Saturday, October 16News That Matters

Advice Needed: Overseas directors making less than their direct reports

Hello! We have remote and global small business that is rapidly growing where some directors are located in countries like Russia or Columbia and make appropriate rates for those areas. We are growing to the point that we need these directors to be aware of how much their direct reports are earning and be able to help manage their pay and salary increases, but some of those reports are from areas like the US and Europe where the cost of living is very significantly higher. This means that in some cases these direct reports are making more in USD than their directors.

I'm not sure how to handle this situation… the options I see in front of me are:

  1. We pay those directors well for that area and hope that they are mature enough to understand that cost of living in other countries is significantly higher and appreciate that they are being paid very well for their region. I'm worried that even with maturity this will make these directors a bit bitter when they are putting in significantly more effort and have more responsibility
  2. We elevate just the directors to American levels of pay for their position. This would cause a wide disparity in how much directors and others in those regions are being paid and we risk jealousy between other directors that know that the directors in these lower-cost regions have a MUCH higher standard of living. It seems like a way out of this situation that is incorrect and may cause future issues.
  3. (Not an option) – We elevate everyone's pay to American wages. We couldn't afford this and the cost savings is why we hire in other regions to begin with – not to say that those people aren't great. If this were the case we'd likely benefit from just hiring Americans to avoid the additional international laws and regulations.

I would very much appreciate any advice anyone may have. I feel that I'm stuck between a rock and hard place. I want very much for everyone to feel that we are doing right by them while also doing what is right for the business. Thank you!

submitted by /u/000Lotus
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