Consulting
Performance, Reward, and Talent
Consulting
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Performance, Reward, and Talent
Global Salary Planning Report
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2012–2013
Proprietary & Confidential | Legal Disclaimer
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Table of Contents
1
Global Salary Increase Survey Report Availability
Overview of Survey Results
4
6
Promotional and Salary Structure Movement
Global Broad-Based Short-Term Incentives
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Global Broad-Based Long-Term Incentives
Global Sales Compensation
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Survey Highlights and Insights
9
11
15
18
Rewarding and Retaining High-Performing Employees
21
Macroeconomic Indicators
23
Appendix
Definitions and Terms
26
29
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Number of Participants per Country
25
2012–2013 Global Salary Planning Report
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Survey Highlights and Insights
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This report presents the results of the 25th annual Global Salary Increase Survey conducted by
Aon Hewitt. The survey focuses on overall changes in employee compensation for the calendar year
2012, and on current projections for 2013. The survey spans over 100 markets with 14,165 country
submissions received during July and August. Participants include service, manufacturing, and multiindustry organizations.
2012–2013 Global Salary Planning Report
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Survey Highlights and Insights
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How Data is Collected
The survey data is collected through multinationals that submit multicountry data and also from
companies that are recruited locally and submit data for one single country. The salary increase budget
information reported in this report encompasses data for all companies. The compensation practices
section includes short- and long-term incentive variable pay, global sales compensation, and rewarding
and retaining high-performing employees. This section only includes information of those companies
reporting global compensation policies.
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Nearly 600 companies submitted data for more than one country. The average number of submissions
was 17.
Key Insights
Economic and political global uncertainty is casting a pall over the compensation budgeting process for
2012. Organizations continue to remain apprehensive about increasing their fixed costs. Overall net
actual salary increases for 2012 vary by region. Average real increase is defined as salary increase
minus consumer pricing index.
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Average Real Increase
2.34%
-0.05%
-1.24%
0.23%
-0.56%
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0.45%
Asia
Europe
2012–2013 Global Salary Planning Report
Latin America
North America
Africa
Middle East
2
Special Note
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Projected salary increase spending for 2013 remains flat for most of the countries. This also includes
countries where the gross domestic product (GDP) projections for 2013 is higher than average. Companies
are instead increasing their reliance on variable forms of rewards. Details on variable spending can be found
in the country reports or in our Global Variable Compensation Measurement™ (VCM™) survey.
Occasionally we are asked how survey antitrust rules apply to collecting and reporting salary increase
information. In fact, some organizations request that they receive the report with any prospective
information removed. Aon Hewitt believes that, because such data (as is presented in this report) is
widely available and is sufficiently general in nature, it falls within standard survey safe harbor guidelines.
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However, if your company’s legal counsel suggests taking a more conservative approach, we can provide
a version of the report that excludes projected data.
2012–2013 Global Salary Planning Report
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Global Salary Increase Survey Report
Availability
2012–2013 Global Salary Planning Report
4
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Global Salary Increase Survey Report Availability
Asia Pacific
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Australia
China
Fiji
Guam
Hong Kong
India
Indonesia
Japan
Korea
Macau
Malaysia
New Zealand
Papua New Guinea
Philippines
Singapore
Sri Lanka
Taiwan
Thailand
Vietnam
Europe/Middle East/
Africa
Sa
Angola
Austria
Azerbaijan
Bahrain
Belgium
Botswana
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Switzerland
Tanzania
Tunisia
Turkey
Uganda
Ukraine
United Arab Emirates
United Kingdom
Yemen
Zambia
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Canada
United States
Egypt
Estonia
Finland
France
Georgia
Germany
Ghana
Gibraltar
Greece
Hungary
Ireland
Israel
Italy
Jordan
Kazakhstan
Kenya
Kuwait
Latvia
Lebanon
Lithuania
Luxembourg
Malta
Morocco
Mozambique
Netherlands
Norway
Oman
Poland
Portugal
Qatar
Romania
Russia
Saudi Arabia
Serbia
Slovakia
Slovenia
South Africa
Spain
Sweden
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North America
Latin America
Antigua
Argentina
Bahamas
Barbados
Bermuda
Bolivia
Brazil
Chile
Colombia
Costa Rica
Dominican Republic
Ecuador
El Salvador
Guatemala
Honduras
Jamaica
Mexico
Netherlands Antilles
Nicaragua
Panama
Peru
Puerto Rico
Trinidad and Tobago
Uruguay
Venezuela
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You may purchase detailed survey results from any of the countries above. The 25 annual Global Salary
Planning Report will be available in September 2012. For an order form or additional information, please
send an email to [email protected].
2012–2013 Global Salary Planning Report
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Overview of Survey Results
2012–2013 Global Salary Planning Report
6
Average Excluding Zeroes and Pay Cuts
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
General
DEF
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
General
GHI
Middle
Management
Jr. Management/
Professional/
Supervisor
Clerical/
Admin/Tech
Manual/
Work Force
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ABC
Top Executive/
Sr. Management
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All
Employees
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Salary Increases—XYZ Region
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
JKL
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General
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
General
MNO
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
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General
2012–2013 Global Salary Planning Report
7
Average Including Zeroes and Pay Cuts
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
General
DEF
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
General
GHI
Middle
Management
Jr. Management/
Professional/
Supervisor
Clerical/
Admin/Tech
Manual/
Work Force
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ABC
Top Executive/
Sr. Management
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All
Employees
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Salary Increases—XYZ Region
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
JKL
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General
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
General
MNO
2012
2013 Projected
2012
Merit
2013 Projected
2012
Mandatory
2013 Projected
2012
Total
2013 Projected
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General
2012–2013 Global Salary Planning Report
8
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Promotional and Salary Structure Movement
2012–2013 Global Salary Planning Report
9
Promotional Budget
(%)
2013
2012
2013
Salary Structure Movement
(%)
2012
2013
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2012
Special Adjustments and/or
Miscellaneous Budget (%)
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Additional Country Info—XYZ Region
ABC
Average
Count
DEF
Average
Count
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GHI
Average
Count
JKL
Average
Count
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MNO
Average
Count
2012–2013 Global Salary Planning Report
10
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Global Broad-Based Short-Term Incentives
2012–2013 Global Salary Planning Report
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Global Broad-Based Short-Term Incentives
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Trends on Short-Term Incentive Variable Pay Plans
We have asked our global participants to provide information in regards to their short-term variable pay
plans.
Short-Term Incentive Variable Pay Plans
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Sixty percent (60%) of companies indicated having a short-term variable pay plan that extended eligibility
beyond their executives and sales employees.
Unsure
2.0%
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No Program
38.0%
With Program
60.0%
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(n=340)
2012–2013 Global Salary Planning Report
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Global vs. Regional or Local Plans
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Less than 15% of our global salary increase participants reported having a local variable pay plan.
Twenty percent (20%) of manufacturing companies reported having a local plan. This means that the
large majority of multinationals around the globe apply the same plan at the regional or global level. Hightech and telecommunication companies are more likely to have corporate plans than other industries.
Corporate
20.0%
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Regional
20.0%
Regional
Business Line
20.0%
Global
Business Line
19.0%
Local
20.0%
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(n=295)
Adjustments Made by the Company by Country
2011 Percent of Organizations1
2012 Percent of Organizations1
(n=)
(n=)
No Adjustments Are Made
Eligibility Criteria
Targets
Measures
1
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Multiple responses
2012–2013 Global Salary Planning Report
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Changes in Variable Pay Plan
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We have asked participants what changes they will make in their global regional variable pay plan
in 2013.
Extending Coverage of
This Plan to Additional
Employee Groups
5.0%
5.0%
5.4%
5.8%
2.0%
Increase Expected
Award Opportunities
6.3%
2.4%
3.0%
Decrease Expected
Award Opportunities
Change Performance
Criteria
2.3%
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1.0%
Reduce Number of
Employee Groups
5.0%
2.4%
0.0%
3.3%
5.0%
5.7%
5.4%
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Change Funding
Formula
5.0%
3.0%
Additional
Communication/Training
5.0%
6.3%
5.0%
Reduce
Communication/Training
6.0%
5.2%
6.0%
5.2%
5.4%
Change Plan Objectives
8.0%
Discontinue the Plan
3.6%
Other
No
8.8%
6.0%
9.6%
Unsure
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Yes
6.9%
2012–2013 Global Salary Planning Report
14
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Global Broad-Based Long-Term Incentives
2012–2013 Global Salary Planning Report
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Global Broad-Based Long-Term Incentives
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We have asked our global participants to provide information in regards to their long-term variable pay
plans.
Trends on Long-Term Incentive Variable Pay Plans
With Program
65.0%
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No Program
35.0%
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Sixty-five percent (65%) of participants reported having a long-term incentive plan that applies to multiple
countries. Life sciences, high-tech, and chemical companies are more likely to have global long-term
incentives, while consumer goods and manufacturing companies tend to have less of these plans.
(n=336)
Plans Offered by Company
2011 Percent of Organizations1
2012 Percent of Organizations1
(n=)
(n=)
Equity-Based
Cash-Based
Both
1
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Multiple responses
2012–2013 Global Salary Planning Report
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Variation of Company's Grant Guidelines by Location
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Forty-five percent (45%) of the companies that grant long-term incentives use the same grant guidelines
globally.
By Country
20.0%
Vary by Global
Region
25.0%
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(n=246)
Does Not Vary
45.0%
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By Tiers
10.0%
Change in Global Long-Term Incentive Policy
Change in Global
LTI Policy in Next
1–2 Years
15.0%
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Change in Global
LTI Policy in Past 3
Years
(n=291)
2012–2013 Global Salary Planning Report
85.0%
64.5%
35.5%
Yes
No
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Global Sales Compensation
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Global Sales Compensation
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Trends on Global Sales Compensation
Unlike short- and long-term incentive plans, sales incentive plans are mostly local or regional in nature.
However, there is a great variation across industries. High-tech companies are more likely to have
corporate or global business line plans, while consumer goods and life sciences are 10 times less likely to
have these plans.
Global Business
Line
20.0%
Regional
20.0%
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Regional
Business Line
20.0%
Corporate
20.0%
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No
20.0%
(n=309)
Responsibility for the Design and Management of the Plan
Percent of Organizations1
Human Resources
Finance
Sales
Other
1
(n=)
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Multiple responses
2012–2013 Global Salary Planning Report
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23.5%
68.4%
31.6%
Yes
No
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(n=240)
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Change in Sales
Plan in Past 3
Years
76.5%
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Change in Sales
Plan in Next 1 to 2
Years
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Change in Sales Plan
2012–2013 Global Salary Planning Report
20
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Rewarding and Retaining High-Performing
Employees
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Rewarding and Retaining High-Performing Employees
Approaches
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We have asked our global salary increase participants what unique strategies they use to retain highperforming employees.
Percent of Organizations1
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Provide Additional Learning and Development Opportunities to
High-Performing Employees
Reserve Portion of Salary Increase Budget for Highest
Performing Employees
Grant Discretionary Restricted Stock and/or Stock Options to
High-Performing Employees
Offer Retention Bonuses for Specified Period of Employment
Create Supplemental, Discretionary Incentive Pool for HighPerforming Employees
None
Other
1
Multiple responses
(n=)
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The lack of development opportunities ranks first on the reasons for attrition globally. Only 29% of the
companies use this as a strategy to retain high-performing employees.
2012–2013 Global Salary Planning Report
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Macroeconomic Indicators
2012–2013 Global Salary Planning Report
23
GDP
Country
2011
2012
2013
2011
2012
2013
2011
2012
2013
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ABC
DEF
GHI
JKL
MNO
Source: Economist Intelligence Unit
Recorded Unemployment
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Region
XYZ
XYZ
XYZ
XYZ
XYZ
CPI
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Macroeconomic Indicators
2012–2013 Global Salary Planning Report
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Appendix
2012–2013 Global Salary Planning Report
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Report Definitions
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Definitions of Terms
The following are brief definitions of some of the concepts that are used throughout this report.
Top Executive/Senior Management
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Top executives and senior managers play a key role in both short- and long-term decision-making of a
major function area or business unit, direct or coordinate activities within two or more major departments,
establish policy, and have a major impact on the achievement of the business unit or function goal.
Example: Country manager and direct reports
Middle Management
Middle management are first-line managers, who manage the activities of one major department and setup standard procedure and policy or lead projects or programs which have broad effect on overall policy
and achievement of organization-wide objectives.
Example: Plant manager, business unit controller, marketing manager, systems manager
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Junior Management/Professional/Supervisor
Provide day-to-day management of a team, has knowledge of a specialized field of technical or
administrative function and resolve problems of some difficulty, could be supervising a team or individual
contributor or be an entry-level professional.
Example: Production engineer/production planning manager, key account manager systems analyst,
business process team leader
Clerical/Admin/Tech
Administrative and support level staff.
Example: Administrative employee—sales trainee, merchandiser, business process associate—junior
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Manual Workforce
Employees in positions such as skilled-production worker, unskilled-production worker, and warehouse
handler.
Example: Assembler, loaders etc.
2012–2013 Global Salary Planning Report
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Data Collection Terms
Mandatory Salary Increase Budget
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The following are brief definitions of some of the concepts that are used within the data collection
materials.
This is an increase that is mandated by either a government or by a union. It could apply to the entire
company or to different groups in the organization.
Merit Salary Increase Budget
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The amount of any nonguaranteed, individual performance-based increases, including merit lump sums.
The budget percentage is calculated by dividing the sum of increases granted/anticipated in the year,
divided by the total salaries of all eligible employees, whether or not they received a merit increase.
Note: For India the numbers represent a percent of total fixed pay.
General Salary Increase Budget
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Any increases given over and above the merit salary and mandatory increase. The budget percentage is
calculated by dividing the sum of increases granted/anticipated in the year, divided by the total salaries of
all eligible employees, whether or not they received a general increase. General increase includes market
correction, special adjustment and promotional budgets.
Note: For India the numbers represent a percent of total fixed pay.
Total Salary Increase Budget
The total amount of all increases combined (that is, merit increases plus general increases plus
mandatory salary increases).
Note: For India the numbers represent a percent of total fixed pay.
Special Adjustment and/or Miscellaneous Budget
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The amount of any salary adjustment granted to an employee for a special, or unique, situation that is not
typically covered by a merit increase. This would include market, equity, or "hot skills" adjustments. The
budget percentage is calculated by dividing the sum of increases granted/anticipated in the year, divided
by the total salaries of all eligible employees, whether or not they received a special adjustment and/or
miscellaneous increase.
Note: For India the numbers represent a percent of total fixed pay.
2012–2013 Global Salary Planning Report
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Promotional Budget
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The amount of any promotional increase granted to an employee for receiving a promotion. The budget
percentage is calculated by dividing the sum of increases granted/anticipated in the year, divided by the
total salaries of all eligible employees, whether or not they received a promotional increase.
Note: For India the numbers represent a percent of total fixed pay.
Salary Structure Movement
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This is an increase that is applied to the salary grades and bands to reflect movements in the market. In
other words, this represents an increase to the salary structure and not an individual or employee group
increase.
2012–2013 Global Salary Planning Report
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Participants
Angola
13
Antigua
7
Argentina
Aruba
140
11
Australia
302
Austria
159
Bahamas
Bahrain
Barbados
Belgium
Belize
Bermuda
Bolivia
Botswana
308
34
Germany
336
Ghana
25
Gibraltar
22
Greece
165
Guam
21
14
Guatemala
34
37
Guernsey
20
18
Guyana
11
Haiti
13
10
Honduras
22
14
Hong Kong
365
19
Hungary
139
11
India
662
Indonesia
151
Ireland
149
212
206
Bulgaria
63
Canada
679
Cayman Islands
Participants
Georgia
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Brazil
30
France
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Azerbaijan
Country
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Country
rt
Number of Participants per Country
11
Isle Of Man
19
Israel
88
Chile
106
Italy
China
645
Jamaica
259
23
93
Japan
297
Costa Rica
52
Jordan
34
Croatia
59
Kazakhstan
68
Cyprus
28
Kenya
37
Czech Republic
184
Korea
345
Denmark
152
Kuwait
35
Dominican Republic
34
Latvia
53
Ecuador
38
Lebanon
36
Egypt
84
Lithuania
53
El Salvador
28
Luxembourg
67
Estonia
54
Macau
44
Fiji
22
Malawi
12
Sa
Columbia
Finland
2012–2013 Global Salary Planning Report
127
Malaysia
235
29
Malta
Mexico
31
212
Morocco
47
Mozambique
14
Netherlands
231
New Zealand
Nicaragua
Norway
Oman
Panama
Papua New Guinea
Peru
Philippines
Poland
Portugal
13
148
18
136
South Africa
Spain
Sri Lanka
Suriname
Participants
157
240
46
8
Sweden
191
Switzerland
219
Taiwan
205
Tanzania
13
Thailand
209
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Netherlands Antilles
Country
rt
Participants
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Country
28
Trinidad And Tobago
20
37
Tunisia
33
26
Turkey
146
69
Uganda
14
164
Ukraine
79
206
United Arab Emirates
185
135
United Kingdom
447
58
United States
Qatar
47
Uruguay
34
Romania
113
Vanuatu
16
Russia
194
Venezuela
53
Saipan
21
Vietnam
120
Saudi Arabia
76
Yemen
11
Serbia
57
Zambia
12
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Puerto Rico
304
Zimbabwe
Slovakia
109
Grand Total
Slovenia
54
9
14,165
Sa
Singapore
1,306
2012–2013 Global Salary Planning Report
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About Aon Hewitt
© 2012 Aon plc. All rights reserved.
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www.aonhewitt.com
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Aon Hewitt is the global leader in human resource solutions. The company partners with organizations to
solve their most complex benefits, talent and related financial challenges, and improve business
performance. Aon Hewitt designs, implements, communicates, and administers a wide range of human
capital, retirement, investment management, health care, compensation, and talent management
strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better
place to work for clients and their employees. For more information on Aon Hewitt, please visit
To protect the confidential and proprietary information included in this material, it may not be disclosed or
provided to any third parties without the prior written consent of Aon Hewitt.
Aon Hewitt does not accept or assume any responsibility for any consequences arising from any person,
other than the intended recipient, using or relying on this material.
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Authorized and regulated by the Financial Services Authority.
2012–2013 Global Salary Planning Report
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