26 Apr Global Mobility Managers Find Compensation Packages Differ Between Young and Old Pros
In an increasingly competitive business landscape, oftentimes opportunity and compensation packages are the deciding factors that make one assignee accept a job offer and turn down others. Yet perks and pay are not the only ones that sweetened that deal and persuaded them to sign onboard.
Opportunities in Silicon Valley can appear in the form of subsidized travel, the freedom to choose their own accommodations, and a more flexible work lifestyle that can allow an assignee to fly home to their homeland every weekend for quality time with their families.
Because of these many options, offers cannot be cut in stone. A more seasoned assignee who has a growing family may look at the salary and what they can take home after taxes. A rising twentysomething star player may eschew the posh villages to bunk in with the locals, as long as they have an almost endless supply of gas money.
Not surprisingly, global mobility managers always in search of international quality talent now confront the reality that pencil-pushing and doing the numbers are not enough.
The question they ask themselves these days is: with so many options available to assignees who apparently want to determine their own career path and its resultant perks, how do we benchmark rewards in order to recruit these talents and not lose them to the competition?
First, as alluded to by Chartered Institute of Personnel and Development or CIPD, finding the right compensation package is a balancing act between what the home country of the assignee gives, the regional baseline, and the international pay scale.
The assignee will naturally want a package higher than what he is used to at home. At the same time, the global mobility manager has to weigh his asking price with the regional and global rates.
At a certain point, after other variables like relocation cost and kids’ tuitions have been factored in, the global mobility manager would have to determine the attributes and qualifications that qualify the assignee for an international pay, as opposed to a regional rate. They would have to manage the expectation of the assignee while ensuring that the resultant package remains within the company’s budget.
Second, the living environment of the country of employment must be taken into consideration. Whether the assignee prefers a high-class furnished apartment in a classy but comfortable neighborhood in Northern California, or whether they want to jaunt from Paris to London every week from a corporate flat is not the only thing that has to be taken into account.
ECA International also advises the global mobility manager to study diligently the new country’s tax rules, the actual cost of living incurred given the assignee’s take-home pay, and the amount needed to ensure that the assignee still manages to enjoy a comfortable, if not a necessarily luxurious, lifestyle.
Finally, the global mobility manager might have to take a look at the long-term development of the host country. Inflation, government policies, population growth, demographics, and increasing market share can increase or reduce the value of the compensation package of the assignee in the long run.
While these may be difficult to predict, the global mobility manager should assess the following: the strength or weakness of the local currency versus the U.S. dollar; the current cost of living; the growth or reduction of the country’s gross domestic product; the government’s dealings with the assignee’s home country and their people, etc.
Ultimately, the global mobility manager will have an idea of the long-term viability of the assignee’s assignment and the number of years they stand to enjoy in that country given his current package.
They can then estimate a proposed package that can give the assignee a realistic optimal level of fulfillment; this is also an indicator to the global mobility manager of the number of years they can expect the assignee to stay put in the host country happily, or start asking for a transfer with a more engaging package.