Erik’s note: We’re happy to present another guest post by Chris Lozaga a Research Analyst in SuccessFactors Global Research team

We talk a lot about the future of work, borderless collaboration, as the war for talent drives businesses to look globally for the best people to get the job done. It is already happening. SuccessFactors Research has a unique window from which to draw insight – the data from our over 3 million active users. We recently studied 41 U.S. based companies that use our compensation module, and looked at how they pay their international talent (people on the payroll in a foreign currency). In an aggregate and anonymous way, we crunched the numbers on pay increases given to 239,000 individuals across these organizations and made some interesting observations.

First, companies are much more aggressive in pay for performance with their U.S. based workers. We found this out by comparing the standard deviation (spread) in pay raises, by percent of salary. This was not particularly surprising, given that the U.S. has very liberal attitudes regarding free markets and compensation. The insight that might surprise many came when we looked at the actual average raise given – the percentage was much higher in India and China than in the U.S. (see below). While there is less variability in these regions, they average pay increase is much bigger. Companies are paying to acquire, motivate and retain this talent.

The war for talent is real. Retention is a major problem in rapidly growing countries like China and India, and companies appear to be paying to keep their international people. Money chases talent.

Winning the war for talent is critical to success. Talent is now the ultimate differentiator for companies – people are responsible for executing the company strategy, generating the new ideas and IP that drives growth. This snapshot of companies and their 239,000 employees shows that U.S. based companies are aggressively implementing pay for performance inside the U.S., but less aggressively for their overseas people. Companies put their money where their talent is.

More details on our findings in International Pay can be found in this downloadable data brief: SuccessFactors Research Data Brief: International Pay for Performance.