SENNA

Global Firms Navigate Complexities of Paying International Teams

In a world of borderless business, companies are grappling with the intricacies of compensating employees across different jurisdictions. As firms expand globally, they must navigate a web of local labor laws, tax obligations and regulatory requirements to ensure fair and compliant pay practices.

"If a startup is looking to expand internationally, it's always better to hire local talent in those countries and work with local experts to truly integrate into the market," said Hannah McGrath, Business Content Lead at Wise, a cross-border payments provider. Each country has its own unique rules around employment, social contributions and tax responsibilities, she noted, so having an in-country accountant or tax advisor is crucial.

Planning for regulatory reporting requirements in each jurisdiction is also essential, McGrath advised, to maintain full visibility and avoid surprises. "The golden rule is to do thorough market research to understand which countries offer the skills you need, and ensure those locations have competitive compensation rates compared to peers," she said.

Thomas Hézard, Chief Strategy & People Officer at fashion resale platform Vestiaire Collective, echoed the importance of laying the right groundwork. The company has multiple international offices and has had to thoughtfully structure compensation and benefits to attract top local talent.

"It's key to have a deep understanding of the local labor market, including typical salaries, social charges and tax implications," Hézard said. "This allows you to build an attractive, competitive offering while ensuring full compliance."

Beyond the mechanics, global compensation strategies also need to account for cultural nuances, experts say. What may be considered a generous benefits package in one country could fall short in another. Incorporating local perspectives is vital.

"We work closely with our in-country HR teams to design localized compensation programs that resonate with employees and align with market norms," Hézard explained. "It's a continual process of adapting to each environment."

The complexities only compound as firms scale their international footprint. But getting the fundamentals right from the start - tapping local expertise, benchmarking pay, and tailoring rewards - can help smooth the path to global growth.