As countries travel the global economic crisis at different levels on the escalator to recovery, one of the biggest challenges for expats and their employers is rewarding talent with the right compensation.
Getting the balance wrong can mean a company losing top talent to rivals and falling behind in the race to recruit new talent.
The job for HR professionals is to set compensation packages for expat workers at a level which rewards, motivates and keeps the right people in top jobs.
“Salary and benefits packages are the largest expense for most multinational companies who need top talent to help them take advantage of a knowledge-driven economy,” said Samantha Polovina of HR professionals Mercer.
“Being cautious and paying too little could trigger a company’s best performers to leave, while keeping the right people needs a blend of budgeting and planning to stay a step ahead of the competition.”
The company has just issued a report analysing compensation at companies across 34 countries.
These are some of the findings from selected countries:
Projected high and low salaries by region – 2015
- Africa – Highs – Ethiopia, Malawi and Ghana up 15%; Low – Gabon up 3%
- Americas – High – Venezuela up 46%; Low – Canada and the USA up 3%
- Asia Pacific – High – Myanmar up 12.5%; Low – Japan up 2%
- Central and Eastern Europe – High – Belarus up 10%; Low – Bosnia up 3%
- Middle East – High – Yemen – 6%; Low – Israel up 3.4%
- Western Europe – High – UK, Germany, Austria and Norway up 3%; Low – Cyprus between 0% and -0.2%
Short term incentives
Some companies are rewarding employees with a bonus for reaching pre-determined performance milestones:
Highest bonus payments for senior executives:
- USA – 40%
- Canada – 35%
- Mexico – 35%
- Malta – 30%
Lowest bonus payments for senior executives:
- Honduras – 13%
- Botswana – 12%
- Cameroon – 10%
- Cyprus – 10%
Mercer also explained that economic trends, such as inflation and unemployment, in different countries can influence the compensation decisions of both companies and employees.
For example, in Africa, Ghana has inflation of 10.8% and Zimbabwe’s is just 1.2%, so althou8gh Ghana may offer more attractive compensation packages, expat workers need to take into account whether the cost of living will leave them with as much money at the end of the month .
Not only does the inflation rate need considering, but also the factors that the cost of living index is compiled from.
The Economist Intelligence Unit compiles cost of living figures for more than 200 cities but excludes rents and private schooling expenses that can make a major difference to pay packets.
