Key Components of an International Policy
THE POLICY ITSELF MAY BE BASED ON FLEXIBILITY
Q: What are the key components to consider when developing an International or Expatriate Management policy?
Before specific benefits should be determined, it is of utmost importance that a company defines the intention and/or desired outcome of their international assignment policy. With anticipated costs for a full expatriate program upwards to $1Million over the course of an average 3-year assignment, the intended goals should be a serious consideration in order to achieve a measurable outcome or return on investment.
Realistically, there is no one solution that is a perfect fit for all organizations, therefore purpose, priorities and expected outcome should be carefully thought out. For example, many multinational corporations incorporate an international work placement into their leadership development programs. In this instance, a “high potential” with the firm would be expected to gain the advantage of international experience, networking with foreign colleagues and operations, and is expected to bring this knowledge back to incorporate into the organization. Typically, these types of programs are very well structured and also form part of the organizations career development and succession planning strategies.
Terri Lynn Oliver|
Alternatively, the requirement for a formal international program may be the result of an urgent need for a specialized skill on a project underway in a foreign country. These forms of “extended business trips” contain many of the same requirements, but may be administered on a smaller and less formal scale. Therefore, the policy itself may be based on flexibility and benefits on an “as needed” basis versus an organization which stresses consistency of policy.
With regards to key components of an international policy, in no particular order of relevance, the following is a reasonably thorough list of conceivable benefits which may be considered in the development of any international policy:
Cross-cultural training for employee and family
Immigration: Work authorizations and Visas
Property and/or tenant management services
Home sale services
Car subsidy or assistance with loss on sale of vehicle
Driver or transportation costs in host country
Destination and home search services
Household goods move and/or long-term storage
Cost of living adjustments
Education assistance for children
Spousal career assistance
Return home trips
Income tax consultation and tax return preparation
Repatriation assistance, which may include:
House hunting trip
Destination and re-settlement services
Home purchase assistance
Spousal career assistance
Income tax return preparation services
With the complexity of all the possible benefits, the question of total cost should also be a priority. There is a difficult balance between minimizing the cost of an assignment to maximizing the effectiveness. More benefits typically results in a higher cost, but in many instances, it could also determine a successful assignment versus a failed one. Depending upon the destination country, the investment in cross-cultural or language training may better prepare and set the expectations for the employee and family, thereby improving the probability of a successful assignment. Proper tax advice and planning could easily minimize unforeseen tax obligations. Maintaining the home residence may protect the employee against rising real estate values during the term of the assignment. The cost to ship the household goods may ultimately be more cost effective than renting furnished accommodations, and so on and so forth.
The best course of action for the HR Professional is to be prepared with the knowledge of the various requirements of an international work placement, take the corporate culture into consideration and have an understanding of the desired outcome of the international work placement. If the company does not have a formal policy, then benefits based on an “as needed” basis would be a reasonable course of action. Ensure that details and agreed upon benefits are well documented and administered in a method to guarantee legal, immigration and tax compliance over the term of the employee’s international assignment.
Terri Lynn Oliver is Client Service Director for Weichert Relocation Resources Inc.