Cafe Classic: Global Nomads... What Are They And What Do We Pay Them?

Editor's Note:  Thinking outside the box (because it seems more and more of our work lives seem to operate in that space), Jacque Vilet explores the Classic idea of how to pay a global nomad.

Sometimes I like to think about possible new scenarios in the business world that will stretch compensation specialists' ability to find creative solutions.  Lately I've been thinking about one scenario that is already happening in a few companies.   I'm talking about a group of people called "global nomads".

Global nomads are detached from country and culture. They may have been born in Algeria, lived as a child in Brazil and the UAE, gone to school in Switzerland and are multilingual.   They have worked in multiple countries ----for example China, Argentina, Germany and Saudi Arabia.   They may not be sure what country to call their homeland.    

They are travel-ready at all times.   They are on the road 70%-80% of the time.  Because of their chaotic life, most are single, divorced or widowed.  They may be in one country for one year; move directly to a second country for three months; and then to a third country for six months.  Many times they report directly to the CEO, and are used mainly as “trouble-shooters” and “problem-solvers”.   They provide top management feedback and recommendations on strategic issues such as projects, markets and competitors. They are high enough in the corporate ranks to have decision-making authority.

The big issue is that these skills are highly sought after and highly transferable from company to company. Global nomads know their value. To CEOs they are like gold.

Read carefully: 

1)    I am not talking about C level executives who have had global experience, reside at headquarters and whose role is part of top management (although it would be nice to have more globally experienced top management).

2)    I am not talking about expatriates who may once/twice in their career reside/work overseas and then return home.  

3)    I am also not talking about young employees that are being groomed for future management positions by providing them several overseas assignments.

Now that we understand who they are ---- how in the world do we pay them?   Currently, the few global nomads that exist have contracts that are individually negotiated.

For the vast majority of employees, compensation specialists rely on compensation surveys for each country where employees work/live.  This includes traditional executives.  With global nomads, traditional compensation models are best left on the shelf.  Why?  The emphasis on local country benchmarks as the sole determinant of competitive pay breaks down.  What country are you going to use for a competitive market when they may be working/living in multiple countries during the year?

I know what you must be thinking:    “Vilet is crazy.  This would never work due to legal and tax issues from country to country.”   I may be crazy, but there have been all sorts of issues in the business world that have strained credulity in the past, and I’m sure this one won’t be the last.   In fact there is a school of thought that says over time CEO pay will converge worldwide.  That will be a very complex issue too.   But that’s a different subject.

In the meantime let’s ask ourselves some questions:

1)    Where does the global nomad “live” when not on the road?  If he/she always goes back to the same country, maybe we could just treat him/her as an expatriate from that country?

2)    In what currency do we pay him/her?

3)    Will there be so few of them we should just ignore creating a policy and treat each one as a “one off”--- with a compensation package that is individually negotiated?

4)    If we do create a policy/structure, how do we benchmark  externally to arrive at a competitive compensation package?

5)    What is their career path?  Do they not even want one because they love their “nomadic” life?   Maybe they don’t want to become part of management and have to “fit” within a corporate system.

6)    How do we create a retirement plan for them?

7)    How are other companies that have global nomads handling these issues?

I’m sure that corporate and labor laws and taxation will act as obstacles along the way. Laws and tax issues are not typically “show-stoppers” for most companies.   There is usually a legal way to make things work.  The usual "culture" issue won't be a problem as these people are adaptable to any culture.

If global nomads are hired, it will definitely send the lawyers and tax specialists scrambling---- along with compensation specialists!  But I firmly believe that where there’s a will, there’s a way.

What do you think?

Jacque Vilet, President of Vilet International, has over 20 years’ experience in Global Human Resources with major multinationals such as Intel, Texas Instruments and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expatriate twice during her career. Jacque has the following certifications: CCP, GPHR, HCS and SWP as well as a B.S. and M.S in Psychology plus an MBA. She belongs to SHRM, Human Capital Institute and World at Work. Jacque has been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications.

Comments

[Paul Pittman]

Hey Jacque well done.

I have had the good fortune to manage a number of these folks in several different industries and inevitably the solution is different dependent upon the industry and company. In several industries (mining, Oil, Global consumer goods) the expatriate career path tends toward nomadic and so the Global Employment Company is a useful tool for managing the administration (benefits, pension, tax, employment law, soc security etc) but it doesn't solve the question you pose. What pay? https://thehumanwell.com/an-introduction-to-global-employment-strategies/

Two approaches I have seen:
1. Individual package designed around where the expatriate plans to retire i.e. what would be reasonable to accumulate savings based on the cost of living in that location (rough and ready, personalised) validated with a collection of external proxy multi-country benchmarks.
2. A company with a global pay policy that ensured executives irrespective of location enjoyed the same after tax, shelter and G&S, relative disposable income. In that environment it didn't prove too difficult to build up a compensation approach.

Inevitably one will need a globally competitive offering and so overtime these tend to gravitate to being benchmarked to the highest paying countries.

Thnx for the thoughtful start to the day!

[Jacque Vilet]

Thank you Paul for sharing your ideas!