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Expatriate Management (Best Practice Tips)

Anne morris.

• 11 April 2020

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Managing expatriates is a multi-stage process, where each stage can be crucial to the overall success of an overseas assignment for your business, as well as the individual assignee, on both a personal and professional basis.

The following guide looks at best practice for employers when deploying individuals overseas, including some important practical tips for expatriate management, from preparation through to repatriation.

Preparing expatriates for an overseas assignment

The management of overseas assignments can be a complex process for employers and HR personnel to get right, especially when trying to balance the cost of an assignment within the shifting demands of the global business environment against the individual needs of the expatriate.

By thoroughly preparing in advance of the assignment, and by properly investing in the necessary processes from the outset, you can help to minimise wasted expenditure and unnecessary costs at a later date. This can also help to avoid any loss of revenue, and even the potential loss of top global talent from within your organisation, resulting from a failed assignment.

The level of preparation required in the expatriate management process can vary depending on the nature and length of the overseas assignment, the location of the assignment, the number of assignees involved and the individual personal circumstances of each assignee.

In broad terms, however, your pre-assignment expatriate management process should include the following.

A comprehensive assessment of the nature and length of the overseas assignment needed to meet your business objectives, having regard to the flexibility offered by various different types of assignment, from business trips to permanent relocation. This process should also be carried out in the context of any prospective candidates, their level of experience and their personal circumstances. For the novice expatriate, the option of commuter and short-term assignments may be a sensible starting point.

The provision of an adequate compensation package to adequately incentivise prospective overseas assignees, attracting the best available candidates. This should include a suitable salary that matches or exceeds the typical salary that an employee would get paid in their home country for doing the same job, together with relocation costs and a cost of living allowance to reflect any additional daily expenditure in the host location.

Implement a thorough selection and vetting procedure for prospective assignees, ensuring they are suitably qualified and capable of undertaking the assignment in question. Each assignment will present its own unique challenges and demands, so you will need to match the right person to the job, having regard to the individual needs of the assignee in the context of the specific assignment and host location. This could include formal and informal assessments of their capabilities, career aspirations, physical and mental wellbeing, and whether they are emotionally equipped to withstand any cultural adjustment.

A full assessment of any travel and legal risks prior to deployment tailored to the specific assignment, the host destination and the individual assignee(s), ensuring that you fully research the country and region in which the assignee will be working. You should also keep abreast of any imminent changes that may affect the assignment or assignee prior to their deployment.

A pre-deployment programme of training and education for overseas assignees and their families, where applicable, about the host destination. This could include cross-cultural training and language classes, as well practical information about the region or city in terms of transport, education, recreation, healthcare services, and any safety and security issues. For those travelling to high-risk destinations this should also include security briefings and training on hostile environment awareness.

Supporting expatriates during an overseas assignment

Even with thorough preparation prior to the start of an overseas assignment and through to deployment, the provision of ongoing support for an expatriate during the lifecycle of their assignment can be key to its’ overall success.

A human-centric approach should be taken to expatriate management, where absent the right personal and professional support for your overseas assignees and their families whilst abroad, this could seriously affect the outcome.

The level of support required can again vary depending on the nature and length of the overseas assignment, its’ location t, the number of assignees involved and the personal circumstances of each assignee.

In broad terms, however, your active-assignment expatriate management process should include the following:

The provision of an ongoing benefit and support program to help assignees and their families integrate into their host destination. This could include local support, where you could consider outsourcing this role to a specialist who can help novice expats to settle into their new surroundings and signpost them to different services. You should also provide key HR contacts back home to address any personal or professional problems, or in the event of an emergency.

Ensure a positive employee experience, where psychological wellbeing and happiness while on an overseas assignment is strongly linked to expatriate success. This could include the use of informal introductions, employee-centric activities and social networking events on the assignee’s arrival in the host destination to help them integrate with their new work colleagues and other ex-pat families within your organisation.

Maintaining regular contact with your overseas assignees, ensuring effective coordination between management and HR, as well as any local support team in the host destination. Through clear communication you can help to pre-empt any problems that may lead to job dissatisfaction or difficulties with cultural integration. This can also help assignees to keep abreast of any workplace changes and not feel disconnected or isolated.

The provision of quality healthcare for maintaining the physical and mental health of your employees and their families. You should ensure that you opt for an international health insurance plan that offers the assistance and protection your assignee’s may need, including access to a 24-hour helpline that can be used to answer any medical or security questions, or facilitate the provision of emergency assistance, at a time when an assignee’s usual points of contact would not be available.

Remain fully informed of any risk factors that may impact on the assignment, where even relatively safe destinations can quickly become high-risk regions due to health, safety, security, political or social reasons. You should also be able to effectively communicate any such changes and important information to assignees working remotely, especially in relation to health and safety.

The effective use of technology, including data and analytics tools to make informed management decisions in respect of overseas assignments, from cost control to key performance indicators. Further, by providing overseas assignees with the right equipment and devices to do their job can help to maximise productivity, monitor their progress and even measure the assignee experience. This should include the provision of secure wireless networks, good connectivity and up-to-date software.

Making provision for expatriates following an overseas assignment

Having successfully completed an overseas assignment, this is not the end of the process for either you or the expatriate. The repatriation process, even though this is the last step in the expatriation lifecycle, can be just as challenging as the deployment process. In many cases this will involve a process of practical, mental and emotional readjustment for the assignee, as well as their families.

The level of support required for expatriates following an overseas assignment can vary depending on how long an assignee has spent abroad, the extent of any family ties back home and the nature of any role that they will be returning to.

In broad terms, however, your post-assignment expatriate management process should include the following:

The provision of an adequate repatriation package to adequately incentivise overseas assignees to return home to work for your organisation. This should include the potential for career progression or a suitably senior role to return to home to, ensuring that you retain your top talent and benefit from their overseas experience.

The provision of other initiatives to alleviate the risk of losing key employees, including a suitable relocation package following a long-term overseas assignment to enable an employee to easily move back to the UK. The issue of costs must always be balanced against the need to retain talent to ensure the continuity and success of your business for the future. Given their international experience, expatriates are open to being headhunted by your competitors, so the cost of financial incentives must be weighed against the risk of losing them altogether.

The use of debriefing interviews to capture lessons learned from the overseas assignment, making the most of any invaluable insight and new industry knowledge the assignee has gained from their experience abroad. This will help you to develop your business back in the UK and stay ahead of your competitors. This will also give you the opportunity to explore any career aspirations and potential options available to your assignee, as well as the possibility of any future overseas assignments.

Practical tips for effective expatriate management

Although statistically there can be a high failure rate for overseas assignments, the risk of an unsuccessful assignment can be minimised by applying the following practical tips to the expatriate management process:

• Carefully consider the assignment in the context of your business goals, including the nature of the assignment and number of assignees needed Offer adequate compensation packages to attract the best available candidates, including relocation and costs of living allowances.
• Implement a thorough selection and vetting procedure for prospective assignees, ensuring they are suitably qualified and capable of undertaking the assignment in question in the host destination.
• Thoroughly research the host destination for any travel and security risks, keeping abreast of any imminent changes that may affect the assignment or assignee.
• Thoroughly prepare your assignee for deployment through a programme of pre-deployment training, including their families where applicable Invest in an ongoing benefit and support program to help assignees and their families integrate into their host destination.
• Encourage a positive employee experience through the use of informal introductions with ex-pat families, employee-centric activities and social networking events on the assignee’s arrival in the host destination.
• Maintain regular contact with your overseas assignee to help pre-empt any problems and avoid any feelings of isolation.
• Remain up-to-date with any changes in the host destination that may affect the assignment or assignee.
• Provide adequate healthcare, including access to a 24-hour helpline and the provision of emergency assistance where needed.
• Provide adequate equipment and up-to-date ways of increasing productivity, monitoring performance and staying connected.
• Provide adequate repatriation packages to incentivise assignees to return to work for you, including the potential for career progression or a suitably senior role, as well as any necessary relocation package.
• Utilise debriefing interviews to capture lessons learned from the overseas assignment and explore potential career options available to the expatriate, including the possibility of further overseas assignments.

Need assistance?

Seeking expert advice in expatriate management is often money well spent. The cost of sending employees abroad can already be significant, but the risk of losing that investment through either a failed assignment or loss of the assignee altogether from within your organisation should be weighed in the balance.

Getting it right can result in an increase in revenue, the retention of talent and the ability to repeat the process successfully time and time again.

DavidsonMorris are employer solutions lawyers with specialist experience in global mobility and supporting businesses with their international workforce needs. For advice and help with your expat management, speak to us .

Expatriate  management  FAQs

What is expatriate in hrm.

Expatriate in Human Resource Management (HRM), commonly shortened to expat, is someone living in a country different to their own for the purposes of undertaking a short or long-term overseas work assignment. This can include employees sent to manage a new office or set up a new location.

How do you manage an expatriate employee?

Managing an expatriate employee is a multi-stage process, where each stage can be crucial to the overall success of an overseas assignment for both your business and the individual assignee. Effective expatriate management should run throughout the lifecycle of an assignment, from pre-deployment preparation through to repatriation when the employee returns back home.

How do you manage expatriate failure?

In instances where an expatriate is inadequately prepared for a short or long-term overseas assignment, or where the language and cultural differences cannot be overcome, this can often lead to early repatriation. By providing support on a personal and professional level both prior to, during and after the assignment, the risk of expatriate failure can be minimised.

Last updated: 11 April 2020

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator , and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

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Global Assignment Policies & Practices Survey Report

Insights on how global organizations administer their global mobility programs.

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For global mobility leaders of multinational organizations, benchmarking your global mobility policies and practices against those of other global organizations and industry peers can be a powerful tool for reflecting on your current approach and planning how to prepare your talent mobility program for the future. To help, KPMG International conducts this annual survey of global mobility policies and practices of multinational organizations. While the number of participants continues to grow, the resulting database is already believed to be one of the most robust of its kind on a global scale.

The data offers insights into global mobility programs and how they are evolving in terms of mobility, tax and immigration policies, structure, governance, priorities, performance measures, technology, robotics, automation, international remote working and more

Download the 2023 KPMG Global Assignment Policies and Practices Survey summary report and scroll down for more on this year's key findings.  

2023 KPMG Global Assignment Policies and Practices Survey

A look into how global mobility programs are evolving based on the survey results from over 100 multinational organizations in jurisdictions worldwide.

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What do the latest results tell us?

The results of this year’s Global Assignment Policies and Practices (GAPP) Survey sheds light on how global mobility programs are continually evolving. In addition to compliance and global risk management, supporting the organization’s business objectives, controlling program costs and being adaptable to changing business requirements are clearly the top priorities for today’s global mobility leaders. The global talent mobility function’s contribution to strategic value for the organization has taken priority; being recognized as a trusted advisor and collaborator to the business.

Many organizations are recalibrating their approach to flexible work arrangements, leaning towards requiring employees to be more present in the office. This shift represents a response to several factors, including the desire for more direct collaboration, and the cultivation of company culture. Businesses, however, must recognize that top professionals now prioritize flexibility and work-life balance. To remain competitive, organizations will need to blend the advantages of in-person collaboration with a continued commitment to accommodating the diverse needs and preferences of their workforce, all while striving to attract and retain the best talent in this ever-evolving employment environment.

Recognizing the importance of attracting, retaining, and developing top talent as a competitive advantage, the global mobility function plays a pivotal role in making this vision a reality. This alignment helps ensure the right people are in the right place at the right time, with the skills and expertise to drive the organization forward. By harmonizing global mobility with talent initiatives, companies can leverage international experience, facilitate career growth, and support the evolving needs of their workforce, ultimately contributing to sustained success and an agile response to the ever-changing demands of the global marketplace.

Global mobility functions continue to place a strong emphasis on technology due to its transformative impact on the way organizations manage their global workforce. In terms of global mobility, technology serves as an enabler, allowing companies to optimize the deployment of their talent on a global scale. By leveraging technology, global mobility functions can not only improve efficiency and cost-effectiveness but also enhance the overall employee experience, making it an indispensable tool for organizations seeking to navigate the complexities of global talent management while remaining agile, competitive, and compliant in the dynamic global landscape.

There has been a notable increase in the incorporation of inclusive language and a heightened awareness of accessibility concerns within mobility policy development. As organizations strive for greater diversity and inclusivity, it has become essential to ensure mobility policies address the unique needs of all employees. This shift underscores a commitment to providing equitable opportunities for all, irrespective of individual circumstances or identities. Organizations are recognizing that mobility policies must be accessible, accommodating, and free from bias, thereby fostering a more inclusive work environment.

There continues to be an ongoing trend of short-term cross-border mobility by companies. Short-term assignments, often lasting weeks or a few months, provide companies with a flexible solution to address specific projects, knowledge transfers, or market exploration without the long-term commitment of traditional expatriate assignments. This trend aligns with the evolving preferences of a mobile and diverse workforce, and as companies continue to prioritize agility and adaptability, short-term cross-border mobility is likely to remain a prominent feature of talent management strategy.

Benchmark your organization today!

KPMG’s Global Mobility Services practice members can provide a personalized benchmarking report allowing you to compare your organization across key areas of interest. Participants find this useful in evaluating their organizational policies against a specific set of parameters. In addition to key organizational demographics and global mobility policy overview, the survey questions follow an overarching framework of the key phases of an international assignment and transfer life cycle with additional relevant topical categories covering immigration compliance, assignment management technology leverage, automation and robotics and program data and analytics insights.

If you would like to participate in the KPMG GAPP Survey and receive a personalized benchmarking report, please click here . To learn more about how KPMG’s Mobility Consulting Services can help you build an operating model that serves and delivers for your organization, please send an email to [email protected] .

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Sustainable Expatriate Management: Rethinking International Assignments

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This article explores the concept of sustainable expatriate management, which incorporates environmental, social, and economic factors, and how it can be implemented in a corporate context. We argue that with increasing societal and environmental issues, it is crucial to revisit the overall global philosophy and policies, including the expatriate life cycle. We apply the UN Sustainable Development Goals (SDGs) framework to examine how businesses can remodel their practices to become more resilient. Furthermore, based on a systematic literature review, we identified gaps in research on the integration of environmental factors into sustainable expatriate management. Lastly, this article presents a model for understanding the three layers of sustainability in expatriate management, which can assist practitioners in identifying blind spots and material topics.

Introduction

According to Ghauri, Strange and Cooke (2021) , the global business environment has improved awareness of sustainability as a ‘new reality’. Furthermore, addressing the UN Sustainable Development Goals (SDGs) in a corporate context is becoming increasingly popular (Liou & Rao-Nicholson , 2021; Montiel , Cuervo-Cazurra , Park , Antolín-López , & Husted , 2021; van Tulder , Rodrigues , Mirza , & Sexsmith , 2021) . Although “sustainable” and “green” global mobility are widely discussed concepts, they have not yet been widely integrated into sustainable expatriate management.

However, due to its nature, expatriate management is exposed to various societal and environmental issues that are forcing the field to move towards more sustainability-oriented practices. This implies that decision- and policy-makers should revisit the overall global philosophy, including policies and practices. Therefore, stakeholders should reevaluate topics like business trip policies, health, and equality, as well as other facets of the international assignment cycle (Fan , Zhu , Huang , & Kumar , 2021) . Consequently, in this paper, we will outline how practitioners can rethink expatriate management using a sustainable development lens and how this shift in perspective provides fertile ground to redesign the expatriate life cycle.

Inspired by the “strong sustainability” or embedded systems view (Giddings , Hopwood , & O’Brien , 2002) , we define sustainable expatriate management as any employee-related cross-border (work) activity, which, by its design, considers planetary and societal boundaries and acknowledges the embeddedness of economic impacts within this larger framework (see Figure 1 for clarification).

Source: Own illustration based on Giddings et al. (2002) , p. 192.

Theoretical Framework: Sustainable Development Goals

According to Finaccord’s (2019) latest research, in 2017, there were 66.2 million expatriates working abroad globally, and forecasts for 2021 expect 87.5 million in total. Therefore, this topic affects a relatively large amount of people moving across borders. Nowadays, increasing environmental, social, and economic crises are challenging global business practices. According to the World Economic Forum Global Risks Report, the risks that are most likely and will have the most impact are predominantly environmental risks (e.g., climate action failure, human environmental damage, biodiversity loss, natural degradation, extreme weather, natural resources crises) (World Economic Forum , 2022) . These are expected to affect multinational enterprises’ (MNEs) activities on a global scale.

As the complex, or so-called wicked, problems of our time are interconnected, it is crucial to avoid a siloed perspective of these risk categories. Therefore, we provide a holistic, SDG-focused perspective that addresses the question of how MNEs’ business practices need to be remodeled to become more resilient. We view business sustainability in terms of environmental, social, and economic systems and consequently apply the UN Sustainable Development Goals “wedding cake” framework (Stockholm Resilience Centre , 2018) . This model implies that the environmental, social, and economic layers are interdependent, as well as their respective sublevel SDGs, as indicated in Figure 2 .

Source: Own illustration based on Stockholm Resilience Centre , 2018

Based on Figure 2 , the biosphere/environment represents the foundation of economies and societies and, therefore, the general context in which all other SDGs must be placed. Society cannot survive without the environment, which is why society must pay attention to resources and the preservation of habitats. Such a conceptualization adopts an integrated and interconnected view of social, economic, and ecological development to ensure the future viability of the planet and its living species.

Three Layers of Sustainability in Expatriate Management: Identifying Blind Spots

Based on a systematic literature review of 238 articles clustered according to the 17 Sustainable Development Goals and their respective layers, environment/biosphere, society, and economy, it is evident that research in this field has been increasing in recent years. Furthermore, it shows that the expatriate management literature is dominated by social issues (80%), followed by economic literature (19%), and work that focuses on the environment/biosphere (1%) (Ommen , Schmitz , & Karlshaus , 2022) . Considering that expatriate management is a part of international HRM literature, it is unsurprising that the social category dominates; however given the growing importance of the climate crisis discourse, it is surprising that this has not yet been addressed in research and practice.

This social literature is dominated by articles addressing SDG 5 “Gender Equality” and SDG 3 “Good Health and Well-being” as well as limited literature focused on SDG 16 “Peace, Justice, Strong Institutions”. In the economic category, the literature most often addresses SDG 10 “Reduced Inequalities” and SDG 8 “Decent Work and Economic Growth”, followed by SDG 17 “Partnership for the Goals” as an overarching category. Finally, the ecological category is only represented in one article addressing SDG 13 “Climate Action”, which has only recently been published (Ommen et al. , 2022) (see Table 1 for an overview).

Source: Own illustration; for a full list of references, see Ommen et al. , 2022 , and the Appendix to the article. *“–” indicates SDG cases for which blind spots were not identified in this study

What Is Material for Sustainability in Expatriate Management?

In the sustainability reporting discourse, understanding materiality (i.e., identifying elements of utmost importance to a company’s sustainability challenges) has become increasingly important as part of the international ESG factors: environment, society, and governance. Furthermore, organizations attribute different levels of importance to specific environmental or social factors based on the sectors they operate in.

Considering the essential or material topics, MNEs need to first reduce or avoid their negative impacts (e.g., CO 2 emissions etc.) and also increase their positive impacts (e.g., fostering intercultural ties). By doing so, MNEs can significantly reduce the respective risks to which they are exposed.

The emission of greenhouse gases (GHG) is among expatriate management’s negative material environmental impacts, due to flights, shipments, hotel stays, and local transportation (SDG 13). These also include water and land use due to construction activities (SDG 6, 15), and waste management that should be reconsidered from an environmental perspective.

From a social perspective, negative impacts on equal opportunities can be caused by disparities in pay and promotion opportunities (SDG 5), working conditions, and health issues related to increasing travel activities and continuous readjustment (SDG 3). Furthermore, expatriates working in hostile environments or dangerous locations need adequate protection mechanisms and respective codes of conduct (SDG 16). Finally, integration into local communities during long-term stays might become relevant for some expatriates and their families (SDG 11).

From an economic perspective, a positive impact could be generated by supporting the local economy (SDG 8). However, negative impacts can arise through unequal opportunities because of the different treatment of expatriates and locals (SDG 10). To reduce this, companies should ensure responsible local consumption and circular use of respective household appliances or furniture in apartments (SDG 12).

In sum, MNEs should consider the following Sustainable Development Goals to reduce their negative impact and increase their positive impact:

Environmental : SDG 13 Climate Action

Social : SDG 3 Good Health and Well-being, SDG 5 Gender Equality, SDG 16 Peace, Justice and Strong Institutions, SDG 11 Sustainable Cities and Communities

Economic : SDG 8 Decent Work and Economic Growth, SDG 10 Reduced Inequalities, SDG 12 Responsible Consumption and Production

Sustainable Expatriate Management: Actionable Recommendations

The above discussion suggests that companies can derive a specific prioritized agenda. Inspired by the SDG Compass (Global Reporting Initiative , United Nations Global Compact , & WBCSD , 2015) , we advance these considerations by sharing how MNEs can best address the SDGs in sustainable expatriate management. For an overview of selected ideas for each of the SDGs, please also see Table 2 .

Source: Own illustration; based on selected measures of the SDG Compass Business Indicators; Note: Not all themes will apply to all types of MNEs or all sectors equally. As expatriates are usually relatively privileged, we suggest that they should use their privileged status to support disadvantaged groups and individuals to meet SDGs.

Defining Priorities

First, each of the material topics needs to be evaluated for each company. Certain topics may be more or less relevant in a corporate context, depending on the respective sector. Taking the example of GHG emissions (SDG 13), most emissions come from consultants on regular short-term assignments or business commuting trips if the company is in the service delivery sector. Therefore, these emissions play a more significant role for the company.

In terms of gender equality (SDG 5), a company should first investigate the share of women in their overall assignee population, including management positions. Based on a materiality matrix approach, respective stakeholders should evaluate their priorities alongside considering the judgment of material topics to attain a holistic perspective. By taking this approach for all topics associated with each SDG, MNEs can prioritize different materiality topics.

Setting Strategic Goals

To transform international assignments at the company level, MNEs need strategic concepts, including tools, to impact the defined materiality topics discussed above. There are different levers available to create change, including international assignment policy, processes, and culture. A policy can be designed so that assignees are nudged to not take air shipments, which cause significant GHG emissions (SDG 13). Further, by working with stakeholders across the supply chain, MNEs should implement key performance indicators (KPIs) to reduce negative impacts. To be effective, these should align with scientific facts and goals, such as the Paris Agreement’s target of limiting warming to 1.5°C.

Integrating the Goals

After defining their strategy and goals, MNEs should next address their implementation needs. This should particularly consider the sustainable consumption of mobility-related benefits (SDG 12), where there may need to be a mindset shift. Therefore, in the preparation phase, assignees need to be made aware of their choices. To do this effectively, departments taking care of international assignments may need to be trained on related topics while they consult assignees. Besides policy changes, MNEs should also implement profound changes, for example in terms of gender equality (SDG 5). Managers should be aware of equal selection principles and provide women with support mechanisms to ensure equity if they become the main caregiver for their children.

Measuring and Evaluating

Finally, MNEs need to track whether the implemented measures have been effective. This means measuring an international assignment program’s GHG emissions (SDG 13), environmental impact, gender share (SDG 5), and other measures. If the result does not meet the initial targets, the previous phases (strategy development, implementation) should be analyzed to see if adjustments are necessary. To better integrate the respective measurement indicators with those already existing in the corporate context, the SDG Compass website provides respective input categorized by SDG: https://sdgcompass.org/business-indicators/ .

Although there is awareness of pressing contemporary challenges in the field of expatriate management, action is still needed to decrease the negative impact on society, the economy, and the environment. Many concepts aim to address sustainability across borders. However, research has not yet produced a hands-on and integrated SDG framework for expatriate management. In this work, we aim to inspire and motivate practitioners to take action and further their sustainability ambitions. Although our paper is labeled rethinking expatriate management, the challenges outlined equally apply to inpatriates, repatriates, and other forms of cross-border assignments.

Companies need to be more aware of the environmental and social impacts of their programs and need to monitor processes to increase transparency across their vast service portfolios and associated supply chains. This is not only necessary because of sustainability but also to comply with legislative requirements (e.g., EU Taxonomy). However, corporate departments dealing with international assignments are not facing these challenges alone. They need to form partnerships (SDG 17) and collaborate with their vendors and internal stakeholders (enabling functions, corporate sustainability, procurements, etc.) to drive the much-needed change toward sustainable development.

About the Authors

Marina A. Schmitz serves as a Researcher and Lecturer at the Coca-Cola Chair of Sustainable Development at IEDC-Bled School of Management in Bled, Slovenia as well as CSR Expert/Senior Consultant at Polymundo AG in Heilbronn, Germany. She has worked as a Lecturer, Research Associate, and Project Manager at the Center for Advanced Sustainable Management (CASM) at the CBS International Business School in Cologne and the Chair of HRM and Asian Business at University of Goettingen. Enno Ommen is working in Bayer AG’s Sustainability Excellence Office at CropScience Division. He had previously worked in the area of Global Mobility for about 10 years, which equipped him with profound knowledge in the field of expatriate management. He studied International Business (BA) at CBS International Business School and International Human Resource Management (MSc) at Manchester Business School. Further, as one of Bayer AG’s Sustainability Champions, Enno is supporting the sustainable transformation of the company. Anja Karlshaus studied at the University of Cologne, Santa Clara University (USA), and the European Business School. In 2009, she took over the HRM professorship at CBS International Business School, later assumed the role of dean of the Business Administration faculty, before being appointed president. Moreover, she was previously employed at Dresdner Bank, Allianz and Commerzbank – being now member of various committees (Chamber of Industry and Commerce, City of Cologne, State of NRW). She researches sustainability, diversity, and agile HR.

Submitted : September 30, 2022 EDT

Accepted : April 06, 2023 EDT

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Journal of Global Mobility , 5(4): 342–347. Posthuma, R. A., Ramsey, J. R., Flores, G. L., Maertz, C., & Ahmed, R. O. 2019. A risk management model for research on expatriates in hostile work environments. The International Journal of Human Resource Management , 30(11): 1822–1838. Stoermer, S., Davies, S. E., Bahrisch, O., & Portniagin, F. 2017. For sensation’s sake: differences in female and male expatriates’ relocation willingness to dangerous countries based on sensation seeking. Journal of Global Mobility , 5(4): 374–390. Toh, S. M., & Denisi, A. S. 2005. A local perspective to expatriate success. Academy of Management Perspectives , 19(1): 132–146. van Bakel, M. 2019. It takes two to tango: a review of the empirical research on expatriate-local interactions. The International Journal of Human Resource Management , 30(21): 2993–3025. Walsh, P. R., Dodds, R., Priskin, J., Day, J., & Belozerova, O. 2021. The Corporate Responsibility Paradox: A Multi-National Investigation of Business Traveller Attitudes and Their Sustainable Travel Behaviour. Sustainability , 13(8): 4343. Wilkinson, A., Knoll, M., Mowbray, P. K., & Dundon, T. 2021. New Trajectories in Worker Voice: Integrating and Applying Contemporary Challenges in the Organization of Work. British Journal of Management , 32(3): 693–707. Wu, T.-Y., Liu, Y.-F., Hua, C.-Y., Lo, H.-C., & Yeh, Y.-J. 2020. Too unsafe to voice? Authoritarian leadership and employee voice in Chinese organizations. Asia Pacific Journal of Human Resources , 58(4): 527–554.

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Designing Global Compensation Systems

An international assignment compensation system has to finely balance adequately rewarding and motivating expatriates while keeping costs under control for corporate headquarters. The cost of a three-year international assignment can easily exceed $3 million.

Because of the enormous investment, developing a comprehensive global compensation system for expatriates is one of the most critical challenges facing global human resource management.

Developing a Compensation Philosophy and Strategy

Companies with multinational operations need to develop compensation plans for employees that are in line with their global business strategy. Companies that articulate a clear global pay philosophy and develop corresponding compensation programs are best positioned to effectively execute their strategy. An effective global compensation strategy creates consistency in pay management and facilitates global employee mobility. See Viewpoint: Cross-Border Considerations for International Executives .

Establishing guidelines and practices with consistent communication of key messages is vital to the success of the compensation program.

Although multinational employers are striving to globalize their compensation practices, local and regional approaches to international pay are still most common.

Approaches to Global Compensation

International assignment compensation has many moving parts and is difficult to standardize. Many factors affect the compensation of a particular expatriate, including assignment type and length, location, family needs (if any), and benefits. The main compensation items for expatriates involve base pay, cost-of-living adjustments, housing allowances, home leave, education assistance for dependents and premium pay. See How Should We Compensate an Employee on a Foreign Assignment?

The U.S. Department of State indexes the living costs abroad, quarters allowances, hardship differentials and hazard pay allowances. The information, published quarterly, is used by many organizations to assist in establishing private compensation systems. See Salaries, Cost of Living and Relocation .

While the U.S. Fair Labor Standards Act does not apply to employees working outside of the U.S., employers must be familiar with the host country's labor laws.

Do U.S. employment laws apply to U.S. citizens working abroad?

The New UAE Labor Law—What You Need to Know

Multinationals Strive to Meet Stringent Pay Equity Requirements

Compensation Plan Elements

A global compensation plan includes elements typical of any rewards strategy along with a few extra incentives and allowances, depending on the host country.

When an employee accepts an international assignment, it is up to the employer to determine the base rate of pay (referred to as the base salary). The base salary is normally related to pay ranges in the home country, which then may be adjusted based on local variances (i.e., fluctuations in the economy). Companies take one of the following approaches to establish base salaries for expatriates:

• The home-country-based approach. The objective of a home-based compensation program is to equalize the employee to a standard of living enjoyed in his or her home country. Under this system, the employee's base salary is broken down into four general categories: taxes, housing, goods and services, and discretionary income.
• The host-country-based approach. With this approach, the expatriate employee's compensation is based on local national rates. Many companies continue to cover the employee in its defined contribution or defined benefit pension schemes and provide housing allowances.
• The headquarters-based approach. This approach assumes that all assignees, regardless of location, are in one country (i.e., a U.S. company pays all assignees a U.S.-based salary, regardless of geography).
• Balance sheet approach. In this scenario, the compensation is calculated using the home-country-based approach with all allowances, deductions and reimbursements. After the net salary has been determined, it is then converted to the host country's currency. Since one of the primary goals of an international compensation management program is to maintain the expatriate's current standard of living, developing an equitable and functional compensation plan that combines balance and flexibility is extremely challenging for multinational companies. To this end, many companies adopt a balance sheet approach. This approach guarantees that employees in international assignments maintain the same standard of living they enjoyed in their home country. A worksheet lists the costs of major expenses in the home and host countries, and any differences are used to increase or decrease the compensation to keep it in balance.

Some companies also allow expatriates to split payment of their salaries between the host country's and the home country's currencies. The expatriate receives money in the host country's currency for expenses but keeps a percentage of it in the home country currency to safeguard against wild currency fluctuations in either country.

Variable/incentive compensation

The globalization of business has increased the use of variable and incentive pay around the world. But some cultures do not readily accept the practice of linking pay to individual or group performance. Other roadblocks to pay for performance include financial (not enough funding of the pool), target setting (defining performance parameters) and pay equity. Yet when it is done right, pay for performance effectively allocates limited rewards and retains top performers. As such, variable pay has become an increasingly important compensation element in many countries.

Variable pay plans generally fall into one of two categories:

• Short-term incentive plans are usually annual plans that link awards based on meeting individual or group performance criteria and objectives. Unlike long-term plans, these incentive pay plans provide for the payout to be awarded yearly.
• Long-term incentive plans, on the other hand, can vary in length from three to five years. These plans typically include equity-based incentives, such as stock options, restricted share grants and other types of equity-based plans like phantom stocks or stock appreciation rights. Awards are closely linked to the achievement of company goals and objectives over the three- to five-year period.

Participation and eligibility for each type of plan, as well as the level of incentives and average payouts, vary greatly among different companies, industries and countries around the world.

Premiums and allowances

Premiums and allowances are added to the base salary so expatriate employees can maintain their standard of living. Those add-ons are removed when the employee repatriates. Some types of premiums and allowances are as follows:

• Hardship and hazard/danger pay. Employers sometimes need to send employees on assignments to host countries where conditions are difficult or hazardous (i.e., remote locations or countries with high rates of violence). As a result, a hardship allowance may be granted as an additional incentive to compensate employees for accepting assignments in less-than-desirable countries. Premiums typically range from 10 percent to 50 percent of base pay, depending on the severity of the hardship. For assignments in developing countries that have a history of violence or are experiencing political unrest, expatriates often receive some form of hazard pay, such as an additional 25 percent of their base salary. See Hazardous Duty Pay Policy: By Position and Location .
• Cost-of-living adjustments. A cost-of-living adjustment is an increase or decrease of an expatriate employee's pay in response to fluctuations in the economy, such as inflation or deflation. To prevent attrition of the global employee's purchasing power, companies often raise the employee's base salary to keep up with inflation. When price levels drop, companies may also decrease the base salary accordingly.
• Educational assistance. Educational assistance for dependents of expatriate employees varies based on conditions in the host country. Assistance is usually not provided if local educational institutions are deemed adequate. When the educational system of the host country is substandard, employers may use a variety of benefits, such as employers operating a school in the foreign country; paying for dependents' educational expenses, including room and board, to attend schools in the United States; or providing an allowance for attendance at private schools in either the United States or the host country. Other employers may simply choose to pay employees a specified amount (stipend) considered necessary for schooling at the nearest adequate school, and the employees make up any difference to send their dependents to an institution of their choice.
• Housing assistance. Assistance for housing is usually provided either in the form of free company-owned housing or via a housing allowance that is typically equal to the difference in housing costs between the home and host countries or based on a specified percentage of an employee's base salary. Housing allowance rates are usually calculated based on either a single person or a two-person household. For employees with larger families living with them, employers may provide an additional supplement, typically ranging from 10 percent to 30 percent of the two-person allowance.
• Home leave. The objective of home leave policies is to give the assignee and his or her family the opportunity to maintain personal and business relationships and remain abreast of any economic, political, social or cultural changes in the home country. Although home leave policies vary among multinational corporations, most policies grant leave based on the employee's level within the organizational structure. Executives, managers and more senior-level professionals are most often granted home leave once a year, or once every other year for a duration of up to four weeks, and lower-level employees may be allowed only a single visit during the course of their assignment. Companies that provide home leave allowances generally purchase or reimburse the employee for any travel-related expenses, such as airline tickets for the employee, spouse or partner and any dependent children younger than college age.

Compensating Third-Country Nationals

Third-country nationals (TCNs) are employees who are not from the home country or the host country. TCNs have traditionally been technical or professional employees hired for short-term employment and are often considered international freelance employees. See What are the differences among a local national, an expatriate, a third-country national, and an inpatriate?

In the case of TCNs, multinational companies have one of three options regarding compensation:

• Pay the TCNs as if they were local nationals.
• Treat them as any other U.S. citizen would be treated.
• Establish an arrangement based primarily on the third country's existing pay ranges.

The option a company chooses depends primarily on how these employees were hired into the organization or how they obtained the international assignment. The most common practices include the following:

• If the company is hiring locally in the host country, a TCN who applies for a job (including a professional or managerial position) may be assumed to be applying under the terms being offered. In this case, unless the TCN was specifically targeted and individually recruited for the position, he or she would most likely be offered the same compensation package provided to other local nationals.
• If a TCN who is already employed by the company transferred or reassigned from another country, the compensation arrangement usually depends on the individual's particular career pattern. TCNs who occupy positions that involve regular transfers or reassignments are most likely to be compensated on the same basis as any one of their U.S. counterparts who are also subject to frequent transfers. This approach, however, may require that these employees be paid based on U.S. salary ranges that are adjusted to support differences in locations each time a transfer occurs.

Global benefits for expatriates can be complicated for HR professionals to navigate, given the myriad national health care and pension systems and the laws governing foreign residents. See Do we have to offer the same benefits to our employees who work in other countries as to the employees working in the United States?

Health care plans

Health care coverage can pose significant challenges for expatriate employees because not all U.S. health care plans provide coverage for employees residing abroad. For this reason, the practice of providing health care benefits varies greatly among multinational companies. Multinational companies can provide coverage to employees in one of the following ways:

• Include the assignee in an international health care plan.
• Continue coverage under the U.S. health care plan.
• Provide coverage for the employee through a host country health care plan.

Retirement plans

Regardless of the compensation approach a multinational company chooses to adopt, most companies commonly provide assignees with the same level of Social Security and pension plan benefit coverage, without any interruption in service, as enjoyed by other employees in the home country location.

Some countries require expatriate employees to participate in their social security or other government welfare benefit schemes. In this case, many companies provide for reimbursement of any payments made to the host country's government scheme.

Spousal/partner assistance

Since approximately half of all U.S. marriages are dual-earner partnerships, dealing with international assignments can pose significant challenges for the trailing spouse or partner, the expatriate employee and the sponsoring organization.

Trailing spouses face many challenges to finding suitable employment in the host country, including language and legal barriers as well as differences in educational, professional or licensing requirements.

Assistance with job searches, visas or work permits, career and educational counseling, and resume writing are just a few examples of the types of assistance a multinational employer can provide spouses or partners of transferring employees. A less common approach is to offer a financial sum to spouses of expatriate employees for any loss of income resulting from the relocation.

Other add-ons that are less commonly offered but can significantly ease expatriate package negotiations include cultural competence training, language training and repatriation assistance.

Cross-cultural training

The purpose of these programs is to enhance the knowledge and awareness about the employee's new location and the cultural differences affecting communication, behaviors and viewpoints. Training programs typically last a few days; however, for assignments to more remote or difficult locations, programs may also include security training that lasts for a longer period of time. The length and type of training should be directly related to the perceived level of assignment difficulty or differences in the assignment country.

Employers may conduct training either as an individual program for a single transferring employee and his or her family or as a group program when a number of employees are transferring to the same location within the same general time frame. However, it is advisable when conducting group training to also provide individuals with one-on-one time with the trainer to discuss any specific issues related to the employee's job responsibilities or to address any other more personal concerns or issues. See Helping Expatriate Employees Deal with Culture Shock .

Language training

The inability to communicate can create a sense of vulnerability and loss of control. A basic knowledge of the language empowers expatriate employees to build critical relationships with host country nationals. Some jurisdictions require that employee communications be in the local language.  

Most companies provide some form of language training for expatriate employees assigned to countries where they are nonnative speakers. Training program options include the following:

• Intensive total immersion courses.
• Cross-cultural training with integrated language instruction.
• Private tutoring or coaching.
• Group language classes.
• Use of language software or audiovisual applications.

Repatriation/reassignment

Expatriate pay considerations do not end when the assignment ends. Pay can be a significant factor in making it difficult for a person to repatriate. Often employees returning home realize they made considerably more money with a lower cost of living in the host country; returning to the home country means a cut in pay and standard of living. If the foreign compensation package is disproportionate, an expatriate can suffer financial issues upon repatriation or reassignment to the home or other foreign country. Expatriate families and employees benefit from repatriation training to help readjust to living in the home country and returning to the original work environment. The length of the training often depends on the length of the assignment and the ages of the employees' children. See Managing International Assignments .

Similarly, if the leading motivator of the expatriate employee is the long-term career aspect, the company needs to provide a challenging assignment upon return to the home office or shortly thereafter. If this is not feasible, communication about future plans for such an assignment and the timing should come from a mentor or a member of the senior management team. Otherwise, the company may risk losing its entire investment to turnover of returning expatriate employees.

Tax Compliance

United States citizens and resident aliens are taxed on their worldwide income, whether the person lives inside or outside the United States. Multinational companies take one of four approaches to ensure tax compliance:

• Employees are responsible for their own taxes.
• The employer determines tax reimbursement on a case-by-case basis.
• The employer pays the difference between taxes paid in the United States and the host country.
• The employer withholds U.S. taxes and pays foreign taxes.

See How do we handle income taxes for expatriates?

Qualifying U.S. citizens and resident aliens who live and work abroad may be able to exclude from their income all or part of their foreign salary or wages, or amounts received as compensation for their personal services. In addition, they may also qualify to exclude or deduct certain foreign housing costs.

The foreign earned income exclusion allows an expatriate's annual employment earnings income (up to a cap that is adjusted each year for inflation) to be exempt from U.S. gross. The foreign housing exclusion provides for the amount of housing expenses in excess of U.S. norms to be excluded from taxable income. A foreign tax credit of the amount of foreign tax imposed on overseas earnings can be used to offset the amount of U.S. tax otherwise due by the U.S. citizen or resident.

A common misconception that contributes to the international tax gap is that this potentially excludable foreign earned income is exempt income not reportable on a U.S. tax return. In fact, only a qualifying individual with qualifying income may elect to exclude foreign-earned income, and this exclusion applies only if a tax return is filed and the income is reported. 

U.S. income tax is calculated on foreign-source income and translated to U.S. dollars at the time of receipt. Blocked currency, which is foreign income that is not readily convertible into U.S. dollars, does not constitute taxable income and may generally be deferred until the currency is convertible into U.S. dollars or is used for nondeductible personal expenses. Withholding of U.S. income tax is not required if the employer is required to withhold the host country's income tax.

The U.S. Social Security tax is mandatory if services are performed by a U.S. citizen or resident, and if the employment is for a U.S. employer or for an affiliate of a U.S. company with a 3121(l) agreement. An entity is an affiliate if the U.S. company owns at least a 10 percent interest in the voting stock or profits of the entity. However, employees performing services for an international organization are exempt from FICA, FUTA and federal income tax withholding because services rendered for international organizations do not constitute employment, and remuneration for services rendered to international organizations does not constitute taxable income. Organizations that qualify as international organizations are those that have been designated as such by the president of the United States. The exemption applies to citizens and residents of the United States as well as to nonresident aliens. 

Although foreign tax rules vary significantly by location, local taxing authorities also reserve the right to impose taxes on any income earned by the expatriate employee in the host country.

Equalization, reduction and totalization agreements

To prevent an expatriate employee from suffering excess taxation of income by both the U.S. and host countries, many multinational companies implement either a tax equalization or a tax reduction policy for employees on international assignments.

A tax equalization policy is an agreement between the employer and the employee to reduce the employee's wages, for which the employer agrees to assume the obligation for the worldwide tax liabilities of the employee. Equalization is accomplished by the use of a hypothetical tax. The hypothetical tax is calculated as if the employee had never left the United States, and it represents the employee's normal or expected tax liability for U.S. income.

Tax equalization is implemented by the use of advances to the employee; proceeds of the advance go to the tax authorities on the employee's behalf. These advances are settled at year end. The result is deferred compensation to the employee, which the host country does not tax.

Under a tax reduction policy, expatriates gain from the differences in income taxes in the United States and the foreign country to which they are assigned, or the compensation of expatriates is adjusted so they experience no loss in income as a result of the net effect of income taxes, both foreign and U.S.

Additionally, the United States government has Totalization Agreements in effect with several countries. These agreements eliminate dual coverage of employees by both the home and host countries. U.S. International Social Security Agreements coordinate with comparable programs in other countries. These agreements assign coverage according to objective rules, provide for no individual coverage elections and require that the employee remains covered by the home country and is exempt in the host country. The expatriate assignment must be for a period of five years or less, and the employee must remain an active employee of the sending employer.

All agreements exempt expatriates from the host country's version of the U.S. Old Age, Survivors, Disability and Health Insurance (OASDHI) program. Some agreements also exempt them from other foreign benefits, such as health insurance, unemployment insurance, workers' compensation, family allowances, cash sickness benefits and maternity benefits.  

Tax treaties

The United States has income tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate or are exempt from U.S. income taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income. Treaty provisions generally are reciprocal in that they apply to both treaty countries. Therefore, a U.S. citizen or resident who receives income from a treaty country and who is subject to taxes imposed by foreign countries may be entitled to certain credits, deductions, exemptions and reductions in the rate of taxes of those foreign countries. Treaty benefits generally are available to residents of the United States. They generally are not available to U.S. citizens who reside outside the United States. However, certain treaty benefits and safeguards, such as nondiscrimination provisions, are available to U.S. citizens residing in the treaty countries. See Tax Guide for U.S. Citizens and Resident Aliens Abroad .

State taxes

Many states impose taxes on the foreign income of expatriate employees who maintain a home in that state. In addition, states also may impose unemployment insurance taxes on employers that have employees with homes in that state. The reasoning is that, like other resident citizens, the employee derives certain benefits from the state, and the state where the employee resides is the most plausible place for an unemployed worker to seek unemployment compensation.

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Expatriate Management Policy Trends

Three of the biggest trends in global expatriate management are the rise of 'global nomads' and third-country nationals, more carefully-thought-through mobility policies and a growing link between international mobility and talent management. Indeed, the best organisations are finding that the more they integrate their mobility and talent management strategies, the less vexing some of the traditional problems of expatriate management – retention, localisation, repatriation and so on – become. Mobility experts from four leading international companies – AstraZeneca, Tetra Pak, Volkswagen and DHL – shared their own experiences of adapting their organisations' mobility policies to a more global world at Mercer's 15th Expatriate Management Forum in Prague earlier this year.

In a world where emerging countries are becoming increasingly important markets, one of the challenges all these companies are facing is providing expatriate packages that are both appropriate for the local market and consistent with the global policy. The challenge is compounded by the growth in 'third country nationals' – assignees of a different nationality from both the destination and sending country.

Helen Walton, director of global mobility at AstraZeneca, tries to reconcile the global and local by means of a Total Reward strategy, which allows her to emphasise different elements of the package according to different economic and cultural requirements. However, she says, people still tend to consider just one element of their reward – base salary – rather than looking at the totality, when comparing their package with that of other assignees.

She explains: "We take a home-based approach to reward In some regions, such as Latin America, reward is delivered as 'today' money, with high base salaries, particularly at senior levels, rather than pension schemes and other longer-term benefits. In more established markets, particularly those in the West, there is a broader range of benefits, and base pay will typically be lower. I don't think people yet fully understand the concept of Total Reward and it behoves HR and mobility specialists, therefore, to continue to educate everyone about the need to take account of the whole package in order to see its real value."

Deanna Rasmussen, head of global mobility in the supply chain business of DHL, experiences similar frustrations. Despite a global reward strategy and policy, "regional differences come up in discussions every year, particularly in Latin America, where inflation is high." The solution, she believes, is to handle some of the discrepancies at local level.

Marcellus Puig, head of global assignments – Americas and Africa region – and of global mobility policy at Volkswagen, says that the combination of fast-moving global nomads and inflation in developing economies leads to spiralling pay. What's more, he adds, the rising population of global nomads begs the crucial question: "Where is home now?"

Tetra Pak has sought to resolve the problem by establishing a 'global employment company' called Tetra Pak Global Resources, and most employees who go on assignment, whether to Germany or Botswana, has a contract from that company. Their ' base salary is a blend of the company's top seven markets, and the base salary structure and target incentive is the same for everyone, although the incentive does vary depending on the level and location. They also receive an offshore pension. "That gives us a common basis for the expats, and the philosophy behind it is that they will always know what they will be earning," says Adrian Moule, director of the global mobility centre of expertise at Tetra Pak. "But we then give them location allowances, cost of living adjustments and so on, on top."

Policies have evolved over the past two years, partly as a result of the recent global economic and financial crisis. Companies have made them clearer, they allocate costs differently and they are ensuring that policies are fit for purpose in an increasingly global world.

Rasmussen, for instance, has developed a global repatriation policy for the supply chain business at DHL – "because that was what the business needed." Puig at VW has found himself in the unusual position of rejecting a suggestion by the board that the mobility packages should be more generous. "They are good as they are," he says, adding that yearly benchmarking exercises in every market are essential in order to ensure you are competitive. And Moule at Tetra Pak has introduced a new short-term assignment policy and a repatriation policy. "We found people weren't being treated equitably, and I'm a great believer in equity," he says. "Whether you've been to Botswana or Germany, when you come back home you should be treated the same as everyone else."

Perhaps one of the most significant changes has been the introduction by AstraZeneca of a 'global opportunities policy', aimed particularly at global emerging talent.

Walton explains: "We maintained our home-based balance sheet approach, but we have no incentive allowances and we don't give allowances on the basis of 'hardship' or 'location'. The Baby Boomer/Generation X view of hardship is very different from that of Generation Y and Millennials: they go to places like Shanghai or South Africa because they see them as interesting developmental moves."

What's more, she continues: "Among this group of people, if one person doesn't want to take the role we will make it available to someone else. Among the more traditional senior executive expats, the thinking has tended to be that only one particular person could possibly do the job – and it's that that leads to 'discussions' about allowances and how much you are prepared to spend."

Localisation is an issue that still exercises many companies, and opinion seems to be polarised as to whether to phase out existing packages or to make abrupt switches. Phasing out can be prohibitively complex in terms of administration. Tetra Pak rejected that approach in favour of rolling one year of benefits into a lump sum and paying assignees half of it in the first month of localisation and the second half of it a year later.

The pension issue complicates localisation further still. Most companies take people out of the international pension plan (IPP) when they localise them – which creates understandable tension, although some provide an 'end-of-service' benefit that might, arguably, compensate for the loss in pension. As far as possible, AstraZeneca tries to keep assignees on their home pension plans, using an IPP only for its globally mobile group where there is no alternative.

But the more assignees fall into the global nomad category, the less of an issue localisation becomes. What's more, argues Walton, the more companies use international assignments to develop their global talent, the less they need to either localise or repatriate assignees, because assignments are part of a well-structured development plan. Indeed, the problems inherent in repatriation and localisation could be resolved through more tightly managed mobility policies, she believes, explaining: "Assignments should be for a fixed period of time to do a specific job, and when you lose sight of that you run into trouble."

There has been much talk of segmentation over the past two years, but segmentation is only effective, claims Walton, when combined with strong talent management.

"As our organisation has got better at identifying and managing talent, and focused more on budgets, we have had a more educated conversation about who to offer assignments to, and who not, and the appropriate packages for them. The global opportunities package that we introduced about a year ago was aimed primarily at finance and operations, who had graduate programmes, but it has also been taken up by our commercial organisation for their emerging talent. They are having those conversations now that one or two years ago they wouldn't have been having. So while we made the policy available, the pull has actually come from the organisation."

However, continues Walton, the mobility team's challenge is to ensure that the organisation uses the policies consistently and appropriately – and that sometimes involves encouraging the business to adopt more generous packages than it think it needs to. "It's about striking the balance between cost and talent management needs," she says.

Moule too stresses the need to balance the value to the business of the individual and the value to the individual of the assignment. "We have lots of assignees who are valuable to the business but are getting no personal development out of it. They are basically doing the same job, but just rotating around different countries. We really want to give the best packages to those people who are high value and developing at the same time."

The convergence of talent management and mobility policies allows mobility experts to be much more effective strategic business partners to the organisation, points out Puig. "Volkswagen recruited its first director of talent management about a year ago and I am now starting to work with the HR VPs in our different business streams and getting much more involved in those talent conversations. Unless you can do that you are purely transactional. Indeed, the more you understand what is happening in the business as a whole, the more effectively you can tailor your policies."

Given the increasingly strategic role mobility experts are playing in the ever more complex global talent management arena, it's not surprising that these leading companies believe that the level of expertise required militates against outsourcing. The trend instead is to concentrate mobility expertise in centres of expertise – and, in VW's case, for example, to establish regional hubs. And as markets expand further and the number of third-party nationals continues to rise, flexibility and agility in global talent management will become increasingly important bywords.

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International management strategies and expatriate practices of Taiwanese multinational corporations: a contingency perspective

• Original Article
• Published: 24 April 2020
• Volume 21 , pages 129–153, ( 2022 )

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• Chun-Hsiao Wang   ORCID: orcid.org/0000-0002-8581-7604 1 &
• Arup Varma 2  

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In this paper, we examine how the international management strategy (centralized, local, and global) of an MNC affects its expatriate practices, and whether there is a contingent framework between international management strategy and expatriate practices. Drawing on a sample of 126 large Taiwanese multinational corporations, we examine the effects of international management strategies on six expatriate practices—staffing policies, selection criteria, selection methods, training, performance evaluations, and spouse/family support. We find some support for our expectation that, at the headquarters level, the specific international management strategy that an MNC employs affects the choice of expatriate practices. Implications for theory and practice are discussed.

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Wang, CH., Varma, A. International management strategies and expatriate practices of Taiwanese multinational corporations: a contingency perspective. Asian Bus Manage 21 , 129–153 (2022). https://doi.org/10.1057/s41291-020-00118-y

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Received : 12 October 2019

Revised : 14 April 2020

Accepted : 16 April 2020

Published : 24 April 2020

Issue Date : February 2022

DOI : https://doi.org/10.1057/s41291-020-00118-y

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