*New and out now! The Spring issue of Think Global People magazine*

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Watch the video highlights from the Innovation Festival for Global Working

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The first of three parts, Great Expectations: How expectations of pay, borders, mobility and life are changing offers an international, regional and sectoral perspective on the latest compensation trends in global mobility – and their all-important connection to talent management.

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Related reading from Relocate Global

• Global Payroll in 2023: What do the experts say?
• Global mobility transformation moves up a gear
• Where ESG meets DEI: what role for HR?

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Innovative packages to meet changing expectations

KPMG directors and partners from the UK, US, Finland and Canada assess what companies are doing to meet employees’ expectations as new ways of working as practices embed after the pandemic.As Global Mobility steps up to navigate the risks of this new world of work, advise and support the C-suite, they offer international HR managers, global mobility and talent teams insights into the latest approaches as work-from-anywhere, hybrid, flexible and remote work embed.“It’s an exciting time to be in global mobility,” says Marc Burrows, head of global mobility services at KPMG International. “These changing expectations provide mobility professionals an opportunity to bring their expertise into strategic business decisions.Within this context, Dinesh Sinniah, partner at KPMG in the US, and Paula Holmström, partner at KPMG in Finland, observe that “culture is in sharp focus”. Cost control also remains key, with corporate budgets under pressure from inflation.Employers are having to balance this reality with fast-evolving environmental and social governance ESG and diversity, equity and inclusion (DEI) practices, changing employee expectations, social norms and the overall employee experience.For HR and global mobility professionals, this means rethinking compensation and designing mobility policies and programmes for a transformed workforce.As the examples in the report show, these changes are driving innovation in total reward strategies, and reinforcing more positive and sustainable workplace cultures. Fairness and equity, as well as policy communication – often involving financial coaching for employees to help them make more informed choices – have become much more important, for example.

Fairness and equity in employee compensation and benefits

“Pension and benefits have always raised special tax and legal challenges related to mobile workers,” says Robert Rothery, director of KPMG in the US, Alex Thornton, Partner of KPMG in the UK and Laura Hutton, director of KPMG in the UK. “This is especially true for the small but highly valued group of global nomads who move from one international assignment to another and are often restricted from taking part in national pension and social security schemes.“Employers that do not inform their employees about the impact of mobility on their pension rights could face issues with their populations. A transparent tax governance framework that addresses pension arrangements directly can reduce this risk. In the market, we’re seeing businesses take action ranging from bringing their tax governance up to date and checking their policies through to transforming their pension offering for cross-border executives.Dinesh Sinniah and Paula Holmström also warn that companies need to be mindful of the perceived fairness of rewards, for example between home-based and office-based employees and the relative costs of travelling to an office. “It is especially important to clearly communicate how inflation is tied to annual salary increases and bonuses.“A trend in Europe is seeing more employers offer payments toward bicycle leasing, car and bike sharing, fuel cards, public transit and home-charging stations for electric vehicles. Benefits for employees working at home might include smartphones, personal computers and tablets, office furniture and Internet fees.”The challenge is to create programmes that are legally compliant while promoting employee choice and promoting the company’s broad talent and culture goals. This can be difficult to negotiate – especially for employers aspiring to a ‘one company, one culture’ ethos with a large remote or mobile population – for example around LGBTQ rights across different countries and domains.

Transforming total rewards – the emergence of crypto in global mobility?

Despite the obstacles, companies are finding innovative ways to integrate ESG goals into their total rewards packages, including for long- and short-term bonuses and incentives. In Global Mobility, for example, this could be switching to greener choices for household goods moving. For executive pay and rewards, short-term incentives are increasingly centred on ESG-related projects. Both are important levers when designing and costing policies and programmes.Every incentive programme requires clear and trustworthy data to be effective. This means communicating what data is being collected and how, so there is a clear line of sight for the employee. Long-term incentive plans are often trickier to tie to ESG. However, KPMG reports there are companies in the chemicals, energy and forestry/paper sectors who are finding ways to tie bonuses to long-term metrics. These include targeting salary equality, performance against sustainability indices and supply chain sustainability, as well as carbon emission reduction.KPMG's report highlights another emerging theme in compensation and global mobility: cryptocurrency. Some companies – often start-ups – venturing into new jurisdictions have found it easier to manage payroll and have adopted cryptocurrency compensation strategies. But will we see crypto become commonplace? Sinniah and Holmström observe a reticence to roll it out more widely for now because of the currency’s volatility, the current lack of clear legislation around taxation across jurisdictions, and the disconnect between currency performance and business performance – a key stumbling block.However, salaries paid in cryptocurrency for some could “become more of a differentiator,” just as pet-friendly policies have adapted and evolved to become the norm in many companies in Europe’s IT hotspots. If this is to be the case, they urge caution, citing a Finnish executive paid in cryptocurrency, but then landed with a huge tax bill because there was no provision in tax law to allow crypto losses to be deducted against the gains. “While US tax legislation is somewhat more advanced, cryptocurrency remains too volatile and too far removed from business performance to gain traction globally.” As more workers demand greater flexibility over where and how they work, designing attractive, tax-effective and legally compliant salary, benefits and incentives becomes more complex. As KPMG’s report shows, Global Mobility teams “have a wide and expanding variety of options available for creating appealing, globally competitive packages for their highly-valued mobile talent.”

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Watch the video highlights from the Innovation Festival for Global Working

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Read more from the Innovation Festival for Global Working in the upcoming Summer issue of Think Global People magazine and about this year's winners of Relocate and Think Global People Awards in the special supplement. Reserve your copy here.

Find out more about the Think Global People community.

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