C&B : Local leadership want it “their” way, not the corporate way – what can I do?

How to implement global when local management does not agree

Holly, one of my new subscribers recently commented :

“One of the biggest challenges involves developing global strategy that inter-relates both compensation & benefits as well as global mobility issues among 100 countries. One size does not fit all situations – and a regional approach has been employed. However, that approach is often undermined by in-country leadership who want it ‘their’ way. Any comment?”

I understand your challenge. In the past I was also confronted by local leadership who wanted to have it “their way” instead of the global policies for C&B approaches and/or international mobility.

Some things that may help :

1 – Design your global policy to include some local flexibility where needed.

For example you could say : we will have a minimum of 2x annual salary as life insurance and will target to be at median of market for all benefits, except for one benefit per country which can be targeted at 75% percentile as part of our EVP” and put in place some rules/governance for the local country to select and recommend that benefit, with approval from HQ.

Another example could be to say that you target 65% percentile of market for Total Target Cash, with a global Sales Incentive Plan – but the pay mix between fixed and variable pay can be adapted between 2 or 3 different levels to better reflect local market conditions.

Make sure that your global process of annual salary planning includes enough time for getting local feedback, and that you establish a trusting working relationship with the local HR or C&B representatives.

This way if there really is a need for an exception, you will be alerted soon enough and can make informed decisions to help prevent even bigger issues in the future.

This requires that you constantly educate local HR/C&B on best practices and on corporate philosophy (even better : include them in the definition of that global approach). And of course it means you need to really listen to their challenges – not just pay lip service to their feedback.

One of the best ways to establish that trust is, if you can, to travel to the local country and spend some time there.

I remember solving nagging issues in some of my countries, just by spending one week there and meeting with people.

Sometimes, just showing up will give you an opportunity to apprehend some of the real challenges faced locally (whether it is high inflation, high employee turnover, difficulty to hire, or a senior leader who needs to see that corporate cares – and is in charge).

Showing up also means that there is less temptation for local management to “hype” an issue – because you will see whether it is as big as they claim… or not.

Another thing which really helped me was to facilitate internal networking and the sharing of local solutions to issues.

For example, I had weekly or bi-monthly calls with each local HR, as well as a regional call every 6 to 8 weeks. And of course, as many ad-hoc conversations as needed.

I also facilitated interactions between countries that would otherwise not necessarily be in touch, when they shared a common issue (for example, Turkey and Venezuela if they faced similar issues of high inflation).

Finally, one of the best things to do in case a country wants to do it “their way”, is to educate not just HR, but the whole local leadership team, on the benefits of a more centralised approach.

For example, demonstrate to them the overall global costs of mobility, and how by having only 2 or 3 globally approved international household goods removers, you can save large amounts of money globally even if the cost is higher locally compared to their preferred local provider.

It is really important, and will help local HR, that you make a presentation (can be through video conference) addressing their pain point and showing how the organisation benefits at a consolidated level even if it is apparently a bit more costly at the local level. These people are leaders and they understand these concepts. And don’t forget to try to make the local CFO your ally!

All in all, there will always be exceptions and some degree of flexibility that is required.

I don’t think that the flexibility itself is an issue, it’s the lack of control and/or governance which can create some issues.

So be very clear on the rules of delegation (for example : changes in local pension scheme that mean no increased cost but a better design can be decided at local level, but the addition of any element to the scheme that costs more than x% of the premiums needs to be revised by corporate, and change of provider can only be driven centrally).

Enforce these rules of delegation consistently, and in time you should have a more practical, centrally controlled and yet locally-adapted system.

Any other suggestions from my readers ? Please share them in the comments below !

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  1. Fully concur with your approach. The basis of all of this is transparency on what will be implemented but importantly clarity of the changes in future and stick to it

  2. John Nichols says

    A perennial issue that can become a problem.

    There must be good two way communication and understanding and Sandrine is right that, whilst Skype is good, there is no substitute for face to face contact on the ground. The old adage of “I’m from Head Office and I’ve come to help” does not not often go down well and there can be resentment if, depending on the issue, an HQ contracted consultant is sent in too. (I know!)
    There can be a way of HQ establishing some preferred objectives but leave room for local tactics in implementation. However, compliance to HQ and local legislation is paramount.

    • I agree with John – compliance to HQ and local legislation is paramount. To enforce this compliance, I always prefer to start with education and gentle guidance, before getting to the more forceful approach of “please explain why you did not follow corporate rules”, then “there will be negative consequences if you don’t follow our model”. Always extend trust first, and if that trust is abused, be strong enough to make them accept responsibility for their lack of compliance. In most cases, you will find that people act within the guidelines 🙂

  3. Sometimes the local leaders are control freaks that also causes a problem,
    changing the mindset is very difficult if the leaders want to stick to the old cliched style of managing things….

    • Yes Kritika, it is sometimes difficult to help management change their way of thinking. All we can do is try to present our case in the best light possible, and show the advantages of the “new way”. Sometimes we can get compliance by “forcing” things onto people, but only when we get true buy-in do we also get effective support.

  4. This is a good reason to start with a corporate compensation philosophy with input and buy-in from the entire corporate leadership. Ensuring that local HR/compensation strategy and tactics are aligned with overall/local business goals and objectives should do much to guide local C&B policy development. This approach, consistent with corporate philosophy, should resolve most problems, particularly when the local group is on a different continent!!

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