Global remuneration considers international issues in employee compensation. This includes pay for foreign employees and people working at overseas locations. Handling compensation policies, including wages and benefits, can be made much more complicated when people have to consider international law, differences in cost of living, and variances in working environments. Companies with global operations may hire a consultant to handle this aspect of human resources to ensure they remain competitive with other firms in the industry.
One issue in global remuneration is how much to pay employees. Those working in overseas operations may be living in sites with a higher cost of living and less purchasing power parity. As a result, they may need to earn more than domestic employees. The economic climate could also be worse, which means people may make less, but this could become a problem when people posted overseas compare wages and benefits with employees who remain in the home nation.
Companies with global remuneration policies also need to think about what kinds of benefits to offer, including housing, transportation assistance, and health care. Standards may vary in different nations, and the law could be a factor as well. For example, companies may be required to carry health insurance when operating in some regions, in which case it would need to be a standard benefit for all employees. Benefits can also be used to counterbalance standards of living issues.
In the process of evaluating global remuneration options, companies may think about the standards in a given region. If people in one nation expect a certain rate of base pay and benefits, the company will need to offer that if it wants to gain a foothold in the market. When standards of living are much lower, companies can balance their goals for remaining competitive, providing appropriate compensation, and reducing tensions between employees in different nations. Some companies get around this with policies that adjust for cost of living, making it explicit that wages and benefits may vary by region.
Consultants can help companies consider ethical, legal, and business issues when they discuss global remuneration. This may require periodic updates to adapt to changes in the law, such as mandates for increased pay or requirements to change available benefits. A skilled consultant can keep up with the latest industry activities as well as regulatory trends in order to offer appropriate advice to employers. Locally-based consultants can provide additional assistance as needed.