Tag Archives: salary structures

Salary Scales – Why Can’t We Have Just One?

Author:
Warren Heaps – Birches Group LLC

Organizations operating in dozens of international locations have a lot of work to do to maintain separate salary scales in each country. Every once in a while a client suggests they are considering using just one scale for all their countries globally, or in a region. Then they ask me what I think. I tell them it’s a bad idea.

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Creating Salary Scales in Developing Countries

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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Global Mobility Policies for the 21st Century

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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Global Salary Grades or Global Salary Structure?

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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