Mercer Short Duration Fixed Income Fund Class Y-3 · NASDAQ:MSDYX
Mercer Short Duration Fixed Income Fund Class Y-3 — Mercer — Investor Presentation (2022)
38 slides from Mercer Short Duration Fixed Income Fund Class Y-3's investor presentation, 2022
Slide 1: Latin America C&B Trends 2022
welcome to brighter Latin America C&B Trends 2022 Valeria Bohórquez | Mercer Francisco Giacosa | Mercer Roberto Hernández | Mercer A business of Marsh McLennan
Slide 2: Speakers
Speakers > Valeria Bohorquez Francisco Giacosa Roberto Hernandez Career Product Leader LATAM Client Solutions Team Leader LATAM C&B Product Leader LATAM valeria.bohorquez@mercer.com francisco.giacosa@mercer.com roberto.hernandez@mercer.com fin} valeria-bohdrquez ‘in| franciscogiacosa fin} robertoher
Slide 3: Agenda
01 Market Context Economic outlook, Salary movements 03 Compensation & Benefits Overview 02 Workforce & Talent Trends 04 Gender, Age, Tenure & Pay Gap Mercer 3 3
Slide 4: Market Context
Market Context Economic outlook & Salary movement 4
Slide 5: Unfavorable international context for 2023
Unfavorable international context for 2023, with forecasts for a deceleration in both global growth and trade, higher interest rates, and less global liquidity Nominal and real GLOBAL LATAM 14 salary increase 8 7,5 12 7 5,8 10 6 5,0 5 8 4 3,6 3,6 6 5 3,0 2,7 3,0 3 2,1 4 2,9 3,4 2,0 2,8 2 1,8 1,6 2 1
Slide 6: Major devaluations in Argentina, Colombia and Chile last year
Major devaluations in Argentina, Colombia and Chile last year COLOMBIA MEXICO C: PESO (COP) C: PESO (MXN) 2021: 3,793 2021: 20.55 20% 2% 2022: 4,553 2022: 20.13 PERU C: SOL (PEN) 2021: 4.09 BRAZIL 4% C: REAL (BRL) 2022: 3.92 2021: 5.40 0% 2022: 5.39 CHILE C: PESO (CLP) ARGENTINA C: Currency 2021: 80
Slide 7: Inflation is running hot around the world
Inflation is running hot around the world, the questions are when it is slowing down and what are the ramifications Sweden 10.84% 3.87% Germany Russia 9.99% Estonia Canada Ireland 22.65% 16.7% 7.01% UK 5.31% 8.39% 4,80% 8.17% 8.60% 12.14% 5.52% Poland 4.8% France 16.10% US 8.6% 5.57% Turkey 8.20% 2.
Slide 8: 2022 salary increases are below inflation in most markets
2022 Salary increases are below inflation in all markets except Brazil & Panama; stagflation risk due to slowing growth and rising inflation Inflation 12,0 95,4 11,4 Salary increase 84,0 10,0 8,8 8,4 7,8 7,6 6,9 6,3 5,7 4,6 3,1 Argentina Brazil Chile Colombia Mexico Panama Peru Source: Latin America
Slide 9: 2023 budgeted salary increases over inflation
2023 budgeted salary increases over inflation to compensate 2022 or expecting higher real inflation? Inflation Salary increase 88,6 10,3 72,0 9,3 9,0 7,8 7,1 5,8 5,4 5,3 4,8 3,3 3,4 3,0 Argentina Brazil Chile Colombia Mexico Panama Peru Source: Latin America Economic Trends October 2022 Mercer 9
Slide 10: Will companies factor inflation into 2023 merit budgets?
Will companies factor inflation into 2023 merit budgets? 60% Significantly increased salary demands across all roles/skills 40% Significantly increased salary demands only for talent and skills in-demand for my industry/sector 15% A loosening of the labour market 11% Shift to an output-based salary
Slide 11: Companies facing the heightened inflation situation
Companies facing What actions are companies considering for managing the rising inflation? the heightened inflation situation Standard salary review with Explaining and no change to review effective providing guidance on date cost-of-living and cost of labor Conducting additional salary reviews targ
Slide 12: Workforce & Talent Trends
Workforce & Talent Trends Latin America 12
Slide 13: Hiring intentions
3 Hiring intentions Companies in Latin America planned to hire more in 2022, but the 2023 is uncertain yet 13% 9% 13% 16% 18% 14% 19% 26% 33% 36% 35% 32% 38% 39% 41% 51% 41% 46% 50% 43% 44% 35% 29% 4% 44% 35% 36% 44% 34% 5% 3% 2% 3% 6% 5% 3% 7% 2% 2% 45% 4% 3% 5% 39% 35% 36% 36% 34% 31% 32% 30% 26%
Slide 14: Voluntary attrition rates are on a rise in LatAm
4 Voluntary attrition rates are on a rise in LatAm: great resignation? 11,20% 10,40% 10,40% 8,60% 8,60% 8,0% 7,4% 7,4% 8% 7,5% 8,1% 7,3% 6,40% 5,7% 2022* 5,6% 5,4% 2021 4,3% 4,6% 4,2% 2020 4,7% 3,2% Argentina Brazil Chile Colombia Mexico Panama Peru *Value projected for full year based on mid-year v
Slide 15: Employees don't want to work for you, they want you to work with them
Employees don’t There is a revolution in how we work and with whom we partner: want to work for you, 5 in 10 they want you employees will only join or stay with a company if they can work remotely/hybrid to work with them Executives recognize there is strength in numbers and are building resilience
Slide 16: The great resignation still continues
6 The great resignation still continues 6 in 10 companies in Latin America consider labor shortage as moderate to significant issue Top drivers of voluntary attrition / turnover in Americas Dissatisfaction with pay and/or ability to 77% get a higher salary at another company Personal reasons 51% Bur
Slide 17: Difficulty hiring and retaining critical talent
Yet some companies found it difficult to hire and retain critical talent Job Families more difficult to hire IT, Telecom & Internet Engineering & Science Sales, Marketing & Product Management Data Analytics & Business Intelligence Production & Skilled Trades Mercer 17 17
Slide 18: Digital Roles: positions with highest attraction difficulty
Digital Roles Top 5 positions with the highest attraction difficulty 55% DATA ANALYTICS 81% Of the companies have digital positions 41% TECHNICAL 33% ARCHITECT FULL STACK 79% Have difficulty attracting BUSINESS INTELIGENT DEVELOPMENT digital profiles 27% 19% DEVOPS 4 2 1 3 DIGITAL MARKETING 5 N = 14
Slide 19: 29% have a formal policy for retention for digital roles
29% Has a formal policy for retention for digital roles What Bonuses are offered to digital roles? Policies are based on: Hiring Referral 15% Bonus 31% Bonus Salary adjustments above the 56% market median Payment Frequency Career Development Plans 54% Project 4% 16% Bonus* 43% 26% 17% 9% Annual Otro
Slide 20: Pay for Skills: early stages for LATAM
Pay for Skills: early stages for LATAM 45% 68% 75% Didn’t develop a are not offering a targeted skill pay criteria for formal skill pay with attraction and classifying skills retention across the entire (specially hard organization (yet) skills) Mercer 20
Slide 21: Compensation & Benefits Overview
Compensation & Benefits Overview Latin America 21
Slide 22: Market pay differentials: Top and Bottom industries
2 Market pay differentials: Top and Bottom industries Highest paying industry COUNTRY TOP BOTTOM Argentina Mining 25% Retail - 23% 30% Brazil Banking/Fin services 27% Retail -19% Lowest paying industry Chile Mining 69% Retail -15% Mining & Metals Colombia Energy 49% Other Non-Manufacturing -31% -16%
Slide 23: Base Salary – IPE 59 (USD)
Regional Comparisons Base Salary – IPE 59 (USD) 180.000 90% 160.000 80% 140.000 70% 120.000 60% 100.000 50% 80.000 40% 60.000 30% 40.000 20% 20.000 10% 0 0% Argentina Brazil Chile Colombia Mexico Panama Peru 2020 2021 2022 COL NY 2022 Source: Total Remuneration Survey (TRS) Exchange Rates: 2020: ARG
Slide 24: Digital positions better paid vs. the median
Digital positions better paid vs. the median per family of the Professional Sr. P30 Profesional Sr. P30 Argentina Brazil Chile Colombia Mexico Panama Peru 23% 23% 17% 16% 20% 15% 15% 14% 14% 17% 16% 16% 12% 12% 14% 11% 10% 10% 10% 12% 10% Technical Project Scrum Master Scrum Master User Experience D
Slide 25: Short-term incentives
Short-term incentives of organizations have a short-term incentive/variable is based on business unit/ is based on individual bonus policy in Latin America* organization performance performance *Average of prevalence for Argentina, Brazil, Chile. Colombia, Mexico, Panama and Peru Management - Manage
Slide 26: Highlights on variable bonus in Latin America
Highlights on variable bonus in Latin America • In the pandemic, companies adjusted goals, plan models and reference KPIs to connect to the reality of a new scenario. • Companies are seeking to understand and adjust the mechanisms of current plans to create a better correlation between pay and resul
Slide 27: Highlights on sales incentives in Latin America
Highlights on sales incentives in Latin America 51% of companies are expecting an increase in the Sales Force size in the next 12 months, while 45% are expecting no changes. Based on 55 responses 39% of organizations offer only one Incentive Plan to employees, 22% offer two and 39% offer three or mo
Slide 28: Long-term incentives
Long-term incentives of LACBF organizations operate long- term incentives plans 1. Service-Based 2. Performance-Based 3. Stock/Shares Options Restricted Shares Units Shares/Share units • Prevalence and importance of LTI growing in Latin America 36% 32% 30% • Following the trend of more mature 23% 25
Slide 29: Reinventing the benefits after COVID-19 outbreak
Reinventing the benefits after COVID-19 outbreak Key changes in Benefits prevalence 2016 2022 % Argentina 76% 73% -3% Brazil 81% 71% -10% Chile 50% 59% 9% Colombia 71% 65% -5% Company Cars Mexico 70% 67% -4% Panama 68% 66% -2% Peru 72% 67% -5% LATAM 70% 67% -3% Argentina 45% 56% 11% Brazil 46% 64% 1
Slide 30: Company Car
Company Car 26% Head of 90% Organization 91% Sales Function / Sub- Professional function Head 37% 84% 13% 10% Coordinator / 71% 88% Senior Manager Supervisor 51% 6% 5% Manager Assigned Car Car Allowance Bonus in Lieu of Car 2018 2022 Source: 2022 Total Remuneration Survey Note: The result can exceed
Slide 31: Adapting benefits: new allowances linked to working remotely
Adapting benefits: new allowances linked to working remotedly 56% Voucher for home- 21% office expenses* Allowance for 17% daycare or babysitter 33% Allowance for 12% physical activities N=591 7% 3% 2% Less 20 USD 21 - 50 USD 51 - 80 USD 81 - 110 USD More 110 USD *Public services, internet, tv cable
Slide 32: Gender Highlights
Gender Highlights Latin America 32
Slide 33: Slow increase of female representation in latest years
Slow increase of female representation in latest years 37% 39% 2015 2022 Mercer 33 Source: Total Remuneration Survey (TRS)
Slide 34: Female representation increased in Executives and Management
Female representation increased 2% in Executives and 1,5% in Management vs last year AGE TENURE FEMALE MALE FEMALE MALE Argentina 19.3% 80.7% 49 51 10 13 Brazil 25.1% 74.9% 46 49 7 9 Chile 17.8% 82.2% 48 49 7 9 Colombia 34.6% 65.4% 47 50 8 7 Executive Mexico 20.9% 79.1% 47 50 9 10 Panama 38.9% 61.1%
Slide 35: Stable trend in Professionals and Support roles
Stable trend in Professionals and Support roles AGE TENURE FEMALE MALE FEMALE MALE Argentina 40.3% 59.7% 38 40 7 9 Brazil 42.5% 57.5% 36 38 5 6 Chile 39.9% 60.1% 38 39 6 6 Colombia 47.1% 52.9% 37 38 6 6 Professional Mexico 36.7% 63.3% 36 38 6 6 Panama 47.8% 52.2% 37 37 6 5 Peru 45.1% 54.9% 36 38 5 5
Slide 36: Pay Gap also shows a positive though slow trend
Pay Gap also shows a positive though slow trend in latest years 0% Executives Managers Professionals -5% -10% -9% -10% -11% -12% -15% -17% -20% -21% -25% 2015 2022 Source: Total Remuneration Survey (TRS) Mercer 36
Slide 37: Q&A
Q&A Mercer 37 37
Slide 38: A business of Marsh McLennan
A business of Marsh McLennan Copyright © 2022 Mercer LLC. All rights reserved.