How Should HR Deal with International Differences in Payments for Jobs?

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How Should HR Deal with International Differences in Payments for Jobs?
David Wilson, SIG Leader
Should people in one country be paid the same rate of pay as people in another country for doing the same work? What happens when the jobs are in two separate countries (i.e. Mexico and the USA, Japan and China, etc.)? I know global pay equity is probably an impossibility. However, would equating compensation between jobs reduce the need for organization to outsource their positions (i.e. IT positions in the USA going to India)? How would you equate compensation?

I have not seen a lot of reaction to this type of topic, but I hope the members will be willing to offer their feedback. The new President of the USA is wanting to build a wall between Mexico and the United States and he has threatened to tax (35%) the products of companies that build their products in Mexico. He is also in the process of renegotiating or tearing up the North American Free Trade Agreement (NAFTA) because he wants to make America great again. I do not know if he will succeed, but I do know his policies (if implemented) will create significant economic and people challenges for HR and businesses.

Let's stay away from political comments, but what can HR do to help their organizations manage the coming challenges and opportunities?

Global Pay Scales
Steven Cooke, Member
First, "Compensation" is always relative to perceived value. Businesses necessarily want to minimize expenses, workers want to optimize salaries. Optimization is a balance based on available skills and comparative opportunities.
I worked for global corporations for most of my career. Living conditions and costs are different around the world as well. A person needs a fair daily wage for the value given, for the region that they are in. Not everyone can live on $6USD a day, and very few may really be worth more than $5K/day, wherever they are.
Government interference is always a detriment to markets. It may be necessary in some cases, and in international treaties, but it should be minimal for optimum effect.



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