Why global compensation isn’t like a herd of wildebeest...
02 June 2016
Like many people I enjoy watching natural history documentaries and am often amazed by the complexity to be found in nature. Some natural events, like the Serengeti wildebeest migration almost defy belief. Perhaps strangely, while watching a programme about this migration, I started to think about global compensation management. Awe at the beauty of nature was displaced by thoughts of data sources, compensation items, taxability treatment and payroll delivery.
I considered the characteristics that needed to be in place for the migration to be successful. The starting point seemed to be the shared knowledge and experience of the herd. The ability to act collectively, to understand instinctively what to do. I realised that this also applies to global compensation management. There is no denying that assignee compensation can be complex. It typically includes multiple data sources, varying methods of delivery including split pay, and the application of specific expatriate rules and positions. This requires a high level of understanding and expertise not only at the centre but locally with the payroll delivery. When you have such a complex, ever changing but constantly moving process then instinctive judgement becomes important. Knowing what to do and making it happen quickly is critical when payroll cut offs and deadlines are involved. It made me realise that in many cases this instinctive intelligence is lacking within organisations. Global compensation and expatriate payroll has been too niche within organisation to facilitate the development of deep expertise and grasp from the local payrolls back into the centre. The herd mentality just isn’t there yet and this is why companies may look outside of the organisation for that know-how and competence.
The next comparison I made related to communication. Even the shared insight and experience within the herd did not negate the need for interaction. The constant noise, the constant braying seemed to be evidence intense communication. Making sure that individual animals remained in touch with the herd, keeping on track, keeping moving. By comparison, my experience with global compensation again suffered and made me think that typically those involved in the process just don’t talk enough. Global compensation typically requires the effective management of multiple data sources and a myriad of data points. Gathering all of the necessary data together and then facilitating its dissemination to the right people at the right time is difficult. Coordinating this needs constant communication and ongoing dialogue. This is especially the case as in many cases, too many processes rely on manual steps and human intervention, all of which carry risk. The solution has to be more communication but crucially more automation. Reduce the need for human intervention, reduce the risk.
Another point linked to this is that local payrolls aren't set up to process assignees and aren't always open to developing this skill. This is intensified where mobility teams lack sufficient understanding of payroll and are reluctant to talk about it. We need to be talking more about global compensation and payroll.
My final comparison relates to timing. For the wildebeest, the timing of the migration is crucial. Start at the wrong time of year and they will fail, start early and they will fail, start late and they will fail. Timing is everything. This concept is relevant to global compensation and payroll. Mobility teams often struggle to have the time or resources to manage this area well. Combining the ad hoc and dynamic demands of global mobility with fixed monthly processes and deadlines often isn’t feasible. There are no shades of grey if a payroll cut-off is missed and this means that many organisations are looking for support to manage this process. It is much better to invest in the right backing up front rather than spend time unravelling mistakes and resolving issues.
While my comparison between a herd of wildebeest and global compensation sounds unusual, it did make me consider the challenges of global compensation and payroll from a different perspective. This approach is something we bring to our clients and I’d like to think that we are always open minded and thoughtful when considering the right solutions for them. In this area and so many others in the changing world of global mobility, one size does not fit all and individual requirements trump those of the herd.