www.reuters.com/world/middle-east/middle-east-oil-shipping-costs-surge-all-time-high-us-iran-conflict-intensifies-2026-03-02/

Schneider, F. (2026). The Costs of the Iran Conflict for the Gulf. https://mecouncil.org/blog_posts/the-costs-of-the-iran-conflict-for-the-gulf/

UN Trade and Development (2026). Hormuz shipping disruptions raise risks for energy, fertilizers and vulnerable economies. https://unctad.org/news/hormuz-shipping-disruptions-raise-risks-energy-fertilizers-and-vulnerable-economies     Pomeroy, G. (2026). Iran hits key UAE oil port and Dubai airport. https://www.bbc.com/news/articles/crl4gxgkkylo

Birches Group logo above a shield displaying "AICPA SOC 2 Type 2 Certified" and the AICPA SOC badge.

Birches Group is Now SOC 2 Type 2 Compliant

Written by Kai Donesa on . Posted in Uncategorized.

We are proud to announce that on May 20, 2025, Birches Group successfully achieved SOC 2 Type 2 compliance, marking a significant milestone in our ongoing commitment to data security, privacy, and operational excellence. This certification, awarded by an independent third-party auditor, builds on our previous SOC 2 Type 1 achievement and confirms that our security controls are not only well-designed but also operate effectively over time.

What is SOC 2 Type 2 Compliance?

SOC 2 (Service Organization Control 2) is an auditing standard developed by the American Institute of Certified Public Accountants (AICPA). While SOC 2 Type 1 evaluates the design of controls at a specific point in time, SOC 2 Type 2 goes further—assessing the operational effectiveness of those controls over an extended period. This certification validates that Birches Group consistently maintains the highest standards of security, confidentiality, and availability for our clients’ data.

Why SOC 2 Type 2 Matters

In today’s digital landscape, data security is not a one-time effort—it’s a continuous responsibility. As a trusted provider of HR management solutions, Birches Group understands the importance of safeguarding sensitive information. SOC 2 Type 2 compliance gives our clients added assurance that our systems are secure, reliable, and resilient over time. We want to thank our clients for their continued trust and support in Birches Group.

Key Highlights of the Certification:

  • Security: We continue to implement advanced safeguards to protect against unauthorized access and ensure data integrity.
  • Confidentiality: Our strict protocols ensure that sensitive client information remains protected and accessible only to authorized personnel.
  • Availability: Our systems are designed for reliability and uptime, ensuring consistent and uninterrupted service delivery.

“SOC 2 Type 2 certification is more than a badge—it’s a reflection of our long-term commitment to protecting our clients’ data and delivering dependable, secure HR solutions. It shows that our controls are not only well designed, but consistently effective over time.”

—Jeffrey Slater, Co-founder & Partner, Birches Group LLC

Next Steps and our Continuing Journey

SOC 2 Type 2 certification is the result of months of rigorous evaluation, continuous monitoring, and a company-wide dedication to best practices. But our journey doesn’t stop here. Birches Group remains committed to evolving our security posture, staying ahead of emerging threats, and delivering trusted, secure HR solutions to clients around the world.

For more information on SOC 2 Type 2 compliance or to request a copy of our report, please contact us.

equivalent worth

EQUITY IN ACTION: START BY ESTABLISHING EQUIVALENT WORTH

Written by Kai Donesa on . Posted in Resources.

In the first blog of our equity series, we showed that equity emphasizes fairness, consistency, and transparency in compensation. Now, we shift our focus to the practical steps organizations can take to translate the discussion surrounding equity into tangible action.  

Achieving equity in the workplace goes beyond good intentions and adhering to a set of principles. It hinges on establishing a clear, objective understanding of the equivalent worth of different jobs within your organization. This entails evaluating each role based on the purpose, responsibilities, and complexities inherent in the work. And that’s where the invaluable tool of job evaluation—a process for assessing and comparing jobs—comes in. 

The foundation: Job evaluation 

Job evaluation is a systematic process used to determine the equivalent worth of various jobs within an organization. It is the foundation for achieving equity. The process involves organizing and understanding the vast array of roles that make your company function, creating a clear picture of how they relate to each other.  

Why does job evaluation matter so much? Because it plays an essential role in establishing a fair and equitable workplace: 

  • Fair compensation. Job evaluation helps ensure employees are paid fairly for the work they do, based on the complexity, purpose, and responsibilities of their roles. 
  • Clear career progression. Clear career progression hinges on defining job hierarchies and relationships through job evaluation, which is critical for determining the appropriate job level. This establishes a transparent framework for career progression. Staff can then understand how their current roles fit into the bigger picture and can tailor a roadmap for the steps they can take to grow within your organization. 
  • Equity and fairness. Job evaluation helps identify potential equity issues, such as pay disparities between similar roles. A fair and equitable workplace recognizes employees who contribute and deliver more to their jobs and the organization. Staff who contribute more through their growth in skills and knowledge, even if they are in the same job grade, can be recognized through higher pay within the range. 
  • Objective benchmarking. Job evaluation enables organizations to fairly compare their compensation program against the wider labor market.

The cornerstone: Establishing equivalent worth 

Job evaluation isn’t simply about ranking jobs from “highest” to “lowest.” It’s about understanding the value different roles bring to fulfill your organization’s mission. It provides a common language to discuss the complexity and impact of various roles, fostering better understanding across departments and teams. 

Moreover, job evaluation provides a structured and justifiable approach to determining and managing compensation, ensuring internal equity, helping your organization comply with pay equity laws, and showing a strong commitment to fair treatment for all employees. 

Bringing clarity: Hierarchical relationships 

Job evaluation establishes a hierarchy of roles within your organization, informing the creation of job grades and salary ranges. This is a critical step towards achieving equity, as it brings a structured approach to your compensation program.  

Similar roles, based on their inherent value to the organization, are grouped together. These groups are then assigned specific pay ranges, ensuring that employees performing work of similar complexity receive comparable compensation, regardless of their occupation, tenure, or background.  

A structured approach to compensation management fosters a sense of internal cohesion and transparency and promotes trust in the compensation program. Establishing hierarchical relationships helps staff understand how their pay is determined and relates to other roles in the organization, reducing the potential for misunderstandings and perceptions of inequity. 

Birches Group’s job evaluation approach 

At Birches Group, we understand that traditional job evaluation methods can be complex and time-consuming. That’s why we’ve developed a unique approach that considers only three factors: 

  • Purpose: Why does this job exist within the organization?
  • Engagement: How does this job communicate and collaborate with internal and external stakeholders to carry out its function? 
  •  Delivery: How does this job plan, organize, and deliver work to fulfill the organization’s mission? 

Our approach is simple, consistent, and easy to understand. It focuses on the complexity and impact of the work itself, rather than just job titles or vague descriptions. This ensures a comprehensive and accurate assessment of job complexity, enabling you to make informed decisions about compensation.

The journey to equity continues 

Job evaluation is the essential first step toward building a compensation structure that is fair, transparent, and competitive. Birches Group’s job evaluation approach provides a clear, unbiased path to establishing equivalent worth for every role within your organization. 

In our upcoming blog post, we’ll explore the next critical step: building a grading structure that aligns with your job evaluation assessments and organizational needs. In the meantime, we invite you to schedule a call with our experts to discuss your job evaluation needs and challenges.  

Carla is a part-time copywriter on our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

achieving equity

EQUITY IN ACTION: INTRODUCING OUR FIVE-STEP APPROACH TO ACHIEVING WORKPLACE EQUITY

Written by Kai Donesa on . Posted in Resources.

Equity has become a central conversation point in human resources (HR). But it’s no longer enough to simply talk about the importance of a fair and just workplace—the demand for concrete action is stronger than ever. Organizations are now being held accountable for putting those ideals into action. And while the importance of achieving equity is widely acknowledged, many organizations struggle to put discussions and understanding into action.

The challenge lies in the lack of a clear roadmap. Often, organizations don’t have a solid framework and the necessary tools to address equity concerns. This can lead to ad hoc approaches that yield inconsistent results and unfair outcomes.

At Birches Group, we understand organizations’ challenges in embracing and attaining equity. That’s why we’ve developed a comprehensive five-step approach to achieve equity in compensation management.

In this blog series on equity, we’ll be introducing our five-step approach to achieving equity. We’ll explore each step, equipping you with the framework and tools you need to move beyond rhetoric and create a more equitable workplace. Discover how to transform equity from a buzzword into a reality within your organization.

The problem of inequity

Inequity within an organization’s compensation structure is a persistent issue with far-reaching consequences. It demotivates staff, creates a sense of unfairness, and ultimately hinders an organization’s ability to attract and retain top talent. Here are some of the most common examples of inequity we see:

  • The gender pay gap. Women, on average, continue to earn significantly less than men for comparable work.
  • Locale-based pay inconsistencies. Employees performing the same job in different locations can receive significantly different salaries based solely on geography.
  • Occupation-based pay biases. Certain occupations may be systematically over or undervalued compared to others.

Unfortunately, traditional pay practices have often fallen short, exacerbating equity issues:

  • Using salary history when setting starting salaries. This perpetuates existing pay gaps by anchoring starting salaries to potentially biased historical data.
  • Determining pay increases based solely on time or tenure. By simply rewarding staff for the time spent at an organization, organizations may be overlooking employee performance or the value the staff brings to their role.
  • Relying solely on “pay for performance.” While performance should be a factor, this can be subjective and susceptible to bias. Another reason “pay for performance” shouldn’t be used is because staff performance isn’t always a consistent measure year after year.
  • Differentiating pay based on occupation instead of job grade level. Some organizations believe certain functions or occupations (such as IT) should be paid higher because they’re considered “hot jobs.” However, salaries must be examined based on the job’s grade level within a salary scale.
  • Ad hoc succession planning. When promotions and development opportunities are determined subjectively by managers, it can perpetuate personal biases.

These traditional approaches are often reactive and fail to address the root causes of inequity. 

As more states and countries enact pay transparency laws, organizations need a framework and tools not only for ethical reasons, but also for legal compliance and building a truly equitable workplace.  

The Birches Group approach

At Birches Group, we understand that achieving workplace equity requires a clear, objective, and systematic approach. We believe that fair compensation isn’t just about salary numbers; it’s about ensuring that every employee feels valued and recognized for their contributions.

Our framework: building a foundation of fairness

Our framework is built on the fundamental principle of establishing the equivalent worth of each job within your organization. This is achieved through a consistent job evaluation process that considers the skills, knowledge, and responsibilities required for each role.

When organizations have a standardized method to objectively assess jobs across different grades and units, it becomes the cornerstone for aligning other HR functions. This includes job design, salary benchmarking, recruitment, pay movement, and performance evaluations.

Steps toward an equitable compensation program

Here is how our five-step approach works:

  • Start by establishing equivalent worth. Begin by conducting a comprehensive job evaluation that accurately assesses the complexity and value of different roles within your organization. This evaluation process will create a clear hierarchy of positions, setting the stage for the next step.
  • Establish a grading structure. Once the distinctions between roles are established, develop a structured grading system to categorize them effectively. This grading structure will become the backbone of your compensation strategy.
  • Utilize salary surveys. Leverage the job evaluation and grading structure to conduct a thorough analysis of external market conditions through salary surveys. Our extensive database of compensation and benefits surveys spanning over 150 countries provides valuable insights for benchmarking against sectors.
  • Develop pay ranges. Establish well-defined pay ranges for each grade, ensuring they align with your internal job evaluations and external market data. This ensures that compensation is both externally competitive and internally equitable and sensible.
  • Implement fair pay management mechanisms. With the job evaluation, grading structure, and pay ranges in place, it’s time to implement a transparent and equitable system to manage employee progression within these ranges. This includes clear criteria for promotions, raises, and bonuses, all based on objective and well-defined skill stages and expectations.

We emphasize consistent and precise methods for evaluating jobs, managing salaries, and assessing staff performance. This ensures that everyone has the same opportunities for advancement and is evaluated based on the same objective criteria.

What sets Birches Group apart

What truly sets Birches Group apart is our focus on:

  • Skills-based compensation. We move beyond traditional approaches that rely on tenure or subjective performance evaluations. Our framework recognizes employees for the skills and knowledge they bring to the table.
  • Data-driven transparency. We use our compensation and benefits surveys of over 150 countries to help organizations inform their pay strategies based on comprehensive labor market information, ensuring that compensation decisions are fair, objective, and defensible.

What’s next

Achieving equity in the workplace isn’t just a moral imperative; it’s a strategic advantage. The Birches Group approach offers a precise and data-driven framework for building a compensation system that rewards contributions.

Stay tuned for the next installment of this blog series on equity, where we’ll explore key aspects of our five-step approach in detail. With our insights and tools, learn how to transform your compensation practices and other HR programs to achieve lasting equity within your organization.

If you’re ready to see what equity can look like for your organization, schedule a call with our team.

Carla is a part-time copywriter on our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

High Inflation

ON THE HORIZON: INFLATION PROJECTIONS FOR 2024 ACROSS THE GLOBE

Written by Kai Donesa on . Posted in Resources.

Inflation has dominated economic conversations in recent years. As we approach the second half of 2024, this bulletin offers insights into what to expect on the inflation front worldwide. To help you prepare for the next few months, we’ll explore expert projections, examine critical trends, and discuss the potential implications for organizations. 

Global inflation is on the downturn, but not out 

After years of historically high inflation, many analysts are cautiously optimistic about 2024. Inflation has been cooling worldwide, raising hopes of a soft landing this year. While the sting of rising prices may not vanish entirely, major institutions forecast that the global inflation rate is on a gradual downward slope.  

The International Monetary Fund (IMF) predicts global headline inflation to fall to 5.9% in 2024, down from an estimated 6.8% in 2023. This decline is attributed to various factors, including easing supply chain pressures and higher interest rates. 

But the path to price stability may be bumpy. JP Morgan economists warn that core inflation, which excludes volatile food and energy prices, could remain sticky at around 3% globally in 2024.  

Overall, inflation will likely ease faster than expected. While it is estimated to remain above pre-pandemic levels, a significant decrease from 2023 is anticipated.  

It is important to note that the global average masks significant differences between countries and regions. Advanced economies are expected to see faster disinflation, with inflation falling by 2.0 percentage points to 2.6%. For emerging and developing economies, inflation is projected to decline by just 0.3 percentage points to 8.1%. 

High-inflation economies 

While growth remains a priority, high inflation will be a pressing concern for many countries in 2024. The IMF has identified 20 economies across regions likely to experience significant price increases. 

Many of the world’s highest-inflation economies are concentrated in Sub-Saharan Africa, the Middle East, and Central Asia. This vulnerability can be attributed to dependence on volatile commodity prices, conflicts disrupting supply chains, and currency depreciation. These issues create a perfect storm for rising prices, squeezing household budgets and hindering economic stability. 

Three volatile economies to monitor 

Some economies face a delicate balancing act. It’s crucial to keep an eye on developments in Venezuela, Zimbabwe, and Sudan, which are projected to have the highest percentage change in annual inflation this year. The potential for significant volatility in these economies is high. 

Venezuela 

230% inflation, widespread dollarization, US oil industry sanctions 

Venezuela, a Latin American country rich in oil reserves, faces a projected inflation rate of 230%—the highest in the world. But, according to El Pais, experts believe inflation in Venezuela is on a downward trend. In April 2024, the IMF notably lowered its projected inflation rate in Venezuela to 160%.  

Capital Economics reports that several factors are behind Venezuela’s inflation plunge. These factors include widespread dollarization, steps to liberalize the economy, a rise in oil exports, and an easing of US sanctions on the oil industry since October 2023. 

However, Venezuela’s economic outlook in the near term depends on whether US sanctions (for repressing political opposition and alleged criminal activity) are further relaxed or reimposed in April 2024. 

What does our market monitoring reveal? 

Our 2024 Market Monitor reports paint a picture of Venezuela navigating a volatile market. The reports consistently place the Latin American nation at Level Five on a six-level volatility scale. 

Level Five signifies a labor market that heavily uses hard currencies. Salaries are widely denominated in US Dollars or Euros, and staff can legally hold bank accounts in these currencies. This dollarization protects against inflation but highlights Venezuela’s challenges in stabilizing the Bolivar, its local currency.

What steps do we recommend? 

Given Venezuela’s status at Level Five on our Market Monitor, we recognize the challenges faced by organizations operating in the country. Our salary surveys also show that employers have adopted the practice of denominating salaries in US Dollars or Euros, reflecting a lack of confidence in the Venezuelan Bolivar. 

In countries with Level Five volatility, the solution often sought is to change the local currency scale into one denominated in a major hard convertible currency. While this might seem straightforward, many factors must be considered before making such a big switch. 

The most significant factor is assessing the prevailing labor market conditions. This involves evaluating the usefulness of local money in daily life. Is the local currency still primarily used for trading goods and services? If so, every effort should be made to maintain a pay structure based on local currency and to monitor and update this pay structure actively. 

Zimbabwe 

190.2% inflation, currency depreciation, newly introduced currency 

Zimbabwe, a nation in Sub-Saharan Africa with immense mining potential, has been overshadowed by a persistent struggle with high inflation and currency devaluation. 

The IMF projects Zimbabwe’s inflation rate to reach 190.2%. In April 2024, this forecast was significantly adjusted to 602.6%. According to Lloyds Bank’s International Trade Portal, inflation increased amidst currency depreciation, worsened by the scarcity of foreign currency in the country.  

Economists note that Zimbabwe’s financial woes are deeply entrenched. Over the years, Zimbabwe has grappled with currency instability, introducing various currencies. Abandoned in 2009 and reintroduced a decade later as the Real Time Gross Settlement Dollar, the Zimbabwean Dollar, lost over 70% of its value on the official foreign exchange market since January 2024, making it one of the world’s worst-performing currencies, according to Associated Press. In addition, the US Dollar is used in more than 80% of transactions and is favored over the volatile Zimbabwean Dollar.  

A recent development to watch is the introduction of the Zimbabwe Gold (ZiG), the country’s sixth attempt at a new currency since 2008. Launched in April 2024, the ZiG replaces the Zimbabwean Dollar to combat high inflation and restore confidence in the financial system. However, its effectiveness in curbing inflation is yet to be seen. 

What does our market monitoring reveal? 

Our monitoring of the Zimbabwean labor market and foreign exchange rates in recent months reveals a vital feature of the economy: dollarization. This is reflected in the country’s consistent ranking at Level Five on our volatility scale. 

Foreign currencies, such as the US Dollar and Euro, are widely used at this level. Salaries are commonly denominated in these currencies, and staff can legally hold Dollar or Euro bank accounts. 

What steps do we recommend? 

Zimbabwe’s Level Five status on our Market Monitor presents challenges similar to Venezuela’s. Our recent salary surveys show a widespread shift towards US Dollar-denominated salaries, highlighting the declining trust in the local currency. 

A Level Five designation signifies a highly volatile labor market, often prompting organizations to consider a switch to a hard currency like the US Dollar. However, such a transition requires careful consideration of several factors. 

The most critical factor is the usability of the local currency in daily transactions. Does it remain the primary currency for buying goods and services? If so, prioritizing a pay structure based on the local currency with regular monitoring and adjustments is vital. 

Sudan 

127.3% inflation, currency depreciation, continuing armed conflict 

Sudan, a country situated in Sub-Saharan Africa, has long been an agricultural hub. Additionally, the nation is endowed with natural resources, including gold and oil, which hold significant economic potential. 

The IMF projects Sudan to face an inflation rate of 127.3% in 2024. In April this year, this projection was slightly decreased to 114.6%. This severe inflation is driven by multiple factors, including political instability, economic mismanagement, and the depreciating value of the Sudanese Pound by at least 50%.  

The primary driver of Sudan’s inflationary spiral is the power struggle between Sudan’s two leading generals and their respective military factions since April 2023. This conflict has led to widespread instability, severely hampering economic activities and disrupting supply chains.  

What does our market monitoring reveal? 

Our monitoring of foreign exchange rates in Sudan reveals a volatile economic environment. In early January 2024, the market was characterized by rapidly evolving conditions at Level Three, indicating significant exchange rate movements of over 40% within six months. This suggested that the Sudanese pound was already experiencing notable fluctuations. 

By January 15, the conditions had shifted to Level Four, signaling a sudden, unexpected social or economic event. The currency underwent severe devaluation of 50% or more within six months, reflecting a drastic and rapid decline in the Sudanese pound’s value. Responses from salary survey comparators in Sudan have also been disjointed and unclear, reflecting a chaotic economic environment with no clear or consistent strategy to address the crisis. 

What steps do we recommend? 

Organizations operating in Sudan should monitor economic indicators closely, particularly currency devaluation. Over the past six months, Sudan’s currency devaluation has reached 65.1%. Nevertheless, many organizations still denominate salaries in the local currency.  

It is critical to regularly review salaries to manage them effectively in volatile environments like Sudan. Using data from the latest Sudan salary survey, organizations should create a focused group of comparators that includes market leaders in salary practices, employers with adaptable pay policies, and companies that predominantly pay salaries in the Sudanese Pound. 

Lastly, update your organization’s salary scales three times a year based on your focused group of comparators. This approach involves trimestral adjustments to the pay scale, forecasting currency movements for the upcoming quarter, and implementing a stabilization allowance alongside the revised salaries. 

How Birches Group’s Market Monitor can help 

Stay informed about volatile economies worldwide and identify potential disruptions before they escalate. Sign up to receive our Market Monitor, a PDF report delivered to your inbox every two weeks. Our team examines labor market conditions and economic indicators across over 150 countries, helping you spot countries that require closer attention.  

Get your free copy of the Market Monitor today, available in English, Spanish, and French. 

Reach out to Birches Group today 

Does your organization have a Special Measures Policy for unforeseen events like hyperinflation? Crafting such a policy requires expertise. Our consultants can guide you through the process, ensuring your policy is effective. Contact us to discuss your specific needs and get started on creating a Special Measures Policy that fits the local conditions of your markets. 

Carla is a part-time copywriter on our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

Cost of Labor

WHY COST OF LABOR SHOULD GUIDE YOUR COMPENSATION

Written by Kai Donesa on . Posted in Resources.

Ensuring fair staff compensation can be a delicate tightrope walk for organizations. As a labor market leader, your organization wants to attract and retain top-tier talent while staying within the defined compensation budget. 

Human resources leaders use a range of factors to set and adjust pay. The two most common factors guiding compensation strategies are the cost of labor or the cost of living. The cost of labor reflects the market value of a specific job. In contrast, the cost of living reflects the expenses that staff need to support a particular standard of living in a given location.  

There is an ongoing debate about which factor should hold more weight. Should you base your salary on the market’s value for a role (cost of labor), or should one’s civil status and standard of living dictate pay (cost of living)? 

This blog post argues that your staff compensation strategies must be guided by the cost of labor for a fairer and more sustainable approach. Let’s explore why the cost of living is an unreliable benchmark and, more importantly, why the cost of labor should take center stage.  

Why the cost of living is unreliable 

Some organizations use the cost of living for setting salaries. However, it falls short of achieving fairness. Here are a few reasons why relying on the cost of living can be misleading: 

Outdated and flawed. While traditionally used to adjust salaries, the cost of living is heavily influenced by individual circumstances, making it an unreliable measure. Factors like civil status, number of dependents, and spending habits can significantly affect an individual’s cost of living. Basing salaries solely on the cost of living doesn’t reflect the actual value of the job in the labor market.  

Location bias. Using the cost of living creates a geographical bias. But location shouldn’t dictate a job’s worth. A highly skilled monitoring specialist in a field office might be paid significantly less than a less-experienced colleague at the country headquarters simply because of where they work.  

Challenges in defining the cost of living. Defining a fair and accurate cost of living presents a challenge. Unlike a fixed measure, it varies significantly between individuals. The amount needed to live comfortably can differ greatly from person to person. Even within the same country, people can have vastly different spending habits and consumption choices, making a single standard impossible.  

Unrelated to the job. The primary purpose of compensation is to pay staff in exchange for their services. But the cost of living focuses on personal circumstances unrelated to the job’s purpose. It does not dictate how much a job is worth in the labor market, so why use it to determine salaries? 

A shift in perspective 

Employers must remember that it is not their responsibility to maintain their staff’s lifestyle. While a competitive salary should allow staff to afford a decent standard of living, individual choices and financial situations significantly affect that equation.  

Better yet, focusing on the cost of labor ensures clarity and transparency. You communicate your compensation policy and how much you’re willing to pay for roles in your target markets.  

Why the cost of labor matters 

Although the cost of living seems like a compassionate way to structure salaries, it doesn’t build a fair and sustainable compensation program. Here’s why focusing on the cost of labor is the better, and often the only, approach that matters: 

Objectivity and transparency 

Donor justification. For nonprofits relying on donor funding, the cost of labor provides precise, objective data for justifying salaries. Donors expect the responsible use of funds, and using the cost of labor as a benchmark shows that salaries are based on labor market value. The cost of living offers little justification in this scenario. 

Reaching the right talent. Attracting the right talent with the right skills in the private sector requires understanding market value. By understanding salary trends and compensation practices for roles and grade levels in their target markets, organizations can craft competitive offers. 

Sustainability 

Clear and job-based: The cost of labor focuses on the value of the job itself. It considers market data for positions of equivalent worth, ensuring fairness and clarity in attracting and retaining the talent that you need. 

Informed decisions and budget alignment. By understanding your compensation costs through the lens of the cost of labor, you can make better-informed decisions that align with your budget and brand identity within the labor market. Focusing on the cost of labor also allows for more strategic adjustments during economic downturns or periods of social unrest, fostering long-term sustainability. 

In conclusion 

We recommend setting salaries using the cost of labor—how much other employers in the labor market pay for the same or similar roles. This approach involves setting pay based on labor market survey data grounded on simple and clear job evaluation, which moves quite independently of the cost of living and is impacted by supply and demand in the labor market. 

Get in touch with Birches Group  

Basing salaries on the cost of labor is a crucial feature of a well-designed compensation framework, but it’s only the beginning. Another feature is credible market data, such as salary surveys, to help assess your position in the market. 

Stay on top of labor market trends. Access our comprehensive salary surveys and use our data to make informed compensation decisions. We publish updated labor market data three times a year in over 150 countries, making sure you have the most current information for your talent management needs. 

Contact Birches Group today to learn about our salary surveys and how they can benefit your organization. 

Carla is a part-time copywriter on our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

Close-up of a police officer holding a riot shield among a crowd of civilians. The shield has the word "POLICE" written on it. The ground is partially visible, with some debris scattered.

Haiti at a Standstill: What to Know About the Escalating Gang Violence in the Capital

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group monitors the world’s most dynamic labor markets, keeping you informed about critical trends and developments gaining significant media attention.  

Port-au-Prince is in a state of paralysis as Haiti gang violence spirals out of control. This eruption of chaos has led to the resignation of Prime Minister Ariel Henry in the face of mounting pressure.  

With a power vacuum now in place, the gangs are expanding their influence in Port-au-Prince and fighting for control of the city. Yet, the future of Haiti’s government appears increasingly uncertain. As a result, Haitians are grappling with the immediate dangers and the long-term question of who will guide the Caribbean nation out of the crisis. 

What is happening in Haiti? 

On the week of 29 February 2024, armed gangs in Port-au-Prince attacked two of Haiti’s largest prisons and other key infrastructure. More than 3,800 inmates have fled, and the gangs have openly tried to assert political control in the country. This recent escalation of Haiti gang violence unfolded after Henry left the country on a trip to Kenya to seek support in combating Haiti’s long-standing gang problem.  

Gang leaders took advantage of Henry’s travel to seize control of the capital. The gangs attacked police stations and the international airport, preventing the Prime Minister from returning. Its most visible leader, Jimmy Chérizier, has called on Haiti’s many criminal groups to join forces and overthrow Henry’s government. 

After two weeks of continuous violence back home, Henry announced in Puerto Rico on 12 March 2024 that he would resign as soon as a transitional presidential council was formed. However, Henry remains unable to return to Haiti, and creating the council requires careful consideration and planning. 

According to United Nations (UN) officials, about 80% of Port-au-Prince and the surrounding region is now under gang control. Furthermore, UN reports estimate that 5.5 million people—nearly half of Haiti’s population—need humanitarian aid.  

How is the crisis affecting humanitarian groups? 

What is clear is that Haiti’s new surge of unrest is causing a dramatic increase in the country’s humanitarian needs, displacing tens of thousands. 

The escalating Haiti gang violence in Port-au-Prince has created a nightmarish situation for humanitarian groups trying to deliver aid. Restricted movement and fierce clashes have severely disrupted the flow of essential supplies, including food, water, and medicine. 

Caught in the crossfire. Beyond the logistical challenges, aid groups face the constant threat of violence. Staff members are forced to navigate volatile areas controlled by gangs, putting their safety at risk. 

The path forward. The immediate focus is restoring security and facilitating the safe passage of aid workers so they can respond swiftly to the deepening crisis. Analysts and observers agree that collaboration between Haitian authorities, international organizations, and local nonprofits is vital to setting up secure aid corridors. 

The long road to recovery. The long-term consequences of this crisis on development and humanitarian efforts are a growing concern. Disruptions to aid delivery will worsen existing issues like poverty and malnutrition. 

How are the Haitian government and the international community responding to the crisis? 

In response to the increased violence, the Haitian government declared a state of emergency on 3 March 2024. Nighttime curfews are also being enforced in some areas to “take appropriate measures in order to regain control of the situation.” Additionally, the government has deployed more police forces. However, these efforts have been largely ineffective against heavily armed gangs. 

The international community has expressed deep concern over the rapidly deteriorating situation in Haiti. UN Secretary-General Antonio Guterres emphasized the urgency of addressing the crisis. Specifically, he called for increased financial support for the UN-authorized multinational security mission, which is critical to restoring stability in the nation. 

How Birches Group can help 

The current turmoil in Haiti highlights the importance of having a Special Measures Policy. This type of policy allows your organization to adapt its human resources strategies even when faced with unforeseen events. A well-crafted Special Measures Policy includes triggers and immediate responses to cushion the effects of crises on staff while assessing market movement in succeeding months.  

Don’t wait for a crisis to happen—take a proactive approach. Birches Group can help you develop a Special Measures Policy today. Our expert guidance will address your needs, ensuring your organization continues functioning amid social unrest. By taking this critical step, your organization stays resilient in an ever-changing world. Contact Birches Group today. 

While this headline article was written in mid-March 2024, Haiti’s social unrest and political crisis are rapidly evolving. The information presented, including statistics and events, reflects the understanding at the time of writing. 

References 

regularly participating in salary surveys

WHY REGULARLY PARTICIPATING IN SALARY SURVEYS IS VITAL FOR YOUR ORGANIZATION

Written by Kai Donesa on . Posted in Resources.

Setting competitive pay is not a guessing game—it is a strategy. But without up-to-date labor market data, you risk underpaying or overpaying talent, breeding resentment, or draining resources.  

Salary surveys are your guideposts. These tools unveil market trends, helping you set fair and informed compensation that attracts top talent, boosts morale, and builds a stellar employer brand. Regularly participating in salary surveys gives you a bird’s-eye view of the labor market—a broader perspective to make informed pay decisions. 

Invest in fairness and data-driven pay practices by joining salary surveys every year. Participating annually—even if your organization is not yet due for a salary review—keeps you on top of labor market trends. Taking part every year also allows you to budget accordingly when salaries are due for updating.  

Gain insights into competitive pay practices and secure your place as an employer of choice. This blog post will guide you through the importance of salary surveys and the benefits of regular participation. Let us map your organization’s path to compensation clarity. 

Understanding salary surveys

Before we go into the benefits, let us demystify the concept. 

Salary surveys capture compensation trends across sectors or labor markets. Such surveys collect data on a range of factors—including base salary, bonuses, and benefits—and analyze them to reveal valuable benchmarks for different roles and job grade levels. 

The information gleaned from these surveys is invaluable, as it helps your organization know its standing in the market and make the necessary adjustments to its compensation strategy. 

Regularly participating in salary surveys also ensures your data is always current. It helps you stay in tune with market trends and react promptly to changes. Furthermore, it provides a holistic view of the sector’s compensation landscape, enabling your organization to develop a comprehensive and competitive compensation strategy. 

Using salary surveys effectively 

To effectively use data from salary surveys, take a step back and ask a crucial question: “Who are we as an employer?”. The answer shapes your Employee Value Proposition (EVP) and defines your unique position in the labor market. It encompasses two key aspects: 

  1. Target market composition. Who are your competitors for talent? Identify companies of similar size, industry, and market to serve as relevant comparators in your surveys. 
  1. Target market position. Where do you want to stand in terms of salary competitiveness? Do you aim to be at the market average, attract top talent with higher pay, or be cost-conscious with a lower-than-average position? 

Remember, salary surveys are a compass. They offer valuable data, but your compensation policy drives your decisions. 

  1. Consistent criteria for comparators. Use the same factors to select comparators every time, ensuring accurate and reliable comparisons. 
  1. Finding your sweet spot. Define your target percentile based on your EVP. Do you want to be in the top 10% for attracting high performers, or are you comfortable with the median to control costs?  
  1. EVP alignment. Design your compensation practices to reflect your EVP, offering benefits and pay structures that resonate with your desired talent pool.  
  1. Market-aware adjustments. Stay informed about market trends and competitor offerings revealed by salary surveys. Use this data to make informed adjustments to your compensation package, including base salary, bonuses, and benefits. 

Ultimately, your compensation budget and target market position are the driving forces behind your pay structure. Salary surveys act as a valuable tool to calibrate your offerings, stay competitive, and attract the talent you need. 

Reaping the rewards of regular participation 

Participating in salary surveys is not just a box to check; it is an investment in your organization’s success. Frequently taking part in salary surveys offers a wealth of benefits: 

Competitive benchmarking 

Stay competitive in the labor market by understanding how your compensation stacks up against the best. By regularly participating in salary surveys, you can: 

  • Find any gaps. Once you determine how competitive you want to be in your chosen market position, surveys can help point out areas where your compensation falls short, allowing you to adjust your organization’s strategies. 
  • Know your market position. Understand how your salaries compare to sector averages and market leaders. Are you leading the pack or falling behind? 
  • Stay ahead of the curve. Predict compensation (salary and benefits) trends and proactively adjust your total compensation packages to keep top talent and attract recruits. 

By using the insights from salary surveys, you can ensure your organization remains an attractive employer, allowing you to win the war for talent. 

Equity and fairness 

Regularly taking part in salary surveys helps promote pay equity and fairness. By taking advantage of salary surveys, you can: 

  • Bridge the pay gap. Equity is ensuring you pay for the role and not the person. Eliminate pay discrepancies and ensure internal equity. Use salary survey data rather than the person’s pay history to inform compensation management policies, building a workplace where everyone is rewarded fairly. 
  • Craft a more equitable structure. Use data-driven insights to adjust your salary scale, ensuring fairness and alignment with industry standards. 
  • Build trust and transparency. Open communication and data-backed pay decisions foster a culture of trust and respect, leading to a more positive work environment. 

Investing in salary surveys is an investment in your staff and your organization’s success. By ensuring fair and transparent compensation, you can build a more motivated, engaged, and inclusive workforce, driving positive outcomes for everyone. 

Informed compensation decisions 

Salary surveys, far from being data dumps, can be your secret to building a winning human resources strategy that attracts, retains, and unlocks the full potential of your workforce.  

Joining salary surveys every year can improve your compensation practices by enabling you to look beyond the numbers. While salary is essential, salary surveys can help you assess what employees value—flexible work arrangements, learning and development opportunities, and recognition and reward programs.  

Design compensation packages that go beyond the paycheck. While compensation is the biggest draw, in some markets, having the right benefits can also help keep your competitive edge.   

Salary surveys are a treasure trove of insights and analysis waiting to be unlocked. You can build a compensation strategy that attracts and keeps top talent by harnessing their power. 

Attract and retain top talent 

Attracting and keeping staff needs a data-driven, strategic approach. Gone are the days of generic offers and one-size-fits-all solutions. Organizations must cultivate a compelling employer value proposition that resonates with skilled talent.  

  • Become an employer of choice. Offering competitive salaries and attractive benefits packages, informed by reliable survey data, makes you a magnet for top talent, enhancing your employer brand and reputation.  
  • Tailor your strategies. Use survey insights to understand your target audience’s compensation expectations and tailor your recruitment and retention strategies accordingly.  
  • Predict and prevent turnover. Find potential risks by comparing your packages to what market leaders offer for similar roles. Adjusting based on the latest data can keep your employees engaged and committed. 

Leveraging robust salary surveys is not just a good practice; it is a competitive advantage. Understanding market rates empowers you to craft compelling compensation packages that attract target candidates and ensure internal equity. The result? Increased employee satisfaction, reduced turnover, and a more dynamic workforce. 

From insights to action 

Regular participation in salary surveys empowers you to make informed compensation decisions, attract and retain top talent, and cultivate a healthy, high-performing organization. Do not miss out on this invaluable resource. Birches Group provides labor market data in over 150 countries, and we are here to help. Register for our comprehensive salary surveys today and secure your organization’s future success or get in touch with us to learn more. 

Carla is a part-time copywriter on our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

From Power Struggles to People’s Plight: The True Cost of Myanmar’s Power Play 

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group closely monitors labor markets that are making headlines worldwide, keeping you updated on trends and developments. 

In Myanmar, a Southeast Asian nation brimming with hope for democracy, a brutal reality continues to grip the country. A February 2021 military coup d’état overthrew opposition leader Aung San Suu Kyi and her elected government—returning Myanmar to authoritarian rule, shattering years of progress toward democracy, and plunging the country into a relentless power struggle. 

While the world’s attention has focused on the political turmoil, mass displacement, and human rights abuses, another tragedy unfolds. Three years into military rule, the junta has once again extended the state of emergency for another six months. Sadly, Myanmar’s people continue to endure the worst of the crisis. 

This headline article goes beneath the surface of violence and unrest in Myanmar, exploring how the coup has devastated the country’s economy. 

Shifting tactics: Junta faces renewed resistance 

Since seizing power in February 2021, Myanmar’s military junta has faced unwavering opposition. The Global Center for the Responsibility to Protect reports that hundreds of thousands of citizens have joined peaceful protests and strikes against military rule. The International Crisis Group also reports, “Some of the country’s ethnic armed groups have gone on the offensive, and new forms of armed resistance by civilian militias and underground networks have emerged.” 

The past five months have seen a shift in both the military’s tactics and the nature of resistance. The government has been rapidly losing ground to rebel forces in several regions of Myanmar. In late October 2023, an alliance of three ethnic armed groups launched a coordinated attack against the regime, posing the strongest challenge since the 2021 coup. 

Reuters reports that Myanmar’s junta is now “facing the fiercest threat to its power since seizing control.” Collective campaigns targeting the military have emerged across the country, and the military’s control has been shaken, its resources strained, and the morale of its soldiers undermined. 

As it battles an unprecedented alliance of opponents while being weakened by internal dissent and defections, the military regime has escalated its crackdown on civilians. The junta has stepped up its increasingly brutal methods like mass arrests, forced displacements, and aerial bombardments. 

Analysts from the United States Institute of Peace, however, say that “There is simply no way back for an enfeebled and stretched junta that is rapidly losing its ability to control the public. Its airstrikes and arson attacks on civilian populations have only served to deepen the public’s commitment to resist.” 

This interplay between shifting tactics and renewed resistance paints a grim picture of Myanmar’s current situation, where the cost of the power struggle is borne by the increasingly desperate civilian population. Amid the escalation of the fighting, the United Nations (UN) reports that over 2.5 million people have been displaced by the armed conflicts. 

Yun Sun, a nonresident fellow of the Brookings Institution, comments, “Some Myanmar watchers believe that the balance of power may shift sufficiently to change the tides within the country or the military government.” Even though there have been some significant and strategic gains for ethnic armed organizations who have been working with increased cooperation, the conflict is ongoing with no obvious end in sight, says the UN Office for the Coordination of Humanitarian Affairs (UN OCHA) in its Myanmar Humanitarian Needs and Response Plan for 2024. The Economist Intelligence Unit further notes that while “the junta’s control has weakened substantially and now controls about 30-40% of Myanmar’s territory, it is unlikely to fall.” 

Kyat in crisis: Currency devaluation and eroding purchasing power 

The situation in Myanmar, fueled by the military junta’s desire to maintain power, has triggered a domino effect of consequences affecting the lives of citizens. The political turmoil has translated into a harsh reality of economic hardship, social unrest, and deepening poverty. 

Sanctions imposed by the international community, aimed at pressuring the junta, have crippled Myanmar’s financial system. Some countries have also suspended development funds and imposed embargoes, among other measures. While intended to isolate the military regime, these sanctions have choked the local economy. 

The World Bank notes that Myanmar’s economy has shrunk since the COVID-19 pandemic and the military coup, with economic activity remaining weak and constrained. In fact, it estimates the economy in 2023 to be 30% smaller than it might have been in the absence of the pandemic and coup. 

Trade and investment have dwindled. In its investment climate statement on the country, the United States (US) Department of State says, “The regime’s ongoing violence, repression, and economic mismanagement have significantly reduced Burma’s commercial activity.” 

The US State Department expounds that the Central Bank of Myanmar “has imposed severe foreign exchange restrictions that limit commercial activity and severely limits access to US dollars.” In its most recent economic monitor, the World Bank notes the presence of multiple exchange rates and a widening gap between the official and parallel market rates. 

Rising inflation adds another layer of hardship. Inflation and conflict are driving up the prices of essential goods, such as food and fuel, leaving vulnerable households in distress, says the UN OCHA in its January 2024 update on Myanmar. Additionally, a recent World Bank survey found that about half of the surveyed households reported a decrease in income over the past year. Oxfam adds that over 20% of the population still lives below the poverty line, pushing people at risk deeper into desperation. 

What our Market Monitor reveals 

In the wake of Myanmar’s ongoing political turmoil, concerns arise about its impact on the labor market. To understand this complex and multi-layered issue, we reviewed data from our Market Monitor reports for the past six months. Looking back at the period between 1 August 2023 and 1 February 2024, we wanted to shed light on how the crisis is affecting Myanmar’s labor market. 

Our Market Monitor reports show a significant increase in volatility and exchange rate movement since 1 December 2023, when Myanmar reentered our list of markets to watch at Level 3. Level 3 (out of six levels of volatility) suggests rapidly evolving market conditions and an exchange rate movement of 40% or more in six months. It also implies multiple salary reviews and revisions should be considered among the comparators of our salary surveys in Myanmar. 

In the 15 December 2023 edition of our report, Myanmar’s volatility level quickly rose to Level 4, remaining high since then. Level 4 suggests a sudden, unexpected social/economic event, a currency devaluation of 50% or more in six months, and a disjointed and unclear survey comparator response. Myanmar’s exchange rate movement sharply increased from 40% on 1 December 2023 to 63.3% on 15 December 2023. However, it has slightly decreased to 62.9% since 1 January 2024. As of 15 February 2024, our latest edition, the exchange rate movement over the past six months has further declined to 61.4%. 

How Birches Group can help 

The situation in Myanmar is still fluid, and its future uncertain. We at Birches Group urge readers to pay close attention to the country’s political climate. The ramifications of Myanmar’s economic crisis extend far beyond news headlines. Understanding the current situation and its socioeconomic impact is crucial for organizations operating and managing their workforce in Myanmar. 

Staying informed requires ongoing monitoring. We encourage you to subscribe to our Market Monitor reports for bimonthly updates and analysis. Our latest edition (15 February 2024) focuses on Myanmar as a case study for developing special measures amid volatility. 

Moreover, registering for our salary surveys will equip you with the most recent data on compensation and benefits in Myanmar, allowing you to maintain responsible HR practices during these grim times. 

Birches Group is committed to providing you with the latest insights and resources to navigate this crisis. By staying informed and using reliable data, we can minimize the negative impact of this ‘forgotten emergency’ on the lives of Myanmar’s citizens. Subscribe to our Market Monitor and register for our compensation and benefits surveys today. 

References:

fastest-growing economies

FORECASTS TO WATCH: A LOOK AT 2024’S FASTEST-GROWING ECONOMIES

Written by Kai Donesa on . Posted in Resources.

As we look forward to a new year, we are pleased to highlight some of the fastest-growing economies in 2024. This bulletin provides a snapshot of the dynamic global economic landscape, underscoring labor markets that are resilient and highly expected to grow.

Overview of global economic trends

Global economic growth is expected to slow in 2024, but a recession is not likely, says the International Monetary Fund (IMF) in its October 2023 World Economic Outlook. The IMF projects global growth to slow to 2.9%, down from 3% in 2023. This slowdown is due to several factors, including the long-term consequences of the COVID-19 pandemic, the war in Ukraine, and the tightening monetary policy of central banks worldwide.

Emerging markets are expected to continue to outperform advanced economies. The IMF forecasts emerging and developing markets to grow by 4% in 2024, while advanced economies will grow by 1.4%.

The fastest-growing economies

Which countries will see the most growth in 2024? According to the IMF, 20 economies across the Asia Pacific, the Americas, Sub-Saharan Africa, the Middle East, and North Africa top the list.

A map of central and south america.
A map of asia and pacific countries.
A map of sub saharan africa.
A map showing the countries of africa.

Source: International Monetary Fund, World Economic Outlook, October 2023

Many of the fastest-growing economies are in the Asia Pacific and Sub-Saharan Africa. These regions are home to some of the world’s most populous countries, and their economies have expanded rapidly in recent years.

A bar chart showing the number of sales in a year.

A rapidly moving labor market reflects a fast-growing economy. Using data from our most recent Multi-sector Salary Survey, we have found that many of the rapidly growing economies are moving in a positive direction.

Our salary surveys provide valuable market movement data for nearly all the countries listed, making them a comprehensive resource for understanding global labor market trends. This extensive coverage ensures that you have access to information on different nations, allowing you to make informed decisions about hiring and international expansion.

Three economies to watch

The IMF further reports that Sub-Saharan Africa will be the second fastest-growing region in 2024. Growth in this part of the world is projected at 4%, well above the 2.9% global average.

For this bulletin, we will focus on three economies in Sub-Saharan Africa: The Gambia, Ethiopia, and Burundi. We have chosen these markets because they all show significant labor market movement based on our October 2023 salary survey data.

The Gambia

Over 6% GDP growth, declining inflation, and continued recovery in tourism

According to the World Bank’s Third Gambia Economic Update, the Gambia has displayed “remarkable resilience in the face of global economic challenges.” Its economy is expected to grow by 6.2% in 2024, accelerating from 5.6% in 2023.

Several factors drive this outlook, including the continued recovery of tourism and moderating consumer prices. Inflation is expected to decline from 17% in 2023 to 12.3% in 2024 as global commodity prices normalize.

According to World Bank economist Ephrem Niyongabo, the Gambian government must implement policies to accelerate financial inclusion, enhance access to financial services, and support economic growth.

What our salary survey data reveals. Using data from our Multi-Sector Salary Survey, we examined market movement in the Gambia from October 2022 to October 2023.

Salaries for support workers in the West African nation of 2.5 million people increased by an average of 13.6% over the period. On the other hand, professional workers experienced an average market movement of 14.3% over the same period.

Our data shows that the labor market in the Gambia is moving upward, with salaries increasing for both support and professional workers. This is a positive sign, suggesting that organizations are growing and can afford to pay their employees more.

Driving forces of economic growth. Analysts and economists say the Gambia’s growth will pick up in 2024 due to increased activity in all sectors, notably:

  1. Tourism. Tourism in the Gambia has been hit hard by the COVID-19 pandemic but is now on the road to recovery. Fitch Solutions reports that tourist arrivals to the Gambia will be strengthened by improving economic conditions in key markets such as the United Kingdom.
  2. Agriculture. Agriculture is another important sector of the Gambian economy. The World Bank cites improved agricultural production as contributing to Gambia’s growth.
  3. Infrastructure. The World Bank further notes that investments in infrastructure programs such as roads and bridges are also expected to drive growth.

Ethiopia

Above 6% GDP growth, greater political stability, and liberalization efforts

Africa’s second-most populous country has grown by nearly 9% annually over the past decade. The Ethiopian economy is expected to accelerate in 2024, with most analysts predicting GDP growth above 6%. The IMF projects 6.2% growth, slightly higher than the 6.1% rate in 2023. Consumer prices are expected to drop from 29.1% in 2023 to 20.7% in 2024.

Ethiopia’s rebound is driven by several factors, including post-conflict reconstruction, continued progress on reforms, and expected IMF financing worth at least US$2 billion.

What our salary survey data reveals. Upon reviewing the market movement in Ethiopia from October 2022 to October 2023, we saw an average salary movement of 19.1% across job roles. The salary movement for support roles was higher at 20.8%. On the other hand, the salary movement for professional roles saw a slightly lower increase of 17.4%.

Our data suggests that Ethiopia’s job market is strong, and salaries are increasing across roles.

Driving forces of economic growth. What factors support Ethiopia’s accelerated growth in 2024?

  1. Peace and political stability. The Tigray War in the north from 2020 to 2022 substantially impacted lives, livelihoods, and infrastructure. Since then, a peace agreement with Tigray’s regional administration has been a crucial step to elevating investor sentiment, the World Bank notes. The Economist Intelligence Unit adds that a relative improvement in political stability will drive a gradual increase in growth.
  2. Market liberalization and privatization. The African Development Bank states that liberalizing more sectors to unlock foreign investments may boost Ethiopia’s economic outlook. Analysts from Coface and Lloyds Bank describe the opening and modernization of banking, finance, and telecommunications as promising. The government is also pursuing its “Homegrown Economic Reform Agenda 2.0,” a policy mix addressing investment and trade, productivity, and climate resilience.
  3. Agricultural potential. Ethiopia is the fifth-largest coffee producer in the world. Lloyds Bank says agriculture contributes to over a third of Ethiopia’s GDP and employs more than two-thirds of the workforce. Additionally, the authorities have been making sustained efforts to add value to agricultural products and plan to develop agro-industrial parks across the country.

Burundi

6% GDP growth, increased government spending, and improvements in agriculture

Burundi’s economy is projected to grow by 6% in 2024, much higher than the expected growth of 3.3% in 2023. This is driven by government spending and increased earnings from mining and agriculture. Consumer prices are expected to decline to 16.1% from an estimated 20.1% in 2023, as measures to boost farm production and stabilize the exchange rate take effect.

Overall, the outlook for Burundi is positive. However, achieving growth will require the government to address key challenges and implement sound economic policies.

What our monitoring reveals. Our data shows that salaries in Burundi increased by an average of 14.2% from October 2022 to October 2023. Higher salary increases were seen at 16.2% in professional roles. In comparison, lower salary increases were seen at 12.2% in support roles.

Driving forces of economic growth. Burundi is poised for encouraging growth in 2024. Three key drivers are fueling this momentum:

  1. Government spending. An infrastructure shortage is one of the significant constraints to modernizing Burundi’s economy. The government plans to increase spending by about 65% in the 2023–24 fiscal year—particularly on infrastructure—to stimulate economic activity. Coface cites that constructing a new railway line between coastal Tanzania and landlocked Burundi will begin in 2024, making supplying food and exporting minerals easier.
  2. Mining. Burundi has untapped mining potential, which could be a “game-changer for its development,” says the Institute for Security Studies Africa. The East African nation is rich in mineral resources, including nickel, gold, phosphates, and rare earth elements. Yet, since April 2021, the activities of foreign mining firms have been suspended. In June 2023, the government published a new Mining Code to improve the regulatory environment and attract the return of foreign investments in mining.
  3. Agriculture. ISS Africa further predicts that agriculture will have the most significant impact on reducing poverty in the short term. Agriculture is the backbone of Burundi’s economy, accounting for more than 30% of GDP and employing over 85% of the workforce. The World Bank expects agricultural production to pick up in 2024. It also notes that more private sector activity in agriculture is an opportunity for Burundi to increase food production.

How Birches Group’s salary surveys can help you

Strategic insights are crucial for organizations looking to work in emerging markets. Register today for Birches Group’s extensive salary survey database and equip yourself with the most comprehensive and up-to-date compensation and benefits data.

Birches Group provides invaluable insights into salary structures, benefits packages, and market trends in over 150 countries. Using our data, you can make informed decisions, navigate diverse markets, and ensure your human resources strategies align with the ever-changing global environment.

References :

  • African Development Bank. 2023. Burundi Economic Outlook. Accessed December 09, 2023. https://www.afdb.org/en/countries/east-africa/burundi/burundi-economic-outlook.
  • —. 2023. Ethiopia Economic Outlook. Accessed December 08, 2023. https://www.afdb.org/en/countries/east-africa/ethiopia/ethiopia-economic-outlook.
  • —. 2023. Gambia Economic Outlook. Accessed December 07, 2023. https://www.afdb.org/en/countries/west-africa/gambia/gambia-economic-outlook.
  • Coface. 2023. Burundi. August. Accessed December 09, 2023. https://www.coface.com/news-economy-and-insights/business-risk-dashboard/country-risk-files/burundi.
  • —. 2023. Ethiopia. June. Accessed December 08, 2023. https://www.coface.com/news-economy-and-insights/business-risk-dashboard/country-risk-files/ethiopia.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.