Category Archives: Compensation

Postings and discussions about compensation topics

Creating Salary Scales in Developing Countries

Posted on August 17, 2011 by | 4 comments

Author:
Warren Heaps – Birches Group LLC

Many companies use salary scales together with salary grades to manage their compensation programs globally. There are many advantages to doing so, including cost management, positive employee relations and transparency which enables managers to be directly accountable for pay decisions.

In developing markets, creating salary scales is more challenging than in countries with more stable economic conditions. Developing country markets are volatile and often fluctuate from year to year based on a combination of factors. Cost of labor (supply and demand), tax and labor law changes, general economic conditions (such as inflation), business growth and expansion,  as well as unplanned events such as natural disasters, civil unrest and the like are all in the mix.

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4 Comments

Posted in Compensation, Developing Markets, Global HR Expertise

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Square Peg in a Round Hole: Balancing the Global Salary Budget

Posted on July 26, 2011 by | 2 comments

Author:
Warren Heaps – Birches Group LLC

Managing salary budgets on a global basis is a real challenge.  In some companies, the process is often dictated by the corporate finance department, which establishes the amount of growth in the budget “salary line” which is acceptable for the following budget year, say 3%.  That’s 3% in the currency used for budgeting, usually the headquarters country currency.

So how do compensation professionals make the global salary budget “come in at 3%?”  It’s kind of like fitting a square peg in a round hole.

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2 Comments

Posted in Compensation, Developing Markets, Global HR Expertise, International Expertise

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Special Announcement from Birches Group and Emergence Growth

Posted on June 17, 2011 by | 7 comments

Author:
Warren Heaps – Birches Group LLC

This post is a bit of a departure from our normal content, which usually focuses on the “how-to” of international human resources management.  Today we are making an exception to bring you some exciting news.

This week, my company, Birches Group LLC entered into an agreement with Emergence Growth, led by another one of our authors here, Yendor Felgate, to work together to expand our customer base in Africa.  Emergence will become the exclusive agent for our compensation and benefits surveys in Africa, focused on private sector companies that operate across multiple countries.

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7 Comments

Posted in Africa, Compensation, Developing Markets, General, Global HR Expertise, Professional Development

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Global Mobility Policies for the 21st Century

Posted on May 26, 2011 by | 8 comments

Author:
Warren Heaps – Birches Group LLC

It’s now almost the middle of 2011, so the 21st century is well underway.  The new realities of global business are upon us:

  • Companies are expanding from developed countries into new, high-growth markets in the developing world in record numbers.
  • Global talent is being snatched up across borders on a regular basis.
  • Companies are sending expats to new locations, and breaking new ground with each assignment.
  • Companies headquartered in developing markets like India, China, Brazil and South Africa, to name a few, are expanding along with multi-nationals from more established markets.
  • Demographic shifts will result in an increasing number of workers being sought from developing countries to replace the ageing workforce in North America and Europe.  In fact, McKinsey predicts that by the year 2040, the largest working-age population in the world will reside in Africa.

So what does this have to do with global mobility?  A lot!

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8 Comments

Posted in Compensation, Expatriate Recruitment, Expatriate Selection, Expatriates, General, Global HR Expertise, Global Mobility Services, International Assignee Recruitment, International Assignee Selection, International Expertise, Repatriation, Talent Management

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Importance of Medical Insurance in Multinational Pooling

Posted on May 9, 2011 by | 1 comment

Author:
Jacque Vilet – Vilet International

Many companies with employees located in many countries globally provide supplemental benefits in addition to those that are government mandated.   Many of these supplemental plans are insured:   life, accidental death and dismemberment (AD&D), disability, retirement, etc.   Typically, the office in each country location manages their own process of selecting insurance companies, types of coverage, comparing premiums and settling on the final contract language.   Sometimes the number of employees is very small and, therefore, the premium is high because the risk is spread over a small number of people.

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Posted in Benefits, Compensation, Global HR Expertise, International Benefits, International Expertise

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Benchmarking Regional Roles – What Works?

Posted on April 13, 2011 by | 7 comments

Author:
Warren Heaps – Birches Group LLC

More and more companies are consolidating operations into regional centers, using a base in one country to manage businesses in multiple markets. This makes good sense for several reasons:

  • Efficiency – regional offices eliminate duplicate resources and allow organizations to focus on customer-facing positions in smaller markets.
  • Expansion – a regional approach allows for gradual expansion into new markets, permitting “testing of the waters” before entering a market.
  • Local knowledge and expertise – staff in a regional center are usually familiar with more than one of the markets in the region, so can often help bridge market, language and cultural differences.

So regional offices sound like a great model for many companies. But how does a regional role impact compensation? This is a subject of considerable debate amongst compensation professionals. Continue reading →

7 Comments

Posted in Compensation, Developing Markets, Global HR Expertise

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Taking Corporate Programs Global – Your Mileage May Vary!

Posted on April 4, 2011 by | 10 comments

Author:
Jacque Vilet – Vilet International

Companies these days are always striving for global consistency, and one of the ways to achieve it is to use the same corporate programs around the world.  But such an approach can sometimes present unexpected challenges.  I would like to share some of my experiences in this regard, to get you thinking about all the possible ramifications in rolling out corporate programs in multiple countries, and how each of those countries may be impacted.

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10 Comments

Posted in Compensation, Global HR Expertise, International Expertise

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Global Salary Grades or Global Salary Structure?

Posted on March 14, 2011 by | 7 comments

Author:
Warren Heaps – Birches Group LLC

Recently a reader posed a question to me:

“My company has expanded into ten new countries and I’m trying to establish a global salary structure.  With all the different exchange rates, I’m finding it difficult to come up with one structure that works everywhere.  Can you give me some advice?”

I provided a short answer to the reader, which I will share here, along with some additional information.  First, though, some clarifying definitions, because I believe there is some confusion with terminology (which provided the name of this post).

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7 Comments

Posted in Compensation, General, Global HR Expertise, International Expertise

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What About Inflation?

Posted on February 28, 2011 by | 13 comments


Author:
Warren Heaps – Birches Group LLC

In one of my recent posts, I explained why employers should be careful how they use devaluation as a factor in setting changes to salaries.  One reader sent me a long note describing her dilemma in managing the merit budget approval process for international locations in her company, specifically, how should she take inflation into account?  I realized that my conversation with this reader would probably be of broader interest, so I decided to write this follow-up post.

The fundamental question is:
How should inflation be considered when determining salary increase budgets?

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13 Comments

Posted in Compensation, Global HR Expertise

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Impact of Devaluation on Local Pay

Posted on January 21, 2011 by | 9 comments


Author:
Warren Heaps – Birches Group LLC

Recently, a client posed the following question to me:

“The Ethiopian Birr has devalued recently and management wants to offer an across-the-board increase to our staff there.  Can you offer any guidance?”

The first thing I asked my client was if she was referring to expats or local staff. She confirmed local staff, not expats.  So, I told her if that’s the case, you might want to reconsider such a step.  Why?

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9 Comments

Posted in Compensation, Developing Markets, Global HR Expertise, International Expertise

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