Expatriates Compensation

Expatriations are one of the most distinctive and powerful tools for companies operating in more than one country. Policies governing the use of this tool particularly affect the balance between costs - which are often comparatively high - and the attractiveness of the international assignments a company offers.

The expatriation process involves considering many technical and professional aspects, but also contains personal, social and cultural elements, which can often be the cause that makes an expatriate choose to return to his or her country earlier than expected. The main cause of an unsuccessful expatriation is the lack of foresight and the consequent improvisation. The expatriate's family is a key and strategic consideration in this process, and this must be reflected in the policies, procedures, and even in the communication and coaching the expatriate receives.

CompStrategy can help identify the drivers of expatriation and design approaches and policies for different types of expatriations. Among other aspects, CompStrategy helps its clients with:

• To have concrete elements to define the type of expatriation that will be applied (e.g. Short-term assignment vs. Expatriation) considering the purpose of the assignment (Individual Development, Business Expansion, Transfer of Know-how, Specific Project, Corporate Control or to temporarily cover a position that requires skills not available locally)
• Define Assignment Additionals or mobility premiums according to type of expatriation, or Hardship Additional based on the risk implicit in the assignment, taking into account the possible origin-destination combinations, their differences in terms of culture, organizational structure, in addition to the traditional variables generally used
• Identify all the elements that should be considered in the expatriation policy, including the methodology for calculating and updating compensation, cost of living, mobility allowances, hardship and risk, living expenses, automobile, recreational travel, evacuation procedures, expatriate education, children and spouse, health coverage, life insurance, and others that may not be so obvious.
• Identify market practices and trends regarding which elements and levels of spending should be covered by type of allocation
• Define the position regarding long-term benefits, whether public or private, such as pension plans or state retirement
• Define procedures for certain technical items or particular situations such as the application of comparative cost of living indexes when these are negative, i.e. involving a monetary reduction of a part of the compensation.
• To define the policy for repatriation, including the final settlement, return to origin, or other solutions that may be defined in advance in the drafting of the policy.
• Develop tools and define procedures to assess whether a given employee is indeed expatriable and the probability of success or failure that can be expected for a given international assignment
• Identify providers of market-specific information for international assignments, including cost of living comparators, expatriation benefits, additional and other
• Identify possible areas of savings in the current expatriation policy