International and Global: What's the difference?

March 26, 2012

What is the difference between an international company and a global one? 

It may be academic if you operate and are resident in one country. However, the moment you start asking the team to work abroad you'll run into the differences very quickly.

The one thing that all "expatriates" have in common are their terms and conditions and you can be sure that these will be discussed over coffee, dinner or at the bar; "What I got and what you got!"

Turnover, internal administration, management time, policy precedents will all cause increases to your costs if you do not have clearly defined arrangements for transferring to your international locations

what are likely to be your best and biggest contributors. Just spend a moment considering the challenges that can arise; currency, tax, immigration, schooling, rosters, housing, spousal employment and even transporting the dog! 

The default approach is to try to keep your employee "whole" with the lifestyle and the net pay that they had at home. There are several organizations that will help you do this and provide the (very expensive and sophisticated) data and spending differentials that you will need.

Alternatively you may be recruiting from locations where smaller incentives are required. Much simpler but not a long term strategy if you intend to mix employees from different countries.

A global company will not care where you came from but will have terms attractive to globally mobile employees who are capable of living and working anywhere. That is how they differ from international companies who think in terms of a two or three country mix. 

Trying to protect your employee against every small differences is often no longer appropriate or even necessary and sends quite the wrong signal to the experienced international employee. Arbitraging compensation costs has its place; transferring people from lower cost countries but only in certain sets of circumstances. An engaged workforce is treated fairly and consistently and does not have members that are treated differently or who have been singled out.

Sounds expensive but it doesn't need to be - there are ways to manage costs and retain your most important assets. 

In the final analysis you just may not be able to compete with a large company with a bigger treasury that covets some of your mobile people. However, some simple techniques may get them to think twice about leaving such an organized employer:

  • Benefit plans that cover all expatriate employees irrespective of nationality or country of origin
  • Equalizing pay scales for employees at the same location performing similar work
  • Discreet terms of employment, distinct from local and home based non-mobile employees,
  • A separate employment services company that employs all mobile talent
  • Universal and consistent terms and conditions foe each category 
  • Family friendly features and policies

It used to be that one international terms and conditions model would work for all employers. Your approach to mobility needs to suit your unique brand, geography and talent management plan.

Attitudes and expectations are changing and an employer that meets the real needs of its mobile employees and their families, and values the contribution that mobile skills can provide will succeed. The war for talent is fought more fiercely when mobile assets are the prize.

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