Mercer Serbia, Croatia, Bosnia and Herzegovina and Montenegro

C&B TRENDS IN THE REGION

WHAT HR PROFESSIONALS NEED TO KNOW ON COMP & BEN TRENDS?

28 MAY 2015

MERCER 1

INTRODUCTION

Radmila Krunic

Managing partner

Serbia, Croatia,

B&H, Montenegro

Stefan Vukajlovic

HR C&B Consultant

Serbia, Croatia,

B&H, Montenegro

ANXO group – HQ in Austria

RomaniaRepublica Moldova

Bulgaria

CroatiaBosnia & Herzegovina

SerbiaMontenegro

AustriaSlovakia

Macedonia

Our Team

MERCER

WHO WE ARE

MARSH

Insurance broker and risk advisor

GUY CARPENTER

Risk and reinsurance specialist

OLIVER WYMAN

Management consulting

MERCER

Leadership and human resource

consulting

RISK AND INSURANCE SERVICES CONSULTING SERVICES

• 140-year history.

• Serve 75% of Fortune 1000 companies.

• Growing presence in middle market and emerging economies.

• 53,000 colleagues.

• Global footprint — serving clients in more than 100 countries.

2

MERCER

MercerA GLOBAL CONSULTING LEADER

Mercer helps clients around the world advance the health, wealth, and

performance of their most vital asset — their people.

MERCER: A QUICK LOOK

• $3.9 billion in revenue.

• 65-year history.

• Offices in more than 40 countries.

• 19,000+ colleagues.

OUR CLIENTS: A QUICK LOOK

• 80% of top US public companies.

• 70% of FTSE 100 companies.

• 70% of CAC 40 companies.

• 65% of Nikkei 225 companies.

• 80% of clients <5,000 employees.

3

MERCER

Mercer’s four business segments are aligned to serve client needs.

MercerCOMPREHENSIVE SOLUTION SET

• Benefit exchanges.

• Benefit strategy and design.

• Individual and voluntary

benefits.

• Benefit plan management

and brokerage.

• Specialty health and benefits.

• Benefits administration.

• Forecast talent needs.

• Engage employees.

• Mobilize workforce.

• Reward performance.

• Assess talent.

• Develop skills.

CLIENTS

• Integrated defined benefit

risk management.

• High-performing defined

contribution plan.

• Comprehensive plan

management and

administration.

• Innovative plan design.

• Integrated defined

benefit risk

management.

• Defined contribution

plan investments.

• Endowments and

foundations.

• Wealth managers.

TALENT

HEALTH RETIREMENT

INVESTMENTS

4

MERCER

HIGHER MEDIAN

REVENUE IN WEST

MEDIAN NET SALES REVENUEhighest – lowest

United Kingdom – Moldova

€ 153,14 mln – € 3,04 mln

EMEA TRS SURVEYS Overview

199%

Source: 2014 TRS Surveys (based on 30 published surveys)

TOP 5 MEDIAN FTEs64%

HIGHER MEDIAN

FTE IN WEST

# OF ORGANIZATIONS

WEST EAST

31% 34%

Change since 2011

Change since 2011

350 285 279 252 240

2,5664,188

BIGGEST MARKETS BY EEs:

1. 164,645 in 468 Orgs

2. 163,220 in 318 Orgs

3. 155,305 in 519 Orgs

4. 143,074 in 382 Orgs

5. 130,347 in 475 Orgs

GLOBAL JOBS

REPORTED660

5

MERCER

PARTICIPANT

COMPANIES

GLOBAL JOBS

SURVEYED126MEDIAN NET SALES REVENUE MEDIAN FTE2,943 mil RSD 79

Serbia, Croatia, Bosnia and Herzegovina and Montenegro TRS Survey Overview

532

6

PARTICIPANT

COMPANIES70

PARTICIPANT

COMPANIES41

PARTICIPANT

COMPANIES13

MEDIAN NET SALES REVENUE MEDIAN FTE132 mil HRK 30

MEDIAN NET SALES REVENUE MEDIAN FTE22 mil BAM 46

MEDIAN FTE 658 mil EUR

MERCER

2014 TRS Survey OverviewParticipants – Industry SECTOR Representation

Consumer goods

7

MERCER 8May 31, 2015 8

Source: Global Compensation Planning Report, July 2014

-5

0

5

10

15

20

25

30

35

40

45

Un

ite

d S

tate

s

Bra

zil

Ch

ina

Ind

ia

Ire

lan

d

Sw

itze

rla

nd

Gre

ec

e

Sp

ain

Fra

nc

e

Ita

ly

Ge

rma

ny

UK

Lit

hu

an

ia

Slo

ve

nia

Hu

ng

ary

Po

lan

d

Ro

man

ia

Se

rbia

Cro

ati

a

B&

H

Tu

rke

y

Ru

ss

ia

Ukra

ine

Sa

lary

In

cre

as

e %

Salary increases GDP Inflation Unemployment

Economic context 2014A high level view

MERCER 9May 31, 2015 9

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

AT BE CH DE DK ES FI FR GR IE IT NL NO PT SE UK

2008 2014 Average 2008 Average 2014

2008 vs. 2014 salary increasesWE – all levels

Source: June 2014 Salary Movement Snapshot

On average 1,72% drop in salary increases in the WE region 2014 vs. 2008

MERCER 10May 31, 2015 10

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

BG CZ EE HR HU KZ LT LV PL RO RU RS SK SI TR UA

2008 2014 Average 2008 Average 2014

2008 vs. 2014 salary increasesCEE – all levels

Source: June 2014 Salary Movement Snapshot

On average 5,98% drop in salary increases in the CEE region 2014 vs. 2008

MERCER

2015 budgeted salary increases in the ZoneMarch 2015 vs December 2014 data

11May 31, 2015

Source: December 2014, March 2015 SMS results

0%

3%

6%

9%

12%

CZ HU RS PL RO BH RU HR

2015 Budegsted SalaryIncreases (Dec-2014 data)

2015 Budgeted SalaryIncreases (Mar-2015 data)

2015 Inflation %(forecast)

MERCER

2014 actual salary increasesPerformance matrix

21%

21%

21%

22%

25%

28%

69%

70%

68%

70%

67%

63%

10%

9%

11%

8%

8%

10%

0% 20% 40% 60% 80% 100%

Italy

Germany

France

United Kingdom

Switzerland

Portugal

Distribution of employees by performance rating

Top Performers

Standard

Performers

Low Performers

Source: Mercer EMEA SMS September 2014

12

MERCER

Factors determining individual salary increasesRegion Serbia, Croatia, Bosnia and Herzegovina and Montenegro

13

MERCERMay 31, 2015

Para-Professional

ProfessionalManagementExecutive

0 €

25,000 €

50,000 €

75,000 €

100,000 €

125,000 €

150,000 €

175,000 €

200,000 €

BG HR RO RU

0 €

25.000 €

50.000 €

75.000 €

100.000 €

125.000 €

150.000 €

175.000 €

200.000 €

CH DE UK NO

PL

FRSource: Mercer Total Remuneration Surveys 2013

EASTERN

WESTERN

Pay progressionCareer streams

3

7,5

RS

6,5

14

6

MERCER 1515

2014 Serbia TRS

HOT JOBS:• Manufacturing• Sales• IT&C• Finance • Industry specific jobs

Voluntary Staff Turnover

3% 2%

24%

2%

21%22%

0%

5%

10%

15%

20%

25%

30%

% 3% 22% 2% 24% 2% 21%

2012 Unemployment 2012 2013 Unemployment 2013 2014 Unemployment 2014

MERCER

Regional Pay Differences within CountriesPROFESSIONALS, Capital vs Outside of Capital

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-8,000

0

8,000

16,000

24,000

32,000

40,000

48,000

56,000

64,000

72,000

80,000Capital Outside of Capital Difference

16

MERCER

Regional Pay Differences within CountriesEXECUTIVES, Capital vs Outside of Capital

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Capital Outside of Capital Difference

17

MERCER 1818

Remuneration Mix Around the WorldManagers in Finance

Source: Strucuture of Salaries Around the World

71%

71%

69%

66%

78%

81%

62%

50%

46%

35%

86%

13%

5%

28%

6%

16%

7%

14%

30%

47%

55%

7%

16%

24%

3%

27%

6%

12%

24%

20%

7%

10%

7%

0% 25% 50% 75% 100%

China

Netherlands

Saudi Arabia

Belgium

Serbia

Croatia

Brasil

Portugal

United Arab Emirates

India

Romania

Base Salary Allowances and Variable Pay LTIs and Benefits