Creating a Global Compensation Strategy for Your Global Team

Hiring globally? Explore how to create a global compensation strategy for your international team, ensuring fairness and alignment across locations.

Blog Author - Janelle Watson
Janelle Watson
May 30, 20243 minutes
Blog Author - Janelle Watson
Janelle Watson

Janelle Watson provides content marketing for the international team at Justworks. With a background in higher education and journalism, Janelle helps tell stories that make international expansion and EOR accessible.

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In today's interconnected world, companies are no longer confined by geographical boundaries. One of the most critical aspects of managing a global team is developing a comprehensive global compensation strategy. 

Such a strategy not only ensures fair and competitive pay across different regions but also promotes equality and compliance with local regulations. In this guide, we’ll dive into the essentials of a global compensation strategy, explore its key elements, provide a step-by-step guide to creating the right strategy for your needs, and explain how a global EOR like Justworks can assist in the process.


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What is a Global Compensation Strategy?

A global compensation strategy is a structured plan designed to manage how a company compensates its employees in different countries. This strategy encompasses various components such as base salary, benefits, bonuses, and other perks. By creating a unified approach to compensation, companies ensure that all employees, regardless of their location, are rewarded fairly and equitably. 

Excellent global compensation strategies help: 

  • Promote equality and fairness among employees 

  • Legal compliance 

  • Attract top talent in the areas you hope to hire in

  • Promote a unified company culture 

Key Elements of a Global Compensation Strategy

Before we create the right compensation strategy for your business, it’s important to understand key elements of global compensation. 

Base Salary

When determining base pay in a global compensation strategy, factors such as cost of living, market rates, and role specifics play a crucial role. These elements ensure that salaries are competitive and fair, reflecting both local economic conditions and the demands of each position.


A comprehensive global compensation strategy should include mandatory benefits like health insurance, retirement plans, and other region-specific perks. These benefits ensure that employees receive essential support tailored to their local needs and regulations.


Although not required in every area, many countries in Latin America and Asia require additional bonuses like 13th-month and 14th-month pay. Mexico requires employers to profit-share a portion of their earnings with employees – understanding what’s required of you as an employer in each area you’re hiring in avoids any complications down the road. 

Allowances and Perks

Including allowances and perks in a global compensation strategy is essential to address the diverse needs of a global workforce. These can include housing, transportation, and education allowances, and other location-specific expenses. By offering such tailored perks, companies can enhance employee retention, ensuring a more engaged and motivated team.

Failure to comply with local labor laws can lead to legal issues and fines. By prioritizing legal compliance, employers demonstrate their commitment to ethical practices, fostering trust among employees and stakeholders.

How to Create the Right Compensation Strategy for Your Business

Developing a global compensation strategy requires a structured approach that considers various factors, from understanding country-specific expectations to implementing and monitoring the strategy's effectiveness. 

Here's a comprehensive guide to help you navigate the process before creating your plan. 

1. Assess Your Needs:

  • Define your businesses objectives and strategic goals related to compensation.

  • Identify the specific needs and expectations of your global workforce, considering factors like geographic diversity, talent retention, and market competitiveness.

2. Conduct Market Research:

  • Benchmark your compensation practices against industry standards and competitors.

  • Analyze market trends, salary surveys, and compensation data to ensure your strategy remains competitive and aligned with market realities.

3. Involve Key Stakeholders:

  • Collaborate with key stakeholders such as HR, finance, and regional managers to gather insights and perspectives.

  • Ensure cross-functional input to develop a comprehensive understanding of compensation requirements and challenges.

4. Develop a Comprehensive Plan:

  • Create a balanced approach that combines global consistency with local flexibility.

  • Define clear guidelines and policies for salary structures, benefits packages, incentives, and equity compensation across different regions.

5. Implement and Communicate:

  • Roll out the compensation strategy effectively, ensuring transparent communication with employees.

  • Provide clear explanations of compensation elements, policies, and eligibility criteria to enhance employee understanding.

6. Monitor and Adjust:

  • Regularly review the strategy's effectiveness through performance metrics, employee feedback, and market dynamics.

  • Make data-driven adjustments as necessary to optimize the strategy and address evolving needs and challenges.

How an EOR can help

Instead of going through the heavy-lifting and legal management yourself, consider partnering with a global Employer of Record like Justworks. By leveraging the services of a reputable EOR, small businesses gain access to expert knowledge of international labor laws, tax regulations, and compliance requirements across borders. 

EORs facilitate seamless payroll management, benefits administration, and statutory compliance, ensuring that employees receive fair and compliant compensation packages regardless of their location. Moreover, EORs can provide valuable insights and support in developing competitive compensation structures, navigating local market practices, and addressing complex HR challenges, enhancing the effectiveness of your global compensation strategy.

Justworks can help navigate compliance risks

Discover how partnering with Justworks EOR can streamline your international expansion and mitigate compliance risks associated with creating a global compensation strategy. We handle the tough stuff like payroll, compliance with local labor laws, and tax regulations, allowing you to focus on growing your business globally with confidence.

Want to learn more? Get started today!

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.
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Written By
Blog Author - Janelle Watson
Janelle Watson
May 30, 20243 minutes

Janelle Watson provides content marketing for the international team at Justworks. With a background in higher education and journalism, Janelle helps tell stories that make international expansion and EOR accessible.

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