Why is expat pay more complicated than calculating exchange rate? - Preparing you for the future of work.

Why is expat pay more complicated than calculating exchange rate?

Experts trained in how to balance the expectations of international workers with the strategic, financial and practical constraints faced by the employer are in high demand.

The driver of this demand is the technology that makes a larger international mobile workforce possible.

Aligning an expatriate’s reward expectations with company policy is an intricate science.

International assignees must get a fair pay package in return for their willingness to uproot themselves from their local support system. Employers should however not hand over a blank cheque.

If a company pays for staff to take their pets on a foreign assignment, does that include the relocation cost for an employee’s horse? Would a female employee be able to develop her career in Saudi Arabia? Will a country's high tax rate overwhelm the benefits of an otherwise handsome remuneration package? Considerations like these are often overlooked when dealing with expatriates, especially for urgent deployments.

This is where the services of an International Mobility Reward Specialist prove invaluable. Expatriate reward programmes must be based on a comprehensive set of policies for each foreign destination to which employees may be assigned.

Mobility specialists are businesses’ architects of expatriate reward programmes. They are also the custodians of the standard by which all international deployment decisions will be made.

A Mobility Reward specialist develops the what and how of expatriate remuneration and benefits; the International Mobility Policy and the International Mobility Framework derived from it.

The International Mobility Policy is informed by a large body of tax, immigration, legislation, cultural and other data about selected destinations, gathered and correlated by the mobility specialist. They consider rewards in terms of identified trends, best practices and their organisation's own HR remuneration directives.

It is because of the complexity of the knowledge required that expatriate reward programmes should be treated differently than local reward calculations.

Coordination

While the mobility specialist must have a good knowledge of each subject their policies address, it is impossible to know the intimate details of visas, legislation, tax or lifestyle for every target location. For this, they build and leverage a network of validated and reliable foreign area specialists, like relocation agents, tax advisors and environmental adjustment consultants.

These service providers are like the pieces on a chessboard. Without a dedicated organising authority like the mobility specialist, companies would struggle to coordinate the efforts and interests of all stakeholders.

Protecting the investment

Ultimately, an expatriate is deployed to achieve a corporate goal, making their remuneration only part of a larger investment.

Many foreign assignments fail because an accompanying partner is unable to adapt to an unfamiliar lifestyle, culture or surroundings. Another common problem is the lack of a visa for the partner that allows them to pursue fulfilling their own purpose.

It is a pity when either the rewards or the total investment are devalued or even rendered worthless by unforeseen problems that could have been anticipated. A mobility specialist will track cases where a successful transition was achieved in a specific environment. They will also be able to identify the best solution to potential problems, ensuring the employer’s objectives are not derailed.

Bringing order

The greatest advantage of employing an International Mobility Reward Specialist is that they prevent the foreign assignment dynamic from devolving into a chaotic and costly mess.

No organisation that deploys expatriates is too small to benefit from the order that mobility policies and controls establish.

Nicol Mullins is a Chartered Reward Specialist and Chairperson of the International Mobility Group at the South African Reward Association (SARA).

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