Tag: compensation

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.

Ghanaian currency notes of varying denominations featuring images of notable figures and intricate designs.

Navigating Ghana’s Debt Crisis: An Update

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group monitors labor market trends making headlines worldwide, ensuring you are updated on the latest developments.

As the world grapples with economic uncertainty, one country that stands out in its struggle is Ghana—a gold, cocoa, and oil producer in West Africa.

In 2022, we published a headline article on Ghana, detailing the government’s efforts to stabilize the economy amidst a cost-of-living crisis. In our article, “Ghana’s Cost of Living Crisis: What You Need to Know,” we also explored the growing concerns surrounding the country’s surging inflation.

Since then, Ghana has plunged into a financial crisis—its worst in a generation—mostly due to its rising debts. AllAfrica.com reports that Ghana’s debt-to-GDP (Gross Domestic Product) ratio has reached 98.7%, severely hindering the country’s economic growth and stability.

According to an article by the New York Times, Ghana’s debt crisis has reached a critical juncture: the government was struggling to meet its financial obligations. On 19 December 2022, Ghana suspended payments on most of its external debts, effectively entering a state of default. By the end of 2022, Ghana owed US$63.3 billion to both foreign creditors and domestic lenders.

The government’s decision was met with mixed reactions, with some welcoming it as a necessary step to restructure Ghana’s debts. Other voiced concerns about its long-term implications.

A strain on households and businesses

The debt crisis is greatly affecting individuals and firms across Ghana. In a survey by Afrobarometer, 87% of citizens think the country is heading “in the wrong direction.” Rising prices have eroded purchasing power, making it difficult for many to afford necessities. Businesses are facing increased costs and reduced consumer demand.

A World Bank report estimated that 850,000 Ghanaians have drifted into poverty due to double-digit inflation. And over the past two years, anti-government protests have become more frequent, news outlets like the BBC and Business Insider Africa have reported.

The government’s response to the debt crisis

However, the Ghanaian government has not been idle in the face of the debt crisis. It has embarked on several actions to address the matter, including seeking aid from the International Monetary Fund (IMF) and implementing austerity measures.

Seeking financial aid from the IMF. In May 2023, Ghana secured an Extended Credit Facility amounting to US$3 billion over the span of three years. “It is the 17th time Ghana has been compelled to turn to the fund since it gained independence in 1957,” the New York Timesnotes.

The Washington-based lender has laid out a detailed rescue plan to get Ghana back on its feet. The plan includes measures to cut back on debt and spending, raise revenues, and protect the poorest. In the meantime, Ghana shall continue to negotiate with its foreign creditors.

As a result of its strong performance in meeting IMF targets, Ghana reached an agreement on 6 October 2023 to unlock the next US$600 million of its financing.

Restructuring debts. To meet IMF conditions, Ghana has also embarked on comprehensive debt restructuring. The New York Times remarks that “the debt situation was so unusual that the IMF, for the first time, made settling its domestic debt a prerequisite for a bailout.” A partial restructuring, which included swapping local bonds with new ones and extending due dates, was launched in December 2022 and completed in February 2023.

In May 2023, Ghana’s creditors formed a committee for debt restructuring talks. It received a “working proposal” a month later, sources with direct knowledge of the matter told Reuters. As of this writing, Reuters reports that Ghana is in the advanced stages of restructuring its external debts, with hopes of achieving a resolution by the end of 2023.

Other reforms. Additionally, the Ghanaian government is complementing IMF aid and debt restructuring with reforms in tax policy, revenue administration, and public financial management. The reforms aim to restore economic stability and debt sustainability, while protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive recovery.

Despite the challenges, there have been some positive developments. The IMF sees that Ghana’s commitment to strong policies and reforms is bearing fruit. “Signs of economic stabilization are emerging. Growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized,” the lender said after its first review in October 2023.

Despite these efforts, Ghana’s debt crisis is far from over. As they navigates this challenging period, it is crucial for organizations to stay informed. By understanding Ghana’s debt crisis, your organization can better prepare for similar situations in other labor markets.

How Birches Group can help

Ensure you are always prepared for changes in market conditions with our Market Monitor. Our trusted resource provides you with insights into current developments in emerging markets, empowering you to make informed decisions and adapt to new challenges.

Subscribe now and embark on a journey toward a deeper understanding of the market. Take the first step toward enhanced market insights today.

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A group of people sitting around a table in an office.

WHY ORGANIZATIONS SHOULD OUTSOURCE THEIR SALARY SCALE DESIGN

Written by Kai Donesa on . Posted in Resources.

Organizations are beginning to recognize that the key to attracting and retaining top talent hinges heavily on a strategic, fair, and competitive salary scale. Yet, tailoring this structure to your unique needs can be complex.

Do you have the tools to properly analyze labor market data? Can your human resources (HR) team maintain the salary scale annually, in addition to addressing other responsibilities? Is there a way to design and update your salary scale more efficiently? This is where outsourcing is necessary.

Outsourcing the design and maintenance of your salary scale unburdens you and your HR team from this intricate task, allowing you to focus on your core business operations. Handing this responsibility over to more experienced professionals does not only save time; it ensures that your salary scale aligns with your strategic goals, global policies, market trends, and industry standards.

This article discusses why organizations should consider outsourcing the design and maintenance of their salary scale. We will explore how this pragmatic move can help you, from gaining expert advice to ensuring market alignment. If you’ve been second-guessing whether you need to outsource your salary scale design, our insights might be what you need to make an informed decision.

Understanding salary scale design

Your salary scale is the single most important document in HR. The structure determines how much an employee will be paid based on their role, their value for experience at each grade level, and the difference between one grade level to the next. It tells your stakeholders everything they need to know about your organization, including:

  • How you position yourself in the market
  • What value you place on your jobs
  • How you manage relationships across jobs
  • What are the possible career progressions
  • Where you stand on equity and transparency

A well-balanced salary scale is crucial for your people to work efficiently and achieve team cohesion. Your salary scale drives all other HR programs, including recruitment, staff retention, promotion, and career development.

Designing the scale is not only about deciding how much to pay an employee or listing pay grades. It is driven by building a fair and equitable compensation structure that shows how you attract and retain talent, as well as motivate staff. It involves balancing internal considerations and team dynamics with the external market.

However, designing and updating your salary scale requires a deep understanding of your business strategy, a thorough knowledge of the labor market, and keen insight into the motivations and expectations of staff. These tasks demand a high level of skill, expertise, and experience.

Why it’s essential to have a well-designed salary scale

A well-designed salary scale establishes a framework for determining staff compensation and sets the standard for pay equity within your organization. It also helps ensure employees are rewarded fairly, boosting morale and motivation.

Your salary scale also serves as a roadmap for career progression, giving staff a clear idea of what they can expect as they advance. This transparency can help foster trust and loyalty among staff, leading to increased job satisfaction and lower turnover rates.

Further, a well-designed and updated salary scale can help your organization attract and retain top talent. By offering competitive salaries in line with market rates, you can position your organization as an employer of choice.

Common challenges in designing a salary scale

Designing a salary scale is not without its challenges, though. One of the fundamental issues is determining the appropriate pay range for each grade level within your organization. This requires a thorough understanding of the job market and the ability to assess the value of each level accurately, carefully balancing your organization’s workforce needs and overall budget.

Another challenge is ensuring pay equity. This involves making sure employees are paid fairly for their work. Achieving pay equity can be complicated, especially in large organizations with a diverse workforce across labor markets.

Keeping the salary scale up to date is also a concern. The job market constantly evolves, and the value of specific roles can change rapidly. The salary scale must be updated every year to reflect market trends.

The benefits of outsourcing salary scale design

Outsourcing the design of your salary scale offers several advantages:

  1. First, it frees up valuable time and resources. Designing a salary scale requires a significant amount of time and expertise. By outsourcing this task, your HR team can focus on other vital projects, such as employee engagement and talent development.
  2. Second, outsourcing gives you access to expert knowledge and insights. An HR consultancy firm like Birches Group has a deeper understanding of labor markets across continents. Additionally, firms such as ours can share accurate and timely information about salary trends and benchmarks.
  3. Finally, outsourcing ensures fairness and objectivity. An external firm can design a salary scale free of internal biases or conflicts of interest.

Case study: Elizabeth Glaser Pediatric AIDS Foundation

To illustrate the benefits of outsourcing your salary scale design and maintenance, let’s consider the case of the Elizabeth Glaser Pediatric AIDS Foundation (EGPAF), a nonprofit organization supporting activities in 19 countries. EGPAF had a centralized salary system but needed to ensure its salary scales kept up with the market, especially in Africa.

EGPAF tapped us to design its salary scale over several years. Doing so refined the nonprofit’s salary scales with a view closer to the local setting. We then looked at each African location, improving EGPAF’s pay structures and systems based on our NGO Surveys. Based on their budget, we developed three different salary scale options for each country.

As a result, EGPAF can now:

  • Name which comparators are relevant to them based on consistent comparator criteria developed for their salary scale review, and which scale design approach best addressed its internal compensation issues, all while staying within budget.
  • Get a more precise snapshot of the labor market through our salary survey data.
  • Anticipate and be better equipped when sudden changes in the market occur.

This case illustrates the significant benefits that can be gained from outsourcing your salary scale design.

How Birches Group can help you design and update your salary scale

Creating and maintaining a salary scale is a technical and creative process best left to specialists. If you’re considering developing or updating your organization’s salary scale, we at Birches Group are here to help. With our team of experienced professionals, we can provide salary scale options tailored to your needs.

We have extensive expertise in adapting or creating salary structures through our work with many clients from the public and private sectors. We believe proper salary scale design must be tailored to your needs and culture, as well as your compensation philosophy, market position, and budget. A well-designed salary scale must also align with the local market and adhere to corporate policy and compensation goals.

If you’re ready to learn more about how we can design and maintain your salary scale, contact us today.

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 our LinkedIn for more content on pay management and HR solutions.

Navigating Volatility: A Closer Look at Argentina’s Peso Crisis

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group monitors labor market trends making headlines worldwide, ensuring you are updated on the latest developments.

On 14 August 2023, the Argentine government took the bold step of hiking interest rates and decreasing the value of its currency. This intervention came a day after the country’s primary elections, adding a layer of uncertainty and volatility to Argentina’s economic landscape.

Unexpected timing

After far-right and anti-establishment candidate Javier Milei obtained the most votes, the results sparked a sell-off of the Argentine peso, shares, and bonds. Anticipating a market backlash, the Banco Central de la Republica Argentina (BCRA) devalued its currency by 20% (to AR$350 per dollar) to reassure jittery investors. The Buenos Aires Timesreports that the devaluation was the largest in a single day since December 2015. The BCRA said the move would help cushion “exchange rate expectations and minimize the repercussion on prices.”

The BCRA added that the peso would be held at AR$350 per dollar until the general elections in October. But many news outlets and think tanks say the devaluation leaves the official exchange rate far from the parallel market rate, which is AR$690 per dollar.

Reuters cites that the financial markets had been betting on a solid performance by a more moderate political candidate. Bloomberg reports that Milei, a representative and economist, supports dollarizing the economy. Riding on a wave of popular discontent, Milei has also called to liberalize the economy, vowed to abolish the central bank, and advocated for sharp spending cuts.

“Investors like Milei’s economic message but fear the execution and institutional risk, considering his lack of power and aggressive style,” a chief Argentina strategist at a financial services company told Bloomberg. “Milei represents uncertainty,” a fixed-income strategist at an investment management firm shared.

With negative international reserves, inflation at over 120%, poverty at 40%, and tight capital controls among its many economic woes, Argentina faces fresh uncertainty ahead of the October elections.

Argentines feel the impact

The recent drop in the peso’s value has affected ordinary Argentines, worsening already high inflation and making everyday life more challenging. The prices of essentials have skyrocketed, putting a strain on household budgets. In fact, consumer goods companies have increased their prices by nearly 10%, further stretching purchasing power.

To make matters worse, supermarkets have confirmed that the supply of goods has been disrupted, making it harder for people to find and afford the necessities they rely on.

Additionally, the devaluation of the peso is expected to have a ripple effect on gas prices, as oil companies expect their costs to rise. This means that Argentines will also face higher prices for transportation and utilities.

Due to economic hardship, the savings of many Argentines have further eroded. The cost of living has reached crisis levels, making it increasingly difficult for people to meet their basic needs. There are concerns that, if the situation worsens, the country could face hyperinflation.

What our Market Monitor says

Our Market Monitor report offers a sobering analysis:

1 January to 1 June 2023. During the first half of the year, Argentina alternated between Levels Two and Three (out of six levels of volatility), with an average exchange rate movement of 39.9%. Level Two shows dynamic market conditions and an exchange rate movement of over 20% in the past six months. On the other hand, Level Three shows rapidly evolving market conditions and an exchange rate movement of over 40% in the past six months.

15 June to 15 August 2023. From 15 June to 15 August, Argentina climbed to Level Three with an average exchange rate movement of 44.8%.

1 September onwards. Beginning on 1 September, Argentina’s level of volatility rose to Level Four. This level of volatility reflects a sudden, unexpected social or economic event (i.e., the peso devaluation, among other factors) or a currency devaluation of at least 50% in six months. In the case of Argentina, the exchange rate moved by 74.4%.

Our latest salary surveys report that many organizations still denominate salaries in Argentine pesos, keeping the South American country at Level Four.

How Birches Group can help

Argentina’s peso crisis underlines the importance of developing a Special Measures Policy in response to economic instability. Such policies can help protect your organization and employees from economic shocks.

If your organization grapples with the effects of market volatility and needs help formulating a clear Special Measures Policy, our consultants are here to assist you. With their extensive experience and in-depth understanding of emerging labor markets like Argentina, they can provide you with the tools and advice you need to navigate these uncertain times.

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Ensuring Equity

BUILDING A SUCCESSFUL HR MANAGEMENT STRATEGY BY ENSURING EQUITY

Written by Kai Donesa on . Posted in Resources.

A discourse is taking center stage in human resources (HR): equity. More than just a buzzword, ensuring equity in the workplace is now a concern across organizations, sparking conversations between HR professionals and business leaders.

But equity is more than just fairness. Equity ensures every employee has equal access to opportunities, resources, and fair treatment. In an era where diversity and inclusion have become the core of corporate values, equity is impossible to ignore. Integrating equity into your organization’s HR strategies is crucial to cultivating employee satisfaction and success.

Additionally, it’s important to distinguish between equity and equality. While equality involves providing the same resources to everyone, equity acknowledges that individual circumstances vary and, as such, an organization should offer the necessary resources to achieve equal outcomes.

Ensuring Equity in the work place
Image source: Robert Wood Johnson Foundation

As organizations navigate an increasingly diverse and dynamic landscape, establishing a fair HR strategy goes beyond ethics and compliance.

This blog post will explore the hot topic of equity, its role in HR practices, and how HR can foster an environment where equity is a reality. Drawing from industry insights and proven systems, the blog article will help guide you toward cultivating a fairer and more equitable workplace.

What is equity?

As an HR professional, you have probably heard the term “equity” thrown around in your workplace. But what does it mean?

Equity is the fair treatment of access, opportunity, and advancement for all individuals. While the term is often associated with pay, equity acknowledges that every staff member has unique needs and circumstances.

Ensuring equity involves customizing resources and opportunities so that everyone has an equal chance of success. According to the Society for Human Resources Management, this includes “identifying and working to eliminate barriers to fair treatment for disadvantaged groups, from the team level through systemic changes in organizations and industries.” For example, providing added training to employees who lack specific skills can be an example of equity.

You might wonder why equity is significant and how it affects your organization. The truth is that equity is the backbone of any successful HR management strategy. Without it, your organization could face many challenges, including high turnover rates, low employee morale, and even legal issues.

How vital is equity in HR?

Equity in HR is more than a matter of ethics or compliance. It’s a strategic necessity. Employees who feel treated fairly are more likely to be engaged and productive. They are more likely to stay with your organization and contribute to its success.

A lack of equity, on the other hand, can lead to a toxic work culture. Employees who feel they are not treated fairly are more likely to be disengaged and unproductive. They are likelier to leave your organization, leading to high turnover rates and recruitment costs. Moreover, a lack of equity can also expose your organization to legal risks, as it could potentially violate anti-discrimination laws.

Another reason ensuring equity is vital in HR is that it helps attract and keep top talent. Job seekers are not just looking for a paycheck. They are looking for a workplace that values diversity and inclusion and treats all employees fairly. By ensuring equity, you can make your organization a more attractive place to work.

Ensuring equity in the organization is vital as the workplace constantly evolves. How can organizations support equity when their staff is dispersed across various locations, both locally and internationally? How do they ensure equal opportunities when most staff opt for remote work instead of coming to the office?

HR plays a crucial role in implementing policies and practices that promote fair treatment and challenge systemic bias. They must create an environment where every employee has a chance to succeed regardless of their background.

How do I build Equity into our HR strategy?

Building equity into your HR strategy may seem daunting, but it doesn’t have to be. Here are some steps you can take to ensure equity in your organization:

Assess your current situation. Are there any areas where some employees are treated less favorably than others? Are there any policies or practices that could potentially discriminate against certain groups of employees? Thoroughly auditing your HR processes can help. Collect and analyze relevant data to identify any equity issues. Once you have identified these concerns, take action to address them.

Develop a clear policy on equity. Should individuals in the same job receive similar pay rates, regardless of their location in vastly different markets? Alternatively, should compensation be determined based on what the organization considers fair and competitive within the specific market where the employee is situated? Your policy should clearly articulate your organization’s dedication to equitable treatment for all employees, set up parameters for addressing and rectifying potential equity concerns, and emphasize the significance of communicating this policy to all employees while offering training in equity and diversity.

Implement fair HR practices. Promoting equity requires an integrated approach where every individual feels valued and heard. This involves creating an environment where diversity is celebrated and employees are given equal access to opportunities through unbiased recruitment processes, proper compensation structures, and inclusive workplace policies. Remember, the goal is not just to treat everyone the same but to give everyone an equal opportunity to succeed.

Communicate your targets and share your progress. Set clear, measurable goals for equity, and track your progress towards these goals. Be transparent about your progress and any challenges you are facing. Most importantly, set up transparent communication channels that allow for open dialogue about organizational decisions, fostering trust and empowerment among staff members.

Promote the importance of equity. Make sure that your organization’s leaders and staff are aware of the benefits of equity and why it is essential to success. Remember that equity is an ongoing commitment that requires continuous monitoring and improvement. By promoting an environment of fairness and respect, you can ensure that your people can thrive and contribute meaningfully to fulfilling the organization’s mission.

How Birches Group can help you ensure workplace equity

At Birches Group, we understand the importance of equity in HR. That’s why we’ve developed Community SkillsTM, a platform and tool that can help you ensure equity in your organization.

Community SkillsTM is designed to help assess your people’s skills and knowledge growth. It allows you to create a skills profile for each employee, which can aid in finding skills gaps and developing learning & development plans.

In addition, the platform offers benchmarks for various roles and functions to better ensure fair compensation for all employees. By using Community SkillsTM, you can ensure that all your employees are given an equal opportunity to grow and succeed.

Equity is a crucial factor in building a successful HR management strategy. It’s not just about treating everyone the same, but about giving everyone an equal opportunity to succeed. By understanding equity, recognizing its importance, and integrating it into your HR practices, you can create a workplace that is fair, inclusive, and conducive to success.

Contact Birches Group today to learn about our Community SkillsTM platform and request a demo.

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 our LinkedIn for more content on pay management and HR solutions.

Businesses Live with Dollarization in Lebanon

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group reports on what is happening in labor markets that are making headlines around the world, bringing you up to date on the news

Experiencing a financial and economic collapse that the World Bank ranks among the world’s worst since the 1850s has led to dollarization in Lebanon.

The country’s currency, the Lebanese Pound (LBP), has lost over 90% of its value since the crisis erupted in 2019. International Crisis Group reports that the plummeting LBP has caused havoc across the Lebanese economy. Salaries have melted in value. Hyperinflation has reached triple digits, immensely reducing purchasing power. According to the United Nations (UN), over 80% of the population lives in sudden, multidimensional poverty.

A highly volatile and dollarized market

Birches Group first observed signs of volatility in Lebanon in November 2022, when the country was listed in the Market Monitor report at Level 4 (of six). In mid-December, Lebanon’s level of volatility escalated to Level 5, indicating a wide prevailing practice to denominate salaries in United States Dollars (USD). (It should be noted that the significant exchange rate movement we have been seeing in Lebanon is most likely caused by the UN switching its source of exchange rates to one that better reflects local conditions.)

The LBP’s plunge has led to a de facto dollarization of the economy, says Arabian Gulf Business Insight. Some observers and economists believe dollarization would be a solution to the crisis and a way to secure monetary stability.

Dollarization explained

Dollarization is the process of replacing the domestic currency with a foreign one to serve the essential roles of money in the economy. This occurs when a country’s currency loses its usefulness as a medium of exchange due to hyperinflation or instability.

Businesses begin to dollarize

The decline in the LBP’s value has led to businesses pricing their items in USD, where customers pay the local currency based on the daily parallel market rate. In March 2023, shops and supermarkets began to price their products in USD. Other businesses have started charging for their goods and services—including rent, household items, clothing, gas, health insurance, and medical care in USD. Outside the public sector, employees are fully or partially paid in USD.

Why are organizations in Lebanon dollarizing?

Trust and confidence in the LBP have waned over the past three years due to many factors and recent events.

Currency devaluation. Since 1997, Banque Du Liban (Lebanon’s central bank) has set the exchange rate at 1,507.50 LBP to 1 USD. The rate remained unchanged for 25 years.

In February 2022, Banque De Liban revalued the official exchange rate to 15,000 LBP to 1 USD—a 90% devaluation from the longtime peg. Officials say the measure is a step towards stabilizing the LBP and eliminating the many exchange rates that have emerged in recent years. But the official exchange rate is well below the rate on the street, says Al-Monitor. According to parallel market rates on LiraRate.org, the LBP trades at 79,000 to 1 USD as of 6 March 2023.

ECA International foresees more devaluations of the official rate in months to come.

Presidential vacuum. Political paralysis has made matters worse for Lebanon. Since the end of October 2022, the country has been without a president. Its deeply divided Parliament has yet to elect a new head of state. This deadlock is unsustainable and paralyzes the government at all levels, says the International Support Group for Lebanon (ISG).

With only a caretaker government and limited authority, an economic plan with reforms required by the International Monetary Fund (IMF) has yet to be devised. The ISG has urged leaders to immediately harmonize exchange and adopt the laws needed to restore investor confidence. Unifying exchange rates, including the parallel market rate used for most goods and services, is a precondition the IMF has set to secure a US$3-billion aid package.

Central bank governor under investigation. European investigators are currently probing the alleged state fraud and actions of Banque Du Liban governor Riad Salameh, who has held the post for three decades. Salameh is suspected of financial misconduct, including money laundering and embezzlement. In March 2023, Lebanese prosecutors charged Salameh, his brother, and an associate with forgery, illicit enrichment, and tax law violations.

How Birches Group can guide your organization

It’s not wrong to dollarize, but denominating salaries in US dollars requires careful thought. Remember that returning to the local currency is difficult once you’ve dollarized. Carefully consider how this process will affect your pay practices and staff.

Is your organization in Lebanon considering paying staff in US dollars? Get guidance on making such a big switch. Contact us today to learn how we can help you develop a Special Measures Policy that includes dollarization.

References:

A vibrant spice market with various spices and herbs displayed in piles and containers, with people shopping and shelving in the background.

Iran’s Countrywide Protests and What They Mean for Employers

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group monitors labor markets that are making headlines worldwide and wants to share news and updates on the conditions in these markets.

“Blood that is spilled unfairly will boil until the end of time,” goes an old Persian saying. For nine weeks, the streets of Iran have been shaken by protests calling for the overthrow of the religious theocracy that has ruled for over 40 years. Iran’s countrywide protests began on September 16, when 22-year-old Mahsa Amini died in police custody. Amini was detained in Tehran for allegedly not observing the country’s dress code for women and collapsed into a coma at a police station. A photo and video of Amini in the hospital were shared online and quickly went viral.

Iran has a long history of demonstrations and unrest. But the events since mid-September are different. They are led by women and young girls with no organizing force or leadership. They are spontaneous, persistent, widespread, and supported by people from different layers of society. Students and older Iranians, merchants and labor unions, and the middle and working classes have taken to university campuses and onto the streets of over 100 villages, towns, and cities across the country. Iranian expatriates have also rallied in support in Berlin, Washington DC, and Los Angeles.

And despite violent clashes with security forces, more than 14,000 arrests, and mobile and internet restrictions, dissent rages on with remarkable defiance.

The protests and the economy

The demonstrations across Iran now go far beyond Amini’s death and women’s rights. They have moved from demands for reform to demands for systemic changes, an expert told NBC News.

The protests have quickly swelled in response to the Islamic republic’s economic stagnation. The BBC says that, on average, Iranian families are “quite a lot poorer than they were 15 years ago.” Iran’s middle class has shrunk dramatically since 2018, with a third of its population falling into poverty. 23% of the youth population is unemployed, according to the Financial Times.

Additionally, Iran is facing a record inflation of 42.9%. Its currency, the Rial, has sunk to all-time lows. Since August, the Iran Rial has lost more than 20% of its value against the United States (US) dollar.

Businesses, shop owners, and bazaar traders in several cities closed their stores and went on strike, joining the protests in solidarity, Bloomberg and Iran Wire report. According to a primer from the United States Institute of Peace, factory workers in the energy and petrochemical industries also went on strike.

The Iran Chamber of Commerce warns that every hour of internet restrictions due to the protests costs US$1.5 million in damages to the Iranian economy. Research from the Tehran Computer Trade Union Organization states that 47% of internet businesses have lost more than 50% of their income. If the internet disruptions continue, 73% of businesses with less than 50 employees will lose over US$1,100 daily.

The government is considering a 20% pay raise for state workers. Still, the Rial’s sharp fall has eaten away at any benefit for workers, says London-based Iranian news website Iran International.

How we can help

Policies and procedures for keeping pay programs functioning in highly volatile markets such as Iran are critical. Organizations must develop a Special Measures Policy to determine the triggers and equivalent measures to support staff and ensure business continuity during political unrest. In addition, decide how your organization plans to implement the next steps for your staff. Employees need to know they can rely on their employer to help them during times of uncertainty.

We at Birches Group have extensive expertise in developing Special Measures Policies for organizations across different markets and sectors. Speak with our consultants today to find out how we can create one for you.

References:

Vital Partners, Shared Priorities: The US Strategy Towards Sub-Saharan Africa

Written by Kai Donesa on . Posted in Uncategorized.

Birches Group monitors labor markets that are making headlines worldwide and wants to share news and updates on the current conditions in these markets.

The White House released in August 2022 the US strategy toward Sub-Saharan Africa (SSA). Its renewed policy supports four main objectives, including advancing pandemic recovery and economic opportunity.

A priority and opportunity

SSA is of growing importance on the world stage. Comprising 49 countries, the region is a geopolitical priority and an emerging economic opportunity. SSA countries hold roughly 25% of United Nations General Assembly seats. Moreover, the region is integrating into the world’s largest free trade area.

The US Department of Commerce’s International Trade Administration describes SSA as presenting real opportunity, with indicators such as:

  • A combined market population of over 1.2 billion people (that is expected to double by 2050),
  • A gross domestic product of more than US$1.5 trillion, and
  • Home to some of the fastest-growing economies in the world.

The World Bank reports that economic activity in the area is set to expand by 3.6% in 2022, 3.9% in 2023, and 4.2% in 2024. Additionally, its young population makes SSA an attractive investment destination. Massive demographic shifts in this part of the world provide tremendous opportunities to create jobs, boost incomes, and reduce poverty, especially in a global environment of slowing growth.

China and its growing influence in the region

The world is well aware of Africa’s importance, encouraging countries to expand their political, economic, and security engagement with African states. In the past 20 years, new actors, such as China, have been shifting dynamics across SSA. And Chinese influence in the region is real and significant.

In 2001, China received less than 3% of the region’s exports, compared to nearly 19% for the US. In 2009, China overtook the US as SSA’s largest trading partner. Almost 20 years later, China has emerged as the region’s single greatest export partner, holding an 11% share of exports in 2019, while the US share dropped to 5%. China’s Belt and Road Initiative has invested in SSA through transportation, power, water supply, and other infrastructure projects. China has also provided loans, investments, and aid.

The US reframes its Sub-Saharan Africa partnership

The US is responding to growing foreign activity and influence in SSA and is engaging a region undergoing significant transformation. “It would be a strategic mistake for the US to abandon its engagement with SSA altogether—especially as US adversaries and competitors are relentlessly increasing their investment in the region…” said Daniel Runde, Director of the Project on Prosperity and Development, and Sundar Ramanujam, Research Associate of the Project on Prosperity and Development at the Center for Strategic & International Studies (CSIS).

Biden’s policy differs from those of previous administrations because it focuses on overhauling its relationship with SSA from donor-recipient to genuine partnership. “Biden’s team extols Africa’s strengths and is proposing US-Africa partnerships on a range of issues,” said Mark Bellamy, Senior Advisor of the Africa Program at CSIS.

Further, Devex reports that the strategy has generally been well-received and is seen as sending a strong message about US engagement in the region. “It’s a strategy that reflects the region’s complexity—its diversity, its power, and its influence—and one that focuses on what we will do with African nations and peoples, not for African nations and peoples,” said US Secretary of State Antony Blinken as he announced the strategy.

It’s also an effort to make regional engagement authentic and not just a battleground to compete with China and Russia. “Too often, African nations have been treated as instruments of other nations’ progress rather than the authors of their own,” added Blinken in his announcement.

Why this matters to employers

With the intent of the US to reestablish ties and reinvest in SSA, employers with a presence in the region can anticipate a significant shift in the labor market in years to come. Monitoring the labor market as early as possible is critical for your organization to seize economic opportunities and remain competitive. Keeping an eye on market shifts enables your organization to plan and make informed decisions about hiring, pay management, employee benefits, and more.

How we can help

We at Birches Group survey leading employers in over 150 countries with a consistent methodology designed for dynamic, emerging markets across SSA. We survey labor markets of varying sizes, focusing on employers that set trends. Get updated and relevant data on every country in SSA. Speak with our consultants today to understand our data and how you can use it for your organization.

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