Effects of Globalization: Compensation and Benefits for Employees

677 Words3 Pages
Compensation and Benefits The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments. But globalization also determines the migration of workforce. This is usually the case of unskilled workers, in comparison with white collar jobs. The process of globalization makes it easier for individuals to look for better paid jobs in other countries. Companies also have the possibility to hire employees from other countries that work for smaller salaries, or to relocate their production to countries where workers require smaller salaries. This situation determines an increased competition on the workforce market in richer countries where individuals come in order to find better paid jobs. Increased demand on the labor market means that people looking for jobs are likely to accept jobs with smaller salaries, and with a reduced offer of compensation and benefits. Basically, the compensation and benefits strategy only depends on the company developing it. Companies are aware of this situation and offer smaller compensation and benefits to the people they want to hire. This is because they know that
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