Global Compensation Management: 5 Tips for Success

Global Compensation Management

Compensation management can be extremely difficult for global companies. With so many employees, positions and time zones to consider, companies can get overwhelmed and fail to notice the flaws in their compensation management strategies. Thankfully, we have five tips that can help.

Compensation management ensures that a company’s salaries remain competitive, appropriate and equitable. It also confirms company benefit programs meet employee needs. At first, this sounds simple — but what about when a company expands across the globe? 

The larger a company gets, the more difficult it is to manage compensation. That’s why we put together these tips to help you handle the compensation challenges of managing an enterprise organization. 

#1. Localize Compensation Policies  

Global compensation policy implementation isn’t a one-size-fits-all process. When a company has multiple locations across the world, thousands of employees will have different local norms and needs. That means policies created for a company’s headquarters in the U.S. might not be applicable to the segment of the company located in Canada, Europe, or somewhere else.

For example, there are types of localized pay that are common in some countries but not others, such as allowances and 13th-month pay (either customary or required by law).

Therefore, every global company needs to design customized compensation policies that cater to specific locations. Elements like employee retention, performance achievement and profitability will look different in every region, so standardization isn’t possible.

For example, let’s say you have offices in London and New York. Since the cost of living in New York is higher, employees at your New York office may be paid more than employees in London. Or, maybe the job positions at your Canada office are different than the roles at your U.S. office, so comparing the compensation plans for those titles is difficult. When it comes to regional company specifics, there will always be more differences than similarities, and that’s why it’s essential to localize compensation policies.

#2. Be Mindful of Regional Laws 

Every country has different laws regarding minimum wage, local tax, social security withholdings, insurance, immigration, intercompany charging, and so much more. Each one of these laws needs to be reviewed in order to achieve appropriate compensation for all workers at a global company. Additionally, if a company is not compliant with payroll regulations within a certain region, there will be penalties and fines. 

This part of global compensation management is typically the most difficult due to complicated laws and the challenge of communicating with government officials in other regions and countries. But as a global company, you have to be informed about these laws, and research should be completed accordingly. The more you know, the more you will be prepared, and the better your company can comply with each law. Ultimately, this is a task for your HR department and should be overseen by those in management positions. 

#3. Define Universal Living Standards

If your company is headquartered in the U.S., your American employees are probably used to the average compensation and living standards established in this country — but what about other countries? The cost of living and general expenses is going to differ everywhere, so there is a high chance that an average salary for a certain role in Pennsylvania may not be enough to support someone in that same role who lives in London.

Every employee at your company should receive fair compensation that allows them to live comfortably and afford a high quality of life. When implementing universal living standards, your headquarters is a good place to start — how do the employees at this location live? After defining this lifestyle, consider the cost of living in other regions and countries. The goal is to ensure the same living standards for everyone, and the allocated compensation for each role at every location should provide employees with very similar advantages.  

#4. Create Benchmarks for Different Locations

Compensation benchmarking is a real challenge and can only be tackled through accurate data. First, you should determine key responsibilities for every role within your company and assign each one a value. After each role is established, you can research similar positions within a location to create some general benchmarks. 

Be sure to create benchmarks for:

Having established compensation benchmarks can support your company in recruiting the best candidates, retaining top-tier talent, avoiding wage fixing and much more. 

#5. Improve Reporting and Analytics 

Both quantitative and qualitative data are needed to continuously improve your company’s global compensation programs. Pay grades and components will need to be revised annually, so it’s important that you always have access to global compensation data. This data will help you ensure that all employees are being compensated fairly and that your allocated budgets are the right size. Managing thousands of salaries across the globe isn’t easy, but when you are faced with factual data, you can’t deny the changes that need to be made. 


Global compensation doesn’t have to be a burden. If you use these tips and implement the right compensation management software at your company, the process will be smooth and straightforward. 

Wondering how to handle global compensation management at your company? HRSoft’s award-winning COMPview Software makes fair compensation easy to implement across any organization. Contact us to learn more.