Presentation on theme: "Compensation and Benefits for American Expatriates"— Presentation transcript:
1Compensation and Benefits for American Expatriates Sarah BradyDeanine EstesShannon JohnsonKate Robertson
2Questions for our Expatriates and Experts Ms. Kate Robertson - Human Capital Advisory Services Division - MercerMs. Shannon Johnson – Colgate PalmoliveMs. Deanine Estes - Proctor & GambleMs. Sarah Brady - Chevron
3CAUTION… What is an American expatriate? There is not “one correct method” to create a compensation package.There are more factors above and over what we have discussed…we choose the main issues.
4Failed Assignments Many expatriate assignments fail each year ~30% Family dissatisfactionCultural issuesFeeling of isolation from home companyFinancial dissatisfactionHigh costs associated with failures
5Overview Monetary Factors of Expatriate Compensation Non-monetary FactorsPolitical ImplicationsCurrent Events
6Monetary Factors: Base Salary Comparable to home countryServes as a reference point for establishing additional benefitsGreatest point of flexibilityChoose methodHome country-basedHost country-basedHeadquarter-based“Base salary is the greatest point of flexibility. Companies set a maximum that’s not a maximum, to be honest”-David Kohtynski, Nike
7Monetary Factors: Assignment Premium Incentive: persuade acceptance of international assignmentsEnvironmental or hardship premiumsMobility premiums
8Monetary Factors: Tax Considerations Tax burden depends on location of assignmentSolution: Tax EqualizationSimple and easily understoodBenefits both employee and employerEmployee will not receive the tax burdenMay be high cost to Employer
9Monetary Factors: Payroll Not placed on foreign location’s payrollMay accrue Social Security benefitsConsider exchange rates and inflation
10Non-monetary Factors: Family Considerations Assimilation programsSupport programsCall centersLanguage programsCultural awareness
11Non-monetary Factors: Medical Coverage 27% of expatriates are dissatisfiedEmployers provide full coverage2 plans may be necessarySupplemental plans are necessary
12Non-Monetary Factors: Housing Housing and utilities allowanceGoods and services allowanceCost of housing differencesExpatriates discouraged from selling their American homeAmerican communities in foreign lands
13Non-monetary Factors: Education Match American standardsTuition reimbursement
14Non-Monetary Factors: Days Off Travel ExpensesChildrenEmployeesRest and Recreation days
15Non-Monetary Factors: Repatriation Employees forfeit “special” compensationRe-assimilation problemsDifficult to collaborateResentmentSolutionsRe-assimilation courses offeredPromotion offeredCareer development programsCapitalize on foreign experiences
16Political Implications: Attack on September 11th Fear of domestic and international air travelSafety became top priorityTravel restrictions to certain regionsExtra approvals and precautionary measures“After September 11th some companies curtailed travel and cautioned employees but there wasn’t any huge exodus.”-Wall Street Journal, 2002
17Political Implications: War on Iraq Large impact on expatriates in Middle-Eastern regionFear for livesOpinionated with respect to business implications
18Current Economic Conditions Companies are decreasing number of expatriatesLocalization is a more cost efficient option
19Conclusion Many factors in sending expatriates abroad Every company compensates differentlyTOP PRIORITY: MAKE THE EXPATRIATE HAPPY!!““It is important to get an understanding of how your employees perceive the international human resources policy you’ve put in place and why you have relocated them. It is necessary to make sure they feel good about the programs that are underway to facilitate their international assignment. You want to know you are meeting their needs.”- John Fadel, Deloitte & Touche
20QUESTIONS FOR YOU… QUESTIONS FOR US…? If you were an expatriate, what would you perceive as being the most important benefits? Why?Would you let the current social and political events affect your decision to go abroad? If not, what extra compensation would you deem necessary?Would you fear coming back to the U.S. after working abroad? What types of repatriation programs would you like to see implemented within your company?QUESTIONS FOR US…?
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