Ups and downs to similar pay at multinationals

Equal rates for similar jobs in different jurisdictions can have unintended consequences
By Paul Pittman
|Canadian HR Reporter|Last Updated: 09/25/2012

Deciding whether to provide similar levels of pay for work of equal value is a natural consideration for Canadian companies with operations abroad — internal equity is a key platform for human resource strategy. However, a number of challenges must be surmounted, which raise the question: Is this a noble cause or a foolhardy gesture?

In looking at what “similar pay” actually means, it’s important to look at why there are differences in pay for the same job in different countries.

Talent supply: Labour is not free to move at will across international borders and, while this is changing, at different times countries will have shortages of certain types of skills that cause competitive pay to increase at different rates.