At Bright + Early, we believe that the most ethical approach to salaries* for global teams is universal; meaning everyone receives equal pay for equal value of work, regardless of where they’re located. The thing is, salaries are only a portion of the total rewards* pie. If you’ve ever tackled the challenge of rolling out health benefits in the USA vs Canada, or time off in Europe vs North America, you know how tough a universal approach can be. To be ethical, do rewards for international teams need to be the same everywhere? Is that even possible?
*Total rewards: all the things that make up an employee’s compensation. This goes beyond base salary and includes things like benefits, perks, and equity in the company.
*Ethical pay: aligning a pay strategy to the impact we want to have in the community, our values, and our team. Something we can stand behind and feel confident sharing.
Our take: in an ideal world, every employee of an organization would get the same great rewards, no matter where they're working from. However, there are barriers to creating a universal experience for a global team. Differences in legislation, cultural and social norms, and healthcare policy make developing a singular plan challenging. Add on the reality of cost and administration, and, likely, making your total rewards equal across a global team is an even tougher ask. However, there’s still a way to make it ethical!
Not sure where to start? Here’s our step-by-step framework for designing an ethical global rewards strategy. As we go along, we will apply the framework to MerryGoRound, a fictional startup disrupting the ice cream space.
Let’s get into it!
Step 1: Understand your package
When designing rewards for global teams, we first need to look at each piece of the total compensation pie. What are the barriers to creating a more equal experience for that particular benefit across different countries? Let’s unpack each category below:
- Cash: this includes base salaries, bonuses, and commissions.
- For global teams: how are we approaching salary? Is it localized, universal, or blended? If you’re still figuring this out, check out our guide to global pay.
- Paid time off: this includes vacation, sick, bereavement, parental, and other leaves.
- For global teams: how do we address the inconsistency in time off mandated by each country?
- Basic healthcare: this includes a healthcare package that covers, at minimum, mental and physical health expenses, dental, drugs, and vision.
- For global teams: how do we reconcile the differences in government-subsidized healthcare and the availability of different types of health practitioners across each country?
- Additional healthcare: this includes more specialized healthcare support like parental leave top-ups, gender-affirming care, and pregnancy termination.
- For global teams: how will companies overcome the legal, geographical, and cultural barriers that some countries face in accessing these services?
- Financial wellbeing: this includes investing in our team’s retirement or providing equity.
- For global teams: how will companies align to legal requirements around receiving equity in each country? How will companies reconcile differences in expectations and mechanisms for investing in retirement?
- Learning: this includes learning & development stipends, offsites, and conferences.
- For global teams: how will companies support team members who experience issues traveling to offsites and conferences due to their country of residence? Are we willing to cover expenses?
- Global mobility: this includes relocation, access to digital nomad visas, and work-from-anywhere policies.
- For global teams: how will companies reconcile differences in accessibility to these services that stem from the employee’s country of residence?
Navigating these benefits can be challenging in a team that’s distributed across many countries. To learn about the specifics of each country’s legislation and working norms, you can lean on free resources like Papaya Global’s Countrypedia or Oyster’s global hiring guides. If you already use an Employer of Record service, you may be able to consult them about a country’s hiring practices.
Our friends at MerryGoRound recently went global and are actively hiring in more countries. They’ve aligned on their ethical salary approach and are now looking to build a global strategy for their benefits, perks, and equity, but they aren’t sure where to begin. While some international team members are full time hires, others are classified as contractors.
Step 2: Create your wishlist based on your values
How do we decide on what to include as part of total rewards? This is where your company values come in; you can use them to help you determine what to invest in.
MerryGoRound values wellbeing, inclusion, and creating a consistent standard of living across the company. So, what’s on their wishlist? Regardless of location, they want to build:
- An equal experience for parents in terms of the leave length and financial support they get when growing their family.
- A consistent offering for health coverage and time off.
- Universal access to pregnancy termination and gender-affirming care. MerryGoRound believes everyone should have bodily autonomy and live free of discrimination. They view these services as part of essential healthcare.
- They’ve gotten feedback that the flexibility to work from different countries is important to the team’s life satisfaction and emotional wellbeing. So they’re keen on improving the team’s access to digital nomad visas, relocation, and a work-from-anywhere policy.
Step 3: Prioritize your wishlist
There’s an endless abyss of things we can add to a benefits package. We suggest a custom approach. It’s important to design your total rewards around not just your values, but also what will do the best job of meeting the needs of your unique team. This means prioritizing things that:
- are a necessity for everyone, regardless of how they identify;
- lean towards employee choice;
- are essential precursors for perks we want to offer in the future.
What does it mean to lean towards choice? We want to prioritize the benefits that give folks the flexibility to invest in wellbeing in the most impactful way to them. When we think about wellbeing, we often think about mental or physical health. However, wellbeing also spans other areas such as economic and social spheres. Benefits like time off and salary provide the most flexibility to employees for investing in the areas that are most important to them.
Following Bright + Early’s framework (illustrated above), the first part of our pay package that we’d prioritize is cash. If we’re looking at making other perks universal but haven’t considered a universal approach to pay, we will want to correct our salaries first. A fair salary is a minimum necessity for everyone to pay for basic needs like shelter and food. These urgent needs are a precursor to everything else.
Our second priority is the second layer of the circle, which is time off and health benefits. These are also needed by all employees. They can use health coverage and extra time to invest in the areas of wellbeing that are most meaningful to them.
Then, we’d move on to special health benefits, which include things like parental leave top-up, and gender-affirming care. We also have financial wellbeing, including perks like company equity or retirement funds.
Last, we’d tackle learning & development (which can include stipends or access to different offsites and conferences) as well as global mobility perks like work-from-anywhere policies. Though important, these are at the outer end of the circle as we recommend addressing more urgent needs like shelter and health first.
Caveat: There may be situations where benefits in the outer part of the matrix need to be prioritized first. Let’s take pregnancy termination as one example. While we’ve mentioned that benefits like cash pay, time off, and basic healthcare should be prioritized first, there may be a situation (such as a life-threatening pregnancy) where lack of access to this service puts an employee at risk and affects their ability to do their job. Since there may be exceptions, we recommend you start with this framework to guide how your team prioritizes, but that you also listen to your team and customize how you design your benefits based on their needs.
Let’s use this framework to prioritize the rest of MerryGoRound’s rewards wishlist:
- Health coverage & time off. They’ll want to look at onboarding their contractors as full-time employees so they can receive these benefits. These are also precursors for improving parental leaves and top-ups, as well as other special health services below.
- Universal parental leave top-up & leaves.
- Pregnancy termination & gender-affirming care. We’ve prioritized these ahead of the rest of the benefits below as they are medical needs.
- Access to global mobility through relocation, digital nomad visas, and a work-from-anywhere policy.
Step 3: Determine what you can control
There are many factors outside of a company’s control that create equity gaps when designing total rewards for distributed teams. Fortunately, there are some ways for them to take responsibility and bridge those gaps. To help us decide a company’s degree of control, we can ask:
- Are we placing a barrier to a more equitable experience? For example, a policy disallowing remote work might be in conflict with accessing certain health needs outside of the employee’s immediate area.
- Does this reward affect an employee’s ability to do their job well & thrive? For example, lack of access to basic health benefits could affect their performance on the job.
- Would not providing this reward conflict with our values? For example, a company that values balance but provides the legal minimums for time off would be operating in conflict with its values.
After reflecting on these three questions for each benefit on MerryGoRound’s wishlist, here’s how they’ve determined their level of control toward creating a more universal experience:
- Health coverage & time off: High Degree of Control. The company has direct control over offering equitable health care coverage and time off. As part of their wishlist, MerryGoRound wants to offer a consistent healthcare and time off plan, and they have direct control over how much they want to offer outside legal minimums.
- Universal parental leave top-up & leaves, pregnancy termination, and gender-affirming care: Medium Degree of Control. The company wants to create a universal experience for team members to access the above. They may not have control over local legislation, but they do have control over designing a “work from anywhere” policy. By having a remote work policy, the company enables team members to access care that they may not have access to in their area of residence.
- Access to global mobility: Medium Degree of Control. The company has a medium degree of control over where it can and cannot employ full-time employees. The company cannot control laws around relocation or digital nomad visas, but the salaries they pay could affect whether team members are eligible for these visas or can move to a new country.
Step 4: Identify (and fill) any gaps
Now that you’ve created a wish list for total rewards and determined your level of responsibility to each area, you can start to determine how you’ll fill the gaps.
Here’s how MerryGoRound has addressed the equity gaps for each area of their wishlist:
- Time off: They applied a generous universal policy for all locations. In the few employee locations where more time off is mandated, they’ve committed to complying with that particular country’s requirements.
- Health coverage: They partnered with a healthcare provider that covers multiple countries, like SafetyWing, to build a universal healthcare program. Since MerryGoRound values wellbeing, they also wanted to address inconsistency in mental health support across various countries, so they partnered with a global provider like Plumm Health.
- Parental leave and top-ups: They applied a universal policy here. They decided to go with a baseline minimum of 80% top-up for 6 months as they have limited financial resources. Once again, if a country mandates a higher amount of leave or top-up, they’d align with that requirement.
- Pregnancy termination & gender-affirming care: They used an external healthcare provider’s health spending account to administer funds confidentially that would cover costs of a procedure, travel, and (if necessary) costs related to a permanent relocation.
- Access to global mobility: They’re already paying universal salaries, which make digital nomad visas and relocation more accessible. They’ve also implemented a work-from-anywhere policy to help folks work and travel in other countries.
Step 5: Ship it!
To recap where we’ve arrived, we’ve taken an ethical approach to global benefits by:
- defining where we’d ideally like to create a universal experience, given our values;
- prioritizing which benefits we’d invest in first;
- aligning on which benefits we have the most control over; and
- applied creative solutions to bridge equity gaps
Let’s put the pieces together:
- Set milestones: there may be situations where we cannot address all the equity gaps we wanted to resolve. We can consider taking smaller steps to get to our ideal state. For instance, we can leverage our voice as a company by lobbying for change and supporting organizations that align with our values. We can also commit to milestones that help us offer a certain benefit in the future. For example, before launching a perk to support gender affirming care, we will want solid time off and healthcare benefits in place to support them.
- Get it in writing: Add your ethical global benefits approach to your pay philosophy. We have a helpful template in our Guide to Paying People to get you started.
- Launch: discuss any changes openly with your team, and allow for questions and feedback.
As companies think about more ethical approaches to base salaries, we encourage them to bring all their rewards along. While a universal approach may be hard given the various geographical, legal, and cultural barriers, applying an ethical pay framework to global benefits can help us remain true to our values.
The Bright + Early team
Want to dive in deeper? Bright + Early offers compensation research, strategy, and philosophy development for companies that care. Drop us a note at email@example.com to get started.
At Bright + Early, we recognize that certain groups of people experience marginalization, and the work we do is guided by our dedication to challenging and removing oppression and discrimination. This guide is based on the current state of government support for various benefits and services, versus what the role of government should be. We focused on what is in our control when navigating the intricacies of equitable benefits at a global scale.
Our resources are meant to be helpful, but they’re not a replacement for talking to a lawyer when navigating a specific employment challenge or finalizing your policies.