"Besides the common difficulties of finding skilled talent and establishing competitive salary structures for local employees, regional complexities around employment laws, local benefits and tax regulations can be particularly troublesome to overcome when operating in these countries," Herod says.

Given many of these issues, more respondents are creating mobility tools enabled by a global job-leveling framework that acts as a common platform between the home and host country locations.

"Besides helping with consistent pay practices across borders, global mobility tools, like job leveling, help companies manage the development and career paths of employees," says Loree Griffith, principal of Mercer's rewards consulting business. "This is particularly important as companies strive to quickly establish themselves in an emerging market and maintain their competitive advantage once there."

In addition to the challenges organizations face with local nationals when doing business in emerging markets, they encounter issues with their expatriates in these markets as well.

The survey also finds respondents face challenges when dealing with expatriates in these markets. In fact, the top three challenges for expatriates in emerging markets include establishing competitive policies for attraction and retention at 38 percent, attracting the right candidates at 34 percent and addressing equity issues between expatriates and local nationals at 33 percent. Less common challenges involve housing assistance and establishing pensions or health insurance coverage.

"International assignments to developing countries can be very costly because of shortages of suitable housing for expatriates, high cost of goods and services, and often high taxes," Herod says. "Additionally, assignments are frequently 'hardship' locations. As a result, companies must implement policies that will attract employees to take assignments at an affordable cost."

Despite most respondents report being satisfied with their established HR policies regarding local nationals and expatriates in emerging markets, about two-thirds are modifying their policies, and 35 percent are still trying to implement appropriate HR policies for local nationals. Another 25 percent of respondents are continuing to establish the right policies for their expatriates.

"Establishing HR policies in frequently fast-changing situations in emerging markets is not simple – and clearly an indication of the complexity of dealing with a variety of HR issues," Herod says.