Brazil
Economic briefing
Latin America’s largest economy, and the world’s seventh largest, is stalling somewhat after several years of fast growth. GDP rose only 1% in 2012, compared with 7.5% ?in 2010. However, recent government policies aim to kick-start growth again, unemployment remains low and foreign direct investment (FDI) is high.
Potential talent pool
Brazil has a 90% literacy rate and an urbanised population (85% live in cities). But in 2009, only 12% of 25- to 34-year-olds had attained tertiary (post-secondary school) education, lagging behind the OECD’s 31% average. Skills shortages remain a problem: according to a 2013 Manpower survey, 68% of companies have difficulty finding skilled staff.
Legal lowdown
All employees must receive a mandatory Christmas bonus of one month’s salary, and 30 days paid holiday. Employers must pay into a Guaranteed Severance Fund, which can be withdrawn by the employee if it is ruled they have been terminated without cause. Union enrolment is also mandatory for all companies and staff.
From the HR frontline
“We have a high level of staff turnover in Brazil, and a lot of that is down to a lack of skills. We put pressure on staff to deliver, and it becomes clear they can’t. There isn’t the same sense of service. Levels of service that are acceptable locally will not be acceptable to an international client.
“It’s easy to pay lots for poor quality – that’s why you need a great HR person on the ground. There is competition for senior roles, and you will pay for the top talent.”
Teresa Lamy, group head of HR, TMF Group
“Brazil is dominated by unions, and employment isn’t cheap. It’s not uncommon to see
15-month bonuses paid on top of salaries.”
Kieran Soughton, international interim HRD
Russia
Economic briefing
Russia lost some momentum in 2013, with projected GDP growth of 1.8% – well below 2012’s 3.4%. The World Bank expects GDP growth to rise to 3.1% in 2014. It says Russia’s economy is near its current growth potential and “running very close to its maximum capacity”.
Potential talent pool
The population is highly educated: in 2010, 55% of all 25- to 34-year-olds attained teritiary education, one of the highest levels in the OECD. More people continuing education after school study technical or vocational qualifications in Russia than in many other OECD countries (33%, compared with the 10% ?OECD average).
Legal lowdown
Employers are not entitled to dismiss any employees ‘at will’ – all grounds for termination must comply with the Russian Labour Code. Fixed-term contracts are only permitted in very specific circumstances. Russia has stricter document requirements than many countries.
From the HR front line
“There is a highly educated, high-quality talent pool, but it’s incredibly expensive, especially to employ English speakers. We keep our Moscow office small and use Ukraine instead. Russians have a hierarchical way of doing things: command ?and control is still the management style.”
Teresa Lamy, TMF Group
Turkey
Economic briefing
Turkey’s forecast economic growth for the coming years is among the world’s highest. Moody’s puts it among the top five fast-growing economies in the G20. GDP growth is expected to be between 3% and 4% for 2013, and 3.5% to 4.5% for 2014.
Potential ?talent pool
Turkey has a younger population than many of its neighbours and the working-age population has increased by 20% in recent years. According to a Grant Thornton report: “Turkey has a young, well-educated, highly motivated and productive workforce.”
Legal lowdown
Turkish employment laws are protective, sometimes overprotective, of employees. Employers are restricted in terminations. The recent enactment of the Occupational Health and Safety Law puts many obligations on employers, and any breaches incur heavy sanctions.
From the HR ?frontline
“Demand for talent is higher than supply, making top talent an expensive and scarce resource. Perception might be that talent is cheap, but experienced people come with high compensation packages. Senior manager wages are more than 12 times higher than entry-level wages.
“Change is more frequent than in mature economies. There are times when you need to rebuild your strategy from scratch. This environment of constant change keeps you fit – many Turkish managers have good crisis management skills.”
Pinar Akkaya, managing director, Signature Consulting; and managing consultant, Gras Savoye Signature
Indonesia
Economic briefing
While growth has deteriorated somewhat, rating agency Moody’s forecasts 5% to 6% growth for 2013 and 2014, making it the second-fastest-growing economy in the G20. However, while the economy remains strong, employment growth has been slower than population growth.
Potential ?talent pool
Indonesia is in the middle of ?its development plan, which focuses on, among other things, promoting the quality of human resources. More than half of the population is aged under 29, and the Government is investing 20% of total expenditure on education. Most university students graduate in either finance and economics (28%) or engineering and sciences (27.5%).
Legal lowdown
The power of the labour unions has grown considerably since the fall of president Suharto in 1998. Demonstrations and industrial action are commonplace, as unions and employees have become more assertive. In 2013, the minimum wage was raised by approximately 40%. Termination at will is not recognised and all terminations are subject to the approval of the Indonesian Labour Court.
From the HR frontline
“[Since the fall of Suharto], Indonesia has gone for people power in a big way. They have accepted democracy a lot better than those in many other countries and have made a good transition.”
Gordon Headley, chief HR officer, Tullow Oil
Check back tomorrow for HR's guide to India, China, South Africa and Mexico.
To read part one of the guide, click here.
