There’s long been two primary compensation approaches for geographically disbursed work locations in the U.S. One, a national salary structure, in which pay is treated the same with no relation to location, or two, the application of a method to differentiate pay across locations by cost of labor or cost of living differences. With the recent proliferation of work from anywhere schemes causing a more distributed workforce than ever before, the debate over which approach to use has intensified and grown into a larger discussion about pay philosophy in the U.S. Should companies pay employees based on location, rather than focus on the job role without consideration for location? If an employee moves to a lower cost location should the pay be decreased? AIRINC’s recent survey explores how companies are grappling with this issue and what the future of compensation might look like in the U.S.
Eighty-seven percent of companies report using one-way transfers for truly permanent international moves (the employee is not expected to return to the origin). Almost all survey participants report using international one-way transfers in their purest sense: when an employee’s position permanently moves to another country or when there’s a need to build long-term talent capacity in that country – with the key being that these are essentially permanent moves without future mobility envisioned.