Going global is still not the way of the majority with just 45% of companies adopting an exclusively global approach to pay.
This is according to Mercer consulting which found that 39% take a local approach and 16% a regional approach to compensation design.
Seniority is a factor. Eighty-four per cent of respondents have established a global compensation strategy for their executive-level employees yet many fail to cascade this effort further down the line.
Slightly more than half of the organisations (53%) have specific global compensation strategies in place for their managers while just less than a third (30%) have global strategies for professionals and slightly more than a quarter (26%) for sales employees.
“It’s clear that the biggest difference between US and European organisations with regard to global pay programmes is at the management level,” said Philip van Elsdingen, principal with Mercer’s human capital consulting business in Amsterdam and European leader of the study. “European companies are less likely than US companies to develop global strategies below the executive level because of a greater sensitivity to the potential barriers associated with implementing a common approach.”
Of those that have implemented global pay solutions, Mercer’s survey shows just 36% have centralised the administration of them with many failing to follow best practice when designing their strategies.
Mercer quizzed respondents from 168 multinational companies based primarily in the United States and Europe.