Uprooting Compensation

Designing and applying geographic compensation differentials is as much an art as it is a science. Periodic revalidations and updates of these differentials are essential. Important differentials can disappear quickly or arise suddenly.

Also, only compensation practices that affect their ability to attract, retain, and hire competent workers should be relevant to the geographic analysis. Therefore, if not recruited from a certain location, the differential should consider the situation of origin and elements that compensate the possible improvements or difficulties of the destination.

Based on our experience, we understand that the use of formulas that consider different factors of uprooting is much more precise and effective than the use of a single percentage for a given location.

Another consideration is the organizational level. The uprooting factors mentioned rarely apply equally to managerial or director levels, as to professional or worker levels.

By keeping geographic differentials and uprooting factors up to date, Human Resources can show itself as a proactive business partner, adapting to change rather than defining a practice that could be obsolete, even generating unnecessary costs.

CompStrategy can help with:

• Establishment of differentials by cost of living and quality of life between origin and destination locations, for cases of personnel transfers
• Establishment of differential formulas that consider different factors of uprooting, not only based on the location (e.g. dangerousness, access to health, others), but also on the individual and family situation of the transferred employee
• Establishment of differentials by cost of living and quality of life for local personnel
• Housing strategy and policy (assingment, subsidy or loan)
• Communication of the uprooting compensation policy and the principles used in its definition to affected personnel or personnel in general