Global reward: why the one-size-approach does not fit all
The world is getting smaller. International work is no longer something exotic and unobtainable; far from it, international work experience is now often a prerequisite for senior level progression. Gone are the days where international work was reserved for executives moving from headquarters to foreign subsidiaries to address skills gaps on expensive long terms contracts. The transfer of knowledge around the world has become a common feature of modern work.
Today’s globally mobile workforce takes many forms: long term assignees, short term assignees, frequent flyers, rotational assignees, global commuters, ‘inpatriates’, ‘flexpatriates’ and self-initiated expatriates to name but a few. In fact, the International Labour Organization estimate that in 2017 there were 234 million migrant workers worldwide, i.e. a person of working age who is foreign-born and is either employed or unemployed in their current country of residence. Needless to say, compensating international workers, in whatever form that may take, remains one of the most complex yet crucial areas of international human resource management. This complexity is compounded by socio-cultural and economic issues that dominate media headlines. For example, Brexit continues to fuel uncertainty disrupting planning processes, Brunei’s decision to impose the death penalty for homosexuality may trigger a review of expatriate families working in the country.
Expat compensation then and now
Traditionally, expatriate compensation was developed based on the employee’s home country remuneration and ‘built up’ to reflect the host destination. This approach has led to expatriate compensation being regarded as the most expensive staffing model. More recently there has been a shift towards a host-country approach which recognises the value of a role in the context of the host country setting. The reality remains, however, that compensation differs between expatriates and nationals of the host country. This has been the source of inequality in many countries and a barrier towards expatriates integrating in the overseas destination.
Changing expat demographics
The demographic of globally mobile workers is also diversifying, more now than ever women are embarking on international work, although they are still underrepresented in the global arena. Many graduates pursue international work opportunities as their first move after leaving university, guided by the idea that they will accelerate their career faster in an international setting. Recognising the perception that international exposure facilitates career progression, there is a risk that long term career strategists may be perceived as being more inclined to consider compensation as secondary to development opportunities.
According to an article in the Journal of Global Mobility, Long-term assignment reward (dis) satisfaction outcomes: hearing women’s voices (2016), women who relocate as part of a ‘dual career couple’ (i.e. both partners secure overseas employment) often feel short-changed as their partners’ are statistically more likely to receive the ‘family’ benefits from company e.g. accommodation, school fees etc. This can occur if the couple work for the same employer equally if the couple work for different companies and their employers have coordinated benefit offerings.
Working across borders
The rapid advancement of the digital environment has led to diversification in the way that international work occurs. Videoconferencing is gradually replacing the need for international travel; particularly as it is now commonplace to hold virtual meetings with participants based in multiple continents. And multiple time zones. So how do we recognise, and compensate, for the demand of being available at all hours? Or is it just part of the job and a reasonable expectation to ‘work the hours to get the job done’? The growing focus on mental wellbeing and mindfulness would suggest otherwise. But are our global reward policies maintaining pace with the intensification of work?
The challenges facing reward practitioners operating across national borders remains. How can equitable reward solutions, which are applicable ‘anywhere to anywhere’, be designed and implemented which: 1) comply with local legislation, 2) encourage global mobility and 3) balance intrinsic and extrinsic motivation? Not forgetting, of course, the need to deliver agile staffing solutions to meet ever changing business demands, demonstrate return-on-investment and value for money. Context is critical; more now than ever one-size-does not fit all.
The author is Dr. Maranda Ridgway, senior lecturer in Human Resources management and global mobility specialist at Nottingham Business School.
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