South African Reward Association
21 October 2019
Will your international assignment package be enough?
Article by: Nicol Mullins- Chartered Reward Specialist and Exco Member at the South African Reward Association (SARA).
The days of living like a king or queen off back-to-back foreign assignments are diminishing, and expatriates - or international assignees as they are now called - may receive reduced rewards in the future.
“Companies are increasingly focussed on expense management, and costly assignee lifestyles are susceptible to cuts,” warns Nicol Mullins, Chartered Reward Specialist and Executive Committee Member at the South African Reward Association (SARA).
So what can aspiring and veteran assignees expect in terms of a reward package and will it meet their needs? “It depends,” says Mullins.
Whether or not an assignee’s package is sufficient will be determined by their eventual location, relative to their lifestyle expectations.
The base of departure should be to place international assignees in a similar position, not better or worse off, than what they are currently in.
Those working in developed countries would likely enjoy good public transport, shopping, dining, entertainment, housing, schools, medical care and other conveniences. But only if their remuneration makes these affordable.
Conversely, assignees arriving in emerging market countries could find themselves stationed in remote areas or less-developed cities where, even if they earn well, the quality of life available to them is much lower than what they are accustomed to.
Of course, quality of life is subjective. Middle Eastern cultures may be too restrictive to many female assignees regardless of rewards, while people from sunny climates might expect better compensation to endure bitterly cold regions for extended periods.
Outcomes are pivotal
Ultimately, the worth of a foreign assignment package hinges on what the assignee and the organisation wishes to accomplish from it.
Do they like experiencing other cultures or will their earnings go towards early retirement? Are they willing to “rough it” for a few years or do they expect better than what they had in return for uprooting themselves?
Mullins advises those considering international assignments to establish their goals up front and decide if the package offered will help them achieve these goals.
The first red flag is whether or not their prospective employer has an international assignment policy at all. A policy assists in providing transparency, clarity and certainty.
A comprehensive policy
For any foreign assignment to be successful, it must be mutually beneficial to both the employer and the assignee.
Companies should deal with assignees transparently and honestly from the start. They can begin by having a comprehensive policy document in place for each assignment destination, one that articulates the total rewards package, the company’s commitment and what costs it covers.
Astute assignees will ask if this policy document exists and obtain a copy to ensure it clearly lays out how their package will be structured from the moment they accept until their eventual return.
This includes what they can expect after they are repatriated, such as continued employment and benefits.
Counting the cost
Then it’s up to the candidate to weigh up the total package against their desired outcomes, not just in terms of lifestyle costs, but also any perceived sacrifices they will make when entering and adapting to their new environment.
They should also evaluate the impact of the stay on an accompanying partner or children.
“The business and assignee must consider that any amounts saved or earned will be nothing compared to the cost to both parties if the assignment fails,” says Mullins.
He encourages organisations to engage the services of a professional reward specialist when developing international assignment packages and policies.
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