Designing Effective Global Total Rewards Programs

Apple’s phones may be ‘Designed in California,’ manufactured in different countries, and used worldwide. But the same approach does not apply to your total rewards strategy. 

Different parts of the world have unique economic and cultural needs. Painting all of them with the same brush is likely to backfire, especially for something as sensitive as total rewards. Designing rewards and compensation plans for global locations requires a deep understanding of cultural and regional norms to ensure fairness, motivation, and compliance. 

Being well-prepared with research into different regions and practices can help craft the right rewards design that allows you to attract, motivate, and retain great talent. In addition, you can also ensure good returns on the investments you make towards employee rewards. 

Here are 5 ideas to consider while designing total rewards for a multi-country workforce:

1. Understand the country-specific environment: Familiarize yourself with labor laws and other regulations pertaining to compensation and benefits in the country. Find local experts who can help you navigate the complexities of regulatory guidelines.  In addition, understand the market benchmarks regarding pay scales, benefits, and perks for similar roles in the region. You may also need to pay attention to inflation rates and hyperinflation kind of scenarios that impact the real value of what people earn.
2. Build awareness of cultural nuances: Different cultures prioritize different aspects of total rewards. For example, dental insurance would almost certainly be part of the benefits people get in the US. But in a country like India where a root canal treatment with the best dentist in the city costs less than $100, it may not be a huge differentiator. However, in Asian and African cultures, visible signs of hierarchy such as car allowances or leasing options, larger office spaces, and titles indicating seniority may be more important than monetary compensation.
3. Consider the cost of living: While your pay philosophy should be about paying for the job and not for the location, you still need to factor in the local ‘going rate’ for various positions in the region. In addition, if economic conditions in a country are volatile, you might need to adjust your pay strategy accordingly, such as with more frequent salary reviews.
4. Analyze the competitive landscape:   Research what competitors are offering in terms of compensation and benefits and ensure that your rewards package is competitive compared to theirs. In addition, understand the talent availability for various jobs in the region. Jobs that have many applicants in the US might be ‘hot jobs’ in Africa or Asia, and need a different strategy.
5. Design adequate perks and benefits: Consider local customs and practices when offering benefits. For instance, healthcare might be a free government service in one country but a valued benefit in another. Other benefits like retirement plans, parental leave, or holiday policies might differ based on local norms and regulations.

Before addressing rewards design worldwide, ensure you capture the perspective of the most important stakeholders – your people. Listen to them about what they need and try to align your total rewards to their expectations. 

For more insight into how to design a global rewards program, contact us at [email protected].

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