Thus, the two approaches have different foci and hence also different advantages and disadvantages see the following table : Apart from the stated differences in the two approaches and the related benefits and drawbacks, the going rate approach seems to be more cost-effective than the balance sheet approach. The challenge with global policies is that assignees from different countries and culture will not value the same policy components. Similar to the lump sum plan, this approach provides a single sum of money and the expatriate is offered a selection of options. One of the characteristics of emerging markets is their very steep salary curve — in other words, low salaries for low level positions but very high salaries for top managerial positions. .
Be sure that you are clear with the tax authorities in your home country about possible double taxation exemptions or credits against your home country personal income tax. Getting these new perks, however, takes some strategy. In addition, salary structures saw dramatic changes over the past 15 years in emerging markets. In some African countries, for example, there is a cultural expectation of redistributing the gains to the family and the social network. Alternative Approaches Localization The localization approach involves basing the expatriate's salary on the local host country's salaries.
The key element is whether the move is required by the employer for business reasons. Perhaps there are perks you hadn't considered or a more flexible time line. Similarly, in most cases you and your family are eligible for a language classes, nevertheless some companies provide solely on-line courses or limit face-to-face lessons to certain amount of hours. Some disadvantages include the usual need for negotiated supplements and pay based on host country economics versus performance and job responsibilities. Traditional expatriate allowances and benefits in particular should be reviewed in the context of emerging markets from a cultural and competitiveness perspective.
Many small businesses work like this as they cannot afford the expensive expat packages that are usually associated with big multi-national companies. This may be important if your contract contains details of specific amounts for expatriate compensation benefits, repatriation or tax equalization as, with the passage of time, these may need to be increased in order to adequately meet your needs. However, that may again differ according to your level in a company ladder, family size or a fact, if you own a real estate in your home country or not. This is done by using statistical averages based on each national government's consumer expenditure survey. Moves from and within emerging markets challenge traditional expatriate compensation approaches and encourage employers to reconsider how they do balance sheets and explore new options such as local plus.
A component of relocation is the eventual cost of repatriation or moving back to the home country, an expense that some employees may overlook. For instance, a large international group who has sent staff abroad for many years will have a clearly defined policy in line with the type of international mobility duration of assignment, geographical area, candidate profile, family circumstances, etc. Schooling: the single largest expense after salary and housing is usually education for your children. This approach is much more inclusive. Given the lack of options and the difficulty to induce quality people to become expatriates, international organizations were forced to provide regal benefits to their overseas managers. This first move is treated as a transfer with a compensation package based on a local or local plus approach or as one based on a reduced balance sheet approach — that is, retaining the link with the home country but with limited allowances and benefits.
The presentation covers global trends to more specific information relevant to fast growing sectors like Business Process Outsourcing. Developing a new mobility mind-set One of the main myths about mobility trends is the long-heralded end of the traditional expatriate. While less confusing to implement, this can be a difficult position for the employee. While the premium for being trained abroad, especially for returnees, is decreasing, the salary structures in China remain complex. You must also be sensitive to local staff. This is especially interesting in the context of lateral moves and employees from emerging countries. Common utility bills covered in full, or in part, by the company include , water, , , , and neighborhood garbage and security services.
Understand what value you bring to your position and be willing to negotiate for it. Medical: full may include spouse and children. Once you know what you want, it's time to negotiate. Dental care might not be included. Policies revisited One of the early consequences of the different types of expatriates coming from and going to emerging markets was that large employers found it increasingly difficult to have only one policy covering all international assignments. The event brochure is located. Many executives assume that the company will naturally provide an allowance that will allow you to maintain your current lifestyle abroad, including the level of housing provided.
Ask your company for an offshore retirement plan or an insured retirement program, Schlomann says. In the public sector, embassies also seem keen to continue their policies for full expatriate support. The event brochure is also available. These contracts are for people working abroad on a short contract of six months or less. To some extent, regionalization is accompanying globalization as an increasing number of moves resulting from globalization are lateral moves — that is, moves between emerging markets. Hardship Allowance It is designed to make up for different circumstances and hence difficulty combined with your new location.