Challenges for implementing global grade structures significantly changing
New York, 14 September 2011 —
As organizations strive to maintain a competitive advantage in a changing global environment, many are turning their attention to some foundational tools. Global leveling – the process of systematically establishing the relative value of different jobs within an organization – provides a framework to effectively implement talent and compensation management across borders.
According to Mercer’s 2011 Global Leveling Survey, the primary objectives for evaluating jobs and implementing a global grade structure are to support the development and career paths of employees (68%) and to facilitate the implementation of a global pay or rewards programs (65%).
“Beyond simply helping with pay decisions, companies are seeking much more from their global leveling strategies, such as defining employee career paths, linking jobs to specific behavioral competencies and assessing pay equity,” said Darrell Cira, Partner with Mercer’s Human Capital consulting business.
Conducted this summer, the Survey examines trends in strategies around grading and job evaluation. It includes responses from more than 380 organizations across all industries throughout the US and Canada.
While global leveling has long been used for companies’ executive roles, an increasing number of organizations are implementing grade structures for their other employee groups. Mercer’s survey shows that 85% of organizations report grade structures for executives and just as many for managers and non-sales professionals.
“Years ago, only about half of multinational companies had global grade structures for employees that weren’t executives,” said Mr. Cira. “This increase in the use of global grading for populations other than executives is likely directly related to organizations’ focus on facilitating talent mobility and implementing meaningful career paths for their employees.”
Challenges of global leveling According to Mercer’s survey, more than one-third (36%) of organizations expect to modify their current approach to global leveling or implement a new compensation management structure in the next two years. Yet finding resources and time to do so may be challenging.
The biggest obstacle organizations face with employing a global grade structure is resources and time, reported by almost two-thirds (63%) of organizations. This challenge is followed by the absence of a global HRIS (40%) and resistance of leadership (38%).
“The barriers to implementing global grades have changed considerably,” said Mr. Cira. “While the absence of a strong business case and lack of support from corporate leadership were frequently identified as major challenges in the past, the value of having a global grading structure has clearly become more evident to business leaders today.”
Mercer is a global leader in human resource consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues by designing, implementing and administering health, retirement and other benefit programs. Mercer’s investment services include investment consulting, implemented consulting and multi-manager investment management. Mercer’s 20,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York and Chicago stock exchanges. For more information, visit www.mercer.com.