An increase in global hiring is one of the most significant second-order effects of the COVID-19 pandemic. Whereas once upon a time a business may have only sought out candidates in the city or country where it’s headquartered, the proliferation of remote work has made it possible for talent teams to dip into labor markets in all corners of the globe.
Global hiring can help businesses overcome staffing shortages in a cost-effective way, given the lower cost of foreign talent. For this reason, research from Deel found that international hiring was up 145% in the first half of 2022. Businesses that don’t hire globally now risk falling behind in the race for top talent, or needlessly overpaying for talent in expensive locations.
However, a frequent barrier to global hiring has been difficulty managing international employee compensation. After all, there are dramatic variations in cost of living, taxes, labor laws, employee benefits, and other regulations based on the country where the employee resides. Without accurate benchmarks, organizations defer to using cost of living data, unverified sources, or guesswork, resulting in costly mistakes that mitigate the benefits of hiring globally.
To tackle this problem, Pave recently launched Global Location Insights. In addition to finding verified, real-time compensation benchmarks for 45+ countries, Global Location Insights enables compensation leaders to create a tiered compensation structure, in which various locales are grouped into compensation tiers, and employees residing in a specific locale are paid according to that locale’s tier. This approach is recommended for companies with employees in multiple countries because:
We dug into Global Location Insights data to determine compensation tiers for various international markets. We hope the following data can help employers better grasp international compensation.
To create these international compensation tiers, we grouped together countries and cities where average compensation for all jobs is similar. Tier A denotes regions where compensation is higher; Tier B is less expensive, and Tier C is the least expensive (where appropriate). Note that all countries with a large tech talent presence are included. Here’s how our compensation tiers break down for various international labor markets:
To access the data behind each tier, request a demo of Pave’s Global Location Insights.
The above tiers offer a loose framework for how employers can think about compensation tiers when hiring internationally. Here are some additional tips when it comes to setting compensation for global hiring:
Using Global Location Insights, People leaders can confidently set compensation in line with market rates in 45+ countries to make offers that are both competitive and cost effective. To learn more about Global Location Insights, visit our website.