Expatriate Compensation

Lisa Smirnova

Lisa Consulting

THE BALANCE SHEET APPROACH

Provides a compensation package that equates purchasing power

BALANCE SHEET COSTS

Allowances for cost of living, housing, utilities, furnishing, educational expenses, medical expenses, club memberships, and car and/or driver expenses

Domestic Assignment Expenses and Spendable Income Expatriate Assignment Expenses and Balanced Spendable Income + Allowances
Base Salary = Base Salary
+ Allowances as an incentive to take position, foreign service premium, hardship pay, R&R
Taxes = Taxes
+ Allowances to balance extra tax payments
Goods and Services = Goods and Services
+ Allowances to cover cost of living differences, housing, children’s education, medical costs, automobile, recreation, home leave travel
Housing = Housing
+ Allowances for moving expenses, settling in expenses, initial housing costs, and furnishing allowances
Spendable Income = Spendable Income

OTHER APPROACHES

  • Parent country wages everywhere
  • Wean expatriates from allowances
  • Pay based on local or regional markets
  • Cafeteria selection of allowances
  • Global pay systems

THE REPATRIATION PROBLEM

  • Difficult for many organizations
  • "Reverse culture shock"
  • Expatriates must relearn own national and organizational culture
  • Includes whole family

STRATEGIES FOR SUCCESSFUL REPATRIATION PROVIDE:

  • A strategic purpose for repatriation
  • A team to aid the expatriate
  • Home country information sources
  • Training and preparation for the return
  • Support for expatriate and family

ASSIGNMENTS FOR WOMEN TWO IMPORTANT "MYTHS"

Myth 1: women do not wish to take international assignments

Myth 2: women will fail in international assignments because of the foreign culture's prejudices against local women

SUCCESSFUL WOMEN EXPATRIATES

  • Foreign not female
  • Emphasize nationality not gender
  • The woman's advantage
  • Strong in relational skills
  • A wider range of interaction options

CONCLUSIONS

  • HR Management functions
  • IHR Management challenges
  • IHR Management orientations
  • Expatriate managers
  • The role of women in multinational organizations