Workplace Policy

Understanding The People Risks In Brazil, Russia, India And China (Bric): The Risk Associat

Understanding the People Risks in Brazil, Russia, India and China (BRIC): The Risk Associat


Dr. Awie Foong, Tabitha Lim

A decade ago, when the BRIC acronym was coined, Brazil, Russia, India, and China were touted as the big four of the emerging markets, overtaking the G7 and shifting the economic power from the developed to the developing economies. Over the last decade, BRIC countries have indeed made their mark in the global economic landscape. BRICs share of the world gross domestic product (GDP) has increased by 7.1% between 2000 and 2009 and IMF estimates put their share of world GDP at 29.1% in 2015. Their economic growth is further evidenced by the foreign direct investment (FDI) net inflows into these countries.

What is it that drives economic growth and FDI? While there are many factors underpinning economic prosperity, the importance of human capital as a driver of economic growth is often overlooked. Empirical findings have shown that human capital is not just statistically significant, but rather is the most important determinant of FDI inflows to developing countries. An informative study by Professor Edward Glaeser and Filipe Campante of Harvard University highlights the strong linkage between educational investments and future economic growth.

Growth potential is often accompanied by high risk; and investors attracted to BRIC countries may well have recognized the financial and political risks. However, considering the critical impact of human capital on economic success, companies should not overlook the human capital risks that these countries pose to their business.

More specifically, the Aon Hewitt People Risk research points to three major human capital risks that are present at every stage of the employment cycle recruitment risk, employment risk, and redeployment risk.

In this three-part series, we will discuss these three types of human capital risk in relation to the BRIC countries. In the first part of the series, the risk related to recruitment will be analyzed.Recruitment Risk

The risk in recruiting people is primarily due to the lack of workforce and talent supply. As our People Risk research reveals, some locations have an oversupply of manual labor but a shortage of professional talents. Whereas some locations are faced with the inherent limitations of a small population, others are facing a shrinking workforce due to an ageing population.

Among the eighteen BRIC cities analyzed in our research, the Russian cities present the highest overall risk compared to major cities in other BRIC countries.The overall recruitment risk for the major cities in each of the BRIC countries. Demographic Issues


Workforce supply is important for companies in labor-intensive industries such as manufacturing, as they generally require a large proportion of labor to sustain their massive production numbers. Emerging markets, such as BRIC, have been a popular choice for businesses as their labor is generally cheaper than in the developed markets of their home countries.

In the broadest sense, the availability of workforce supply can be determined by looking at the demographics of the country. In terms of the population in the metropolitan areas, the BRIC countries generally do not have a high risk, which indicates a big enough pool of human resources supply available. However, mobility and migration factors can affect the size of the local pool of human resources. After the Soviet Union collapsed, Russia faced a brain drain, the outflow of talent, when Russian professionals, such as scientists, moved to the West to seek better career development and opportunities. This was also the case in India when many Indian professionals left in the 1960s to seek better opportunities in the more industrially advanced Western countries, such as the United Kingdom. In our People Risk study, we found that Russia currently has the highest brain drain risk compared to the other three countries.

The issue of an ageing population is also an important factor for companies to consider as it can, and will, impact the companys workforce planning and costs in the future. Russia poses the highest risk of an ageing population, with close to 18% of its population above the age of 60, as compared to Brazil (9.9%), India (7.4%) and China (11.9%).

The aforementioned factors of population size, brain drain and an ageing population all impact the available workforce supply. To further illustrate the risks of such a shortage, particularly in Russia, a joint study by the World Federation of People Management Associations (WFPMA) and The Boston Consulting Group has projected severe skill shortages in Russia across all industries for the next two decades. In comparison, skill shortages in India and China are limited to certain sectors such as manufacturing, construction and trade; and talent shortages are not yet a major concern in Brazil. Thus, companies should expect to face a big challenge in recruiting the right people in Russia, and to a lesser extent, China and India.Government Support

Evidently, government support plays a vital role in reducing human capital risk. Although it may be challenging to address the issues of an ageing population and a small population size, countries have embarked on initiatives to combat brain drain in a period when its economies are advancing and where talent is crucial in bringing more growth.

China and India have developed schemes to reverse the outflow of talent. China launched the thousand talent program in 2008, aimed at attracting overseas Chinese and foreign academics from the worlds best institutions. This year, China released an outline on talent development for the medium- and long-term to underscore the countrys drive to increase its talent pool, enabling the countrys transition from a labor-intensive to a talent-driven nation.

Similarly, the Non-Resident Indian (NRI) Institute aims to keep Indians well informed about the achievements and problems of NRIs as well as to promote NRI investment in India. Annual gatherings are also organized by the Ministry of Overseas Indians which tries to foster loyalty to the home country and encourage people of Indian origin to contribute to the economy. Although it may not be as orchestrated an effort as in China, these initiatives seek to connect India with its diaspora.

In comparison, Russia seems to have lagged behind in its reverse brain drain efforts. The Russian government has only recently announced that it is ready to implement policies to attract more qualified professionals from abroad.Education System

Having ample workforce supply, though, does not necessarily mean that a company can easily find a suitable candidate from the local talent pool. To a large extent, the quality of the workforce depends on the formal education system in a country.

The overall education risk is highest for India and lowest for Russia. This can be partially explained by the amount of investment in education made by the government. With more investments in the education system, one can expect to have better talent quality as the education will have the capacity to provide for sufficient skilled workers. Among the BRIC, Russia is doing relatively well in this aspect as it has the highest education spending per capita, an education system that has the highest capacity to supply skilled workers and therefore, the lowest overall education risk. Nevertheless, a general perception is that the quality of the Russian education system is declining; so this could become a major source of risk in the near future.

In China, the education system has, in the past, overemphasized the study of theoretical concepts, while neglecting practical skills training. This limited the number of qualified talents despite producing large numbers of university graduates. On the other hand, Indias education system is one of elitism, where a few world-class universities coexist with a large illiterate population. Indias adult literacy rate of 66% is one of the lowest in the world, and is substantially lower than in the other BRIC countries.

Brazils education system, too, faces the problem of providing an insufficient supply of skilled workers. A decentralized structure with many educational units that is mostly run by the states and municipalities is both expensive and inefficient. A study by the Economist Intelligence Unit pointed out the waste in Brazilian schools, such as the large number of students who repeat whole school years time after time before dropping out. Teachers are also poorly trained and teacher absenteeism can reach 30%, at its worst. In addition, Brazil channels much of its expenditure to its universities, rather than toward the lower rungs of the education system. Yet it is the people at these levels that generally make up a large part of the workforce. As such, the education expenditure by the federal government does not trickle down to the students who should most benefit from it.

The poor education system directly affects both the quantity and quality of talent in the country. Educational deficiencies present in Brazil threaten to hamper its growth — more than 22% of people available to join the workforce are not considered to be qualified. Finding people with basic skills for low-skilled jobs is proving to be a challenge in Brazil, let alone finding people for higher-skilled jobs. The suitability of available candidates in China and India also did not fare better. A study by the Mckinsey Global Institute showed that for an engineering position, only 10% of Chinese and Russian, 13% of Brazil, and 25% of Indian graduates with the correct degree are deemed qualified to be employed.

This lack of qualified and suitable candidates in BRIC countries indicates a mismatch between the talent pool available and companies’ recruitment needs. Companies cannot assume that a large talent pool in BRIC countries will render their recruitment efforts smooth sailing.

Facing a depletion of talent, it is no wonder that even a Nobel prize failed to bring a smile to Russian President Dmitry Medvedev. Instead, he responded to the recent win by two Russian scientists who left Russia and are now based out of the UK, by criticizing the lack of governmental efforts to improve the retention of Russian talent at home. This says a lot about a country that was once hailed as the pinnacle of scientific training. Companies should always keep in mind the people risks associated with hiring the right people in Russia and the other BRIC countries.Reference:

1. Brazils Poor Schools: Still a lot to learn. Jun 4th 2009. The Economist.

2. Creating People Advantage 2010. Boston Consulting Group and the World Federation of People Management Association.

3. Glaeser, E. & Campante, F. (2009). Yet Another Tale of Two Cities: Buenos Aires and Chicago. National Bureau of Economic Research, Working Paper 15104.

4. Noorbakhsh, F., Paloni, A. & Youssef, A. (2001). Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence. World Development, 29, 1593 1610.

5. The Emerging Global Labor Market: Part II The Supply of Offshore Talent in Services. McKinsey Global Institute.

6. World Development Indicators. World Bank. Last accessed on 30 Nov 2010.Contact

Alan Pang is Director of Aon Hewitts Global Research Center, which is based in Singapore. Please contact Alan Pang at For more information, visit our People Risk Portal at

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Workplace Policy

Key Features Of Hrms Software

HRMS software is one of the best tools which help business owners to administer their work force in the most efficient manner. However, the market is flooded with plenty of such software and hence it may be quite difficult to choose the best HRMS software.Following are some key features of any good HRMS software and keeping them in mind will help to select the best software possible. In this context, it is always better to ask for the HRMS software demo so that you get a fair idea of what facilities will be provided by the software.Maintaining Employee DatabaseThe essence of all HRMS software is the feature of maintaining the organization’s employee database. Whatever methods or tools used by the software, it has to maintain a record of all employee details in an organized manner. This information must be easy to access and possible to be updated later.Keeping a Track of Employee PerformanceMonitoring the work pattern of your employee is the biggest advantage provided by HRMS software India. It helps to keep track of employee punctuality and maintain their attendance record. The employee work pattern is related to their productivity which in turn determines the success of your organization. If you know the career graph of each employee you will know whether your organization is headed in the right direction or not. Through this software, you can compare the employee performance and stack rank them based on the information obtained. Information regarding employees who need additional motivation can be obtained and the necessary steps undertaken by the organization.RecruitmentsRecruitment is an ongoing process in every organization and this is best done through the HRMS software. The hiring process is hugely simplified by the use of this software as keeping track and maintaining records of new candidates in an organized manner becomes very easy.Payroll Management Managing payrolls is a task that has to be undertaken by every organization irrespective of the size. This software becomes highly useful in large corporations where large volumes of payroll data have to be processed. The HRMS software calculates the exact amount of salaries that have to be shelled out to the employees and ascertains the provident fund and tax deductions without the need for any manual calculations. The working of the software in this regard can be understood well when one views the HRMS software demo.Comprehensive Reporting & Scheduling The HRMS software India provides detailed reports with respect to any employee related information. It can create tailor made reports based on the needs of every organization besides having a library of the regular, standard reports on employee performance, attendance, turnover etc. The software has scheduling capabilities too which enables the organization to schedule employee meetings, shifts etc.

Workplace Policy

7 Costly Workers’ Comp Mistakes To Avoid!

Submitted by: Robert Elliott

Workers Compensation is not a fixed cost of doing business as many CEOs, CFOs and business owners think. It is actually a controllable expense. These seven mistakes employers make can drive workers compensation costs up as much as 20 percent to 50 percent. Learn how your company can avoid these seven very important mistakes.

Like all policies and program, the terms may need to be varied to comply with different state and federal laws. Make sure your corporate legal counsel reviews any policy or program before implementing it.


Hiring unqualified employees:

Many employers fail to make sure new hires are qualified to perform safely the job for which they are hired. This is called lack of job matching and can cost a lot of money in the long term.



Letting workers stay out of work longer than needed:

If an employee is healed on January 15, he or she should be back to work January 15 not February 15 or June 15. It is important to have programs in place to monitor the progress of employees when they are out of work.


Having too many employees out of work for too long a time:

Employees stay out of work when there are no post-injury procedures to bring them back to work quickly. They then risk becoming psychologically disemployed, thus making their return to work more difficult and remote. Workers who are out of work tend to want to stay out of work. Be prepared to investigate employees who stay out of work longer than the norm for their particular injury. Fraud is always a possibility.



Some employers won t spend a few hundred dollars to send managers responsible for workers compensation to conferences and seminars where they could learn how to reduce workers comp costs and possibly save millions. Or they look for the least expensive claims administrator rather than the one who will provide the best quality claims handling.


Lack of understanding:

Management doesn t understand the real cost of workers compensation. With a $15,000 claim, if the profit margin is 8%, it takes $187,500 to replace it on the bottom line. Management may not know they can direct medical care in those states where it is permissible. Lack of understanding by adjusters about medical terminology can be costly. Injured employees may think an insurance company is paying the claim completely, with no impact on the employer.


Failure to communicate with injured employees:

Attorneys, friends, and other injured employees communicate with injured employees. Employers must make sure they get your message first starting before an injury even occurs.


Failure to monitor or coordinate medical care:

No one is making sure a reasonable treatment plan is in place. For example, as long as any doctor says an employee cannot work, no one takes proactive steps to refute that position.

Don t make the same mistakes many employers make! Invest in your workers compensation program.

About the Author: Robert Elliott,senior vice president,Amaxx Risks Solutions, Inc. for 20 years,works with clients reducing Workers Compensation costs–airlines,healthcare,manufacturing, printing/publishing,pharmaceuticals,retail,hospitality & manufacturing. or 860-553-6604. For more information and tools, see

There are several free forms and tools on the site.


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