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However, applying them consistently across multiple locations proves to be quite the head-scratcher, given the variance in geographically and culturally specific norms throughout the world.

Today’s Prevailing Compensation Challenges

The challenge for mobility managers and the business units who support mobility is dealing with individual assignment complexity, envisaging greater mobility policy segmentation and, if relevant for the company, mapping each compensation approach in a reasonably consistent way. Best-in-class programs for both the company and the assignee are therefore achieved through a fine balance between:

• Clearly defined purpose and measurable outcomes
• Attunement and equity
• A total package that offers various types of perks and incentives to not only the employee but also accompanying family members.

Here’s How to Get There

Creating consistent and equitable compensation packages for expatriates requires an understanding that global compensation typically includes benefits in kind, such as health and wellness benefits, stock options, and tuition assistance as well as salary and allowances. In some locations, greater emphasis will be placed on the former, and in other countries, the latter, making it challenging to accurately compare the value of different packages.

Clients that have developed various assignment types recognize that career growth opportunities and experience gained by living in another culture are critical components in this equation and are seeing the value in taking a total rewards approach to designing compensation packages: aligning compensation with the job function and the location to enhance their recruitment efforts and attract the best talent for these roles.

At the same time, to achieve consistency and equity, companies must be knowledgeable about and responsive to factors that are and always will be in flux: exchange rates, inflation, and varying levels of taxation. Additionally, local laws and compliance regulations may require a person to receive a certain amount of compensation in either the home or the host country, further impacting everything from cash flow to the ability to take care of expenses in both the home and host countries.

It’s also important to consider the home/host country pairs and the standard of living in both. The more companies can do to minimize the differences in the costs of living with allowances and adjustments, keeping the base salary intact, the more seamless the transition back to home country standards will be. When companies do not acknowledge and support the differences in the costs of living with allowances and/or other monetary adjustments, they face great challenges in appropriately compensating their employees in the long run. What may seem appropriate for an outbound assignment may not be sufficient or competitive for repatriation, sequential assignments, or localization in the host country.

Our Recommendation: Tapping into Total Value

The best outcome—meaning the best program for both the company and the assignee—occurs when the company thoroughly assesses the purpose of the assignment and whether or not it is temporary or permanent in nature.

Companies and their employees must understand the total value of an assignment package, not just the financial components.

Be mindful of the employee’s point of view, starting with these questions:

• Are assignees’ needs being reasonably and appropriately met?
• Is compensation fair and competitive with the role and skill set?
• Does the overall package provide flexibility and support for family members so they too feel the incentive to move?
• Does this position and the total package provide long-term career growth opportunities beyond this specific assignment?

When the purpose and value of the assignment is felt by both the company and the employee alike, employee satisfaction tends to climb, and so do assignment outcomes. And this makes perfect sense: setting fair and realistic expectations is fundamental to setting people up for success!