Sonia Dubois· Compensation Manager, Lumen Biosciences
Posted in Global & Mobility ·
A lesson from last cycle. We are a consumer goods manufacturer with about 12,000 employees and a pay review that runs in group currency for budgeting. Finance fixes the conversion rates on 1 October for a review effective 1 April.
Between those dates the Egyptian pound and the Argentine peso both moved hard. Our Egypt budget, set as a percentage of local payroll, was fine locally, but the group view showed payroll cost falling 30% in euros and someone senior asked why Egypt needed a 25% increase when its costs had just dropped by a third. It took three weeks to unpick.
We now budget and report increases in local currency only, and show the group currency figure at constant rates. Interested in how others present this.
2 helpful · 3 replies · 21 views · 4 following
HR Business Partner, Meridian Health Systems
Constant currency is the only way I have seen it work. We show three columns to the remuneration committee: local increase percentage, cost at prior-year rates, cost at current rates. The middle column is the one decisions are made on. The third is there so finance does not feel ignored.
Director of Benefits, Lumen Biosciences
We go one step further and never convert the merit budget at all. Each country gets a percentage of local payroll approved against local market movement. The group total in dollars is a finance forecast, not a rewards number, and we say so on the slide.
Maya ChenWWP
Compensation Manager, Halcyon Financial Group
The harder version of this is roles paid against an international market. Our senior people in Cairo benchmark themselves in dollars, whatever currency the contract says. For about 40 of them we now review twice a year and look at the dollar value of the package explicitly. Local-currency purity did not survive contact with a 40% devaluation.
