1. The impact of emerging markets on the compensation & talent strategies of organisations www.pwc.nl 29 November 2013

2. PwC Agenda Update on PwC Milennial Research Outlook towards 2014 and beyond 2

3. PwC Talent Mobility 2020 – Key Findings Emerging markets will create a significant shift in mobility patterns There will be 50% growth in assignments by 2020 More assignees, more travel, more virtual tools, and especially more quick, short-term tours and commuter arrangements Mobility strategies will become more sophisticated and complex but simpler in design The millennial generation (born between 1980 and 2000) will view international exposure / assignments as a rite of passage As companies venture into new territory we will see an increase in collaboration across businesses and with governments Compensation levels across some skill sets and industries will begin to harmonise across the globe Technology and compliance will come together like never before 3 29 November 2013 RES Forum

4. PwC PwC Research on Milennials: the workplace in 2020 Born between 1980 and 2000 80% wants to work abroad 70% expects they need a foreign language for being succesful in their career 94% Beliefs that they will work more international than their parents Out of the box reward strategies Want to have influence on how they would like to do their work Expect to shift jobs every 2-3 year ….. 4 29 November 2013 RES Forum

5. PwC Milennial Research: main conclusions still valid for mobility trends What has been confirmed IM will grow, less Long Term Assignments Increase of non moving family and or partners for assignments Lower job levels and specialists become more mobile / are expected to be more mobile New directions and destinations More complexe mobility programs and policies Technology becomes more important for enabling control Mobility department has to become more strategic in adding value 5 29 November 2013 RES Forum

6. PwC ….but slowing down Countries introduce strict visa rules for protecting their domestic labor market What do they really want? In times of crisis? - Nice job - Fair salary - Nice work environment ….and that’s it? The chanses of being audited for non compliance are currently almost non existing…however, governments are getting awake…. 6 29 November 2013 RES Forum

7. PwC …but how different are Milennials? Intention of leaving within 12 months is high; but is that different compared to non millennials at the same age? Millennials are more positieve on their employer (great place to work) compared to Baby Boomers / Gen X at the same age Opportunities for growth are asessed more positive by Milennials Millennials are more saftisfied on recognition than their age peers in Gen X and Baby Boom; the same applies on manager satisfaction (having a great boss) * Source: kenexa: attitude? What attitude: www.khpi.com 7 29 November 2013 RES Forum

8. 2014 and beyond www.pwc.nl

9. PwC Global Mobility trends – facts and figures 24% of CEOs say talent constraints mean growth targets won’t be met in overseas markets 78% of CEOs expect to make changes to their strategy for managing talent in the next 12 months Only 18% of CEOs feel they receive comprehensive data on the return on investment in human capital spend 58% of CEOs see availability of key skills as a threat to growth prospects Only 30% of CEOs are ‘very confident’ they will be able to access the talent they need in next 3 years Source: PwC 16 th Annual Global CEO Survey, 2013 9 29 November 2013 RES Forum

10. PwC Global nomads How the world is changing Multi-state commuters Remote working Commuters Substance / PE challenges Short-term assignments 10 29 November 2013 RES Forum

11. PwC Market context How talent mobility is evolving Old state (1990 – c. 2010) Increasing diversity in expatriate destinations, driven by globalisation and offshoring Flow of talent predominantly West to East Formal assignments remain the norm but variations (Commuter, Rotational) emerge New state (2020) Global mobility continues to grow in volume Mobility of talent is fluid. Companies need to match the right employee with global business needs and global and regional talent programmes Traditional assignment policies and frameworks adapt to these changes – now includes business travellers, ‘talent swaps’, ‘expat lite’, strong mobility ‘career deal’ 11 29 November 2013 RES Forum

12. PwC Mobile population is increasing 12 29 November 2013 RES Forum

13. PwC Returning home with new acquired knowledge and competences We are seeing increasing numbers of employees returning home with their new-found skills and experience to exploit emerging opportunities in their countries of origin These returning nationals typically command better remuneration than their local counterparts HR professionals need to be prepared to manage the career and remuneration expectations of these East-West-East pioneers 13 29 November 2013 RES Forum

14. PwC Shift in mobility patterns and drivers The growing importance of new markets will create a significant shift in mobility patterns and an ever greater pressure on recruiting and retaining the best talent Mobility strategies will become more sophisticated and complex but simpler in design Demand for qualified/talented people will be high… and the needs of the employee population will be highly differentiated across three generations of employees 14 29 November 2013 RES Forum

15. PwC New mobility directions require new mobility strategies A host country approach works well in case of a move from a developing jurisdiction to a more developed jurisdiction; the other way around is difficult. A home country approach with extreme differences between home and host country compensation does not work. Intra regional compensation and benefits is levelling within Europe; the same is expected for Asia. This encourages host country package strategies. The importance of country benefits will reduce (especially pension), and will open up opportunities for a host country approach. The importance of home country benefits is less significant for developing countries. Why should an employee / assignee return to their home developing home country? 15 29 November 2013 RES Forum

16. PwC Compensation in developing countries is different Retention / Staff Turnover Differences on country basis are significant Cash is king, non financial benefits start becoming more important 16 29 November 2013 RES Forum

17. PwC Compensation in developing countries is different Shares have high value for attracting and retaining senior employees in BRICS Regional differences Source: Making executive pay work, PwC 2012 Source : AON 2010 17 29 November 2013 RES Forum

18. PwC Increased harmonisation between business and government is on the horizon 18 29 November 2013 RES Forum

19. PwC Collaboration of business and governments An increase in collaboration across businesses and with governments to co-invest in sustainable initiatives for the region from which both assignees and the local population can benefit. But for now, the reality is different: Rules for visa in developed countries are linked to quota for recruiting / training local staff. Visa rules are used for protecting the local labor market in both developed and developing markets. Developing countries realise they host foreign workers with relatively high salaries and want to collect the best share of taxes. 19 29 November 2013 RES Forum

20. PwC Businesses should plan ahead to tackle challenges such as visa roadblocks and tax treaty issues These will gain in importance on the global stage. PwC doesn't expect taxes to become globalised through a global tax treaty any time too soon but do see a trend towards tax clearance requirements. But we believe that tax authorities will gain more consistency about the definition of what constitutes a day of presence and what type of activity determines taxable presence — along with having sophisticated tax collection enforcement mechanisms in place. 20 29 November 2013 RES Forum

21. PwC Companies will have primary responsibility for reporting on where their employees have been and the wage allocations associated with their whereabouts GPS tracking, which may be an accepted norm within the next five to seven years, is just one component of the tracking process Employees, companies, and vendors will supplement positional data with other data points to allow for conversion into meaningful wage sourcing data 21 29 November 2013 RES Forum

22. PwC Bridging the gap to 2020 Your strategy your future 22 29 November 2013 RES Forum

23. PwC Is your workforce sourcing strategy (including mobility strategy) fit for the future? Your strategy your future 23 29 November 2013 RES Forum

24. PwC Do you have an employee engagement strategy that suits a new world? How do you engage to retain key talent? How do you accommodate regional / cultural differences? 24 29 November 2013 RES Forum

25. PwC Questions? Henk Zeilstra Henk.zeilstra@nl.pwc.com More information: http://www.pwc.com/gx/en/hr-management- services/publications/making-executive-pay-work-the-psychology-of- incentives.jhtml http://www.pwc.com/gx/en/managing-tomorrows-people/future-of- work/global-mobility-map.jhtml 25 29 November 2013 RES Forum