As companies increasingly operate globally, the complexities of compensation have grown exponentially. Understanding market trends, adjusting for inflation, achieving pay equity, and offering competitive compensation packages are now essential to attracting and retaining top talent worldwide. 

Deel’s State of Global Compensation Report 2024 provides valuable insights into these trends, helping HR leaders and business executives make informed decisions about their global workforce. 

This article will explore the report’s key findings, what they mean for organizations aiming to stay competitive in a fast-evolving global market, and actionable steps to respond to each trend. 

1. US compensation recovery: A sign of renewed stability 

According to the report, the US has seen a rebound in median compensation levels, especially in engineering and data roles, surpassing figures from 18 months ago. This uptick signals a period of stabilization and renewed growth after a challenging period of layoffs and budget cuts in the tech and data sectors. 

What this means for organizations: For companies headquartered in or recruiting within the US, the recovery in compensation rates highlights the need for competitive salaries in these critical roles. This trend could pressure organizations to reassess their budgets to avoid losing top talent to competitors willing to pay market rates. 

For global companies, this data also raises the question of balancing compensation strategies across regions. 

How to proactively address this trend: 

1. Allocate a budget buffer for key roles in high-demand areas like engineering and data to stay competitive as the market shifts. 

2. Leverage tools like Deel’s salary insights tool to ensure competitiveness in various markets. 

3. If immediate salary adjustments aren’t feasible, enhance other benefits, such as flexible work arrangements, upskilling opportunities, or wellness programs, to add value to your compensation package. 

2. Leading countries in compensation: Canada, the US, and Great Britain 

Canada, the US, and Great Britain are now leading in compensation across most job types, positioning themselves as lucrative markets for top-tier talent. This data points to a shift in the global talent map, with more professionals potentially drawn to these regions for higher salaries and better growth opportunities. 

What this means for organizations: For companies based in these regions, this trend reinforces the importance of maintaining robust compensation packages to attract high-caliber professionals. However, for companies in other countries, it may mean considering non-monetary perks or remote work flexibility to compete with higher-paying markets. 

How to proactively address this trend: 

1. Consider hiring remote talent from regions with lower compensation averages, using Deel’s platform to manage payroll and compliance across borders seamlessly. 

2. Invest in employer branding, highlighting aspects like company culture, growth opportunities, and mission-driven work, which can often outweigh purely financial considerations for many candidates. 

3. Inflation-adjusted salary increases and real wage pressure 

Workers in Sweden, Spain, Italy, and the UK have seen the highest inflation-adjusted salary increases, signaling that companies in these regions are trying to keep pace with rising costs of living. 

On the opposite side of the spectrum, workers in Poland, Colombia, and Brazil are experiencing net decreases in real earnings due to high inflation, which poses retention and morale challenges. 

What this means for organizations: Organizations with employees in high-inflation regions may need to prioritize regular wage reviews to keep pace with the rising cost of living. Inflation-adjusted increases can be essential to maintaining a satisfied workforce and reducing turnover in these areas. 

On the other hand, in regions where real wages are decreasing, companies need to be mindful of the potential morale impact and consider other forms of compensation or benefits. They need to track employee satisfaction and expenses, providing a holistic view of how inflation impacts your workforce across regions. 

How to proactively address this trend: 

1. Implement bi-annual or annual salary reviews in high-inflation regions to ensure employees’ pay remains competitive and fair. 

2. Where feasible, introduce a cost-of-living adjustments (COLA) policy to help employees keep up with inflationary pressures, especially in highly impacted regions. 

4. Progress in closing the gender pay gap 

The Deel report highlights progress in closing the gender pay gap in specific roles and regions. Notably, India and Great Britain show narrow pay gaps in technical roles, and the US has achieved pay parity in marketing and sales roles. The data points to a broader movement toward fairer compensation, particularly in sectors historically plagued by pay disparities. 

What this means for organizations: The narrowing gender pay gap is both a cause for celebration and a call to action. Organizations need to prioritize pay equity audits and ensure their compensation structures are fair and transparent. Doing so is critical for compliance and strengthens employer branding and talent retention, particularly as more candidates prioritize equitable workplaces. 

How to proactively address this trend: 

1. Conduct regular pay equity audits and use data to identify and address pay disparities across roles and regions. 

2. Establish transparent pay scales. Define pay ranges for roles and ensure they’re accessible to hiring managers and employees, promoting fairness and accountability. 

3. Equip managers with training on unconscious bias to help prevent inequities during hiring and promotion processes. 

5. Equity compensation: An attractive incentive for technical roles 

The report indicates that equity compensation is now a significant component of compensation packages for software engineers. These engineers receive equity grants equivalent to 75-150% of their salary, typically vesting over four years. This trend shows that companies increasingly use equity as a long-term incentive, especially in tech, where talent is costly and highly mobile. 

What this means for organizations: Equity compensation can be a powerful tool to attract and retain top technical talent, especially in competitive markets where direct compensation alone may not be sufficient. 

By offering equity, companies can foster a sense of ownership and commitment among employees. However, administering equity across borders can be complex due to differing regulations and tax implications. 

How to proactively address this trend: 

1. Consider equity as a key part of your compensation strategy. Design attractive equity packages for in-demand roles to create long-term retention incentives. 

2. Educate employees on equity benefits: Provide resources to help employees understand the value of their equity and the vesting schedule to maximize its retention impact. 

3. Leverage Deel global compliance tools that help HR and financial leaders navigate these complexities, ensuring compliance with local laws and making offering and managing equity packages for a distributed workforce easier. 

A new era of global compensation management 

The insights from Deel’s State of Global Compensation Report highlight that compensation strategies can no longer rely on one-size-fits-all approaches. HR leaders and executives must navigate a diverse and ever-changing global landscape to attract, retain, and fairly compensate talent. 

With wage recovery in the US, compensation leadership in countries like Canada and Great Britain, inflation impacts in various regions, and strides toward pay equity, there’s no shortage of challenges and opportunities. 

Deel is an invaluable asset for companies facing these complexities. With a comprehensive payroll and HR platform servicing over 150 countries, Deel enables organizations to streamline global payroll management, compliance, reporting, and talent management. Deel’s features, from self-serve onboarding to automation of HR tasks and robust document handling, allow HR leaders to focus on strategic decision-making rather than administrative burdens. 

Whether tracking inflation-adjusted salaries or ensuring pay equity, Deel provides the tools needed to adapt to a dynamic global workforce. Book a demo today to see how Deel can help you.