Reader Comments (3)

Rating (3):

WorldatWork Survey: Balancing Consistency with Localization Key to Compensating a Globally Dispersed Workforce

Oct. 1, 2008 — As companies focus more keenly on talent management and workforce issues, employee rewards play an increasingly important role in global, complex organizations. A new WorldatWork survey reports that consistency balanced with localization is key to compensating a globally dispersed workforce.

Results from the 2008 WorldatWork Global Compensation Practices survey reveal some emerging trends and areas of improvement for organizations operating across borders.

Key Findings:

1. There is an emerging trend toward greater centralization in compensation systems: the percentage of multinational companies reporting a more centralized approach to compensation increased from 49% in 2004, the first year this survey was conducted, to 53% in 2008.
2. Despite the trend toward centralization of compensation systems, just over half (54%) of respondents have HR Information Systems (HRIS) that cover most or all of their operations, making consistency a challenge when operating globally.
3. Nearly half (47%) of those with a decentralized global compensation structure give it a mixed review in terms of effectiveness, but 42% say it is either a “mostly” or “very” effective structure.
4. Regionally, a comparison of figures from 2004 to 2008 reflects growing integration of European Union member states aligning compensation across borders: 23 percent of respondents reported that Western Europe presents challenges this year, down from 33 percent in 2004 for Western Europe.
5. Asia continues to present challenges in developing a global compensation system; 70% of respondents indicated it is a major challenge this year compared to only 55% in 2004.
6. Among equity programs, stock options are the equity tool most commonly implemented globally, with 72% overall responding in the affirmative. Other prevalent equity tools are restricted stock units (69%), employee stock purchase plans (48%) and performance share plans (47%).

“When it comes to compensating a globally dispersed workforce, multinational corporations would be wise to balance consistency with localization,” said Adam Sorensen, GRP, global total rewards practice leader for WorldatWork. “In addition, communicating the value proposition to employees will be a great competitive advantage given that, according to our survey, a surprisingly low number (13%) of employers issue rewards statements to employees globally.”

About the Survey
The 2008 WorldatWork Global Compensation Practice survey was conducted in July 2008 to update a survey first conducted in 2004. A total of 461 responses were received during a two-week period. Sixty-nine percent of responding organizations (n = 312) have operations outside the US; a majority (77%) have operations in Western Europe. At least 85% of survey respondents were mid- to senior-level HR practitioners for large corporations.

Detailed survey results will be presented at the WorldatWork Total Rewards Europe 2008 Conference to be held Oct. 28-30, 2008, at the Sheraton Brussels Hotel, Brussels, Belgium. For more information, visit www.totalrewardseurope.org.

Media interested in attending the conference or seeing a copy of the full survey report may contact marcia.rhodes@worldatwork.org.

Contents © 2008 WorldatWork. No part of this article may be reproduced, excerpted or redistributed in any form without express written permission from WorldatWork.