As the global job market tightens, competitive compensation has become the number one priority for employees, with 64% ranking it as the top reason to accept a job offer.
However, when expanding across borders, compensation management is not just about numbers — it’s about understanding diverse markets, regulations, and cultures.
For companies looking to hire globally, getting compensation wrong can lead to talent loss, compliance issues, and damage to the employer brand. This is where Employer of Record (EOR) emerges as a game-changer.
In this article, we look at how an EOR can help you craft a compensation strategy that is not only compliant but also compelling, helping you attract and retain top-tier global talent. We’ll also include insights from our recent webinar: “Paying global teams: Strategic compensation and compliant payroll.”
What is compensation management?
At its simplest, compensation management encompasses salaries, benefits, and incentives. It ensures that employees are rewarded fairly for their hard work, which can significantly impact whether they stay with you long-term.
Pay is a crucial factor that impacts how 85% of employees feel about their current job and future opportunities. As a global employer, you must take into consideration varying compensation expectations and salary trends across regions to ensure that everyone feels equally valued.
To thrive on the global stage, compensation management requires up-to-date, region-specific insights. In this next section, we explore how EORs provide crucial data and support to help optimize your compensation strategy.
How an EOR transforms compensation management
An Employer of Record is an organization that takes on the legal responsibility for hiring your international team members. This means you don’t have to worry about setting up an entity or staying up to date with complicated and changing employee laws. Instead, the EOR ensures your pay structures comply with local minimum wage laws, taxation, and mandatory benefits requirements.
Here we take a closer look at how this solution can support you.
Moving beyond local minimum wage laws
Let’s say you have one accountant based in Manila and another based in London. How can you ensure that their compensation is fair, equitable, and compliant?
It all starts with the right Employer of Record solution. When you know that you’re automatically meeting minimum wage laws, tax regulations, and mandatory benefits requirements, you can focus on designing compensation packages that reflect the value and responsibilities of each role.
As Director of Global Payroll, Meneka Rayan explores in our recent webinar, “once you know that you’re compliant, you can focus on being flexible.” Instead of worrying about the minute details of meeting labor laws, you can design payscales and salary bands, taking into account local living costs and existing data.
The importance of an integrated global payroll solution
Having access to meaningful data is essential for effective compensation-related decision-making. Yet, 44% of global payroll leaders report that their dashboards lack global insights, and 28% express a desire for improved reporting capabilities.
This is where an EOR with a robust global payroll platform truly shines, allowing you to view crucial reports all in one place. In a single place, you can view currency conversions, pay, and benefits. This gives you a clear picture of total compensation across regions; from here payroll teams can act more strategically, supporting other teams to optimize compensation management.
As Global Payroll & People Leader, Ian Giles outlines in our webinar, centralization is key in a global setting; whether you’re using an EOR to manage all or part of your distributed team, it helps to bring data from across regions together. “The more geographically dispersed a team gets, the more the data is siloed and not integrated with other systems. That makes it hard to report, work cross-functionally, and translate data into actionable insights that add value.”
The power of localized benefits
Compensation isn’t just about cash. A recent survey found that 66% of employers recognize that their employees appreciate benefits “very much.”
Partnering with an EOR empowers you to seamlessly provide your employees with the benefits they value most as well as those that are legally required.
As Michael Nierstedt, Payroll Product Director, identifies in our webinar, it’s important to ensure that you pick an EOR (like Multiplier) who can provide comparable benefits as those you provide to employees you hire directly. “If there are discrepancies in what each employee receives, this can create cultural issues,” he describes.
Simplifying compensation management with an EOR
The complexities of global hiring can often feel like a maze, but an Employer of Record simplifies the process by offering support at every step.
Whether it is staying compliant with local regulations, helping you take control of your global payroll processes, or providing benefits that attract employees across the world, an EOR acts as your strategic partner in managing a global workforce.
Multiplier provides leading, localized benefits, a compliant-by-design EOR solution, and a centralized global payroll product that helps any team manage a distributed workforce. We also offer 24/5 customer support to all our clients.
Speak with one of our experts to learn more.
