What are the best ways to manage compensation and benefits for expats?

3 Provide relevant benefits

Besides the base salary, you also need to provide benefits that are relevant and attractive for your expats. These may include housing allowance or accommodation, transportation allowance or car, education allowance or tuition, relocation allowance or expenses, home leave allowance or flights, health insurance or medical, tax assistance or equalisation, retirement savings or pension, and incentives or bonuses. You must consider the value and impact of each benefit, as well as the eligibility and entitlement of your expats depending on their contract, assignment, and personal circumstances. The cost of renting or buying a suitable place to live in the host country may be higher or lower than in the home country. The cost of commuting or travelling in the host country may vary depending on the distance, traffic, safety, and public transport options. The cost of enrolling the expat's children in a school or university in the host country may have different standards, curricula, fees, and admission requirements than in the home country. Moving from the home country to the host country may include expenses for packing, shipping, storage, insurance, visas, flights, and settling-in services. Visiting the home country periodically may be important for maintaining personal and professional connections and well-being. Accessing health care services in the host country may have different quality, availability, and coverage than in the home country. Filing and paying taxes in both countries may have different rates, rules, and deadlines than in the home country. Contributing to a retirement plan in the host country may have different options, benefits, and regulations than in the home country. Rewarding an expat for their performance may be based on different criteria, measures, and frequency than in the home country.

4 Communicate clearly and regularly

One of the key factors for managing compensation and benefits for expats is communication. You need to communicate clearly and regularly with your expats about their compensation and benefits package, including the rationale, terms, conditions, and changes. You also need to communicate with their managers, colleagues, and stakeholders in both the home and host countries, to ensure alignment, transparency, and support. You can use various channels and methods to communicate, such as emails, newsletters, webinars, meetings, or consultations. You also need to provide feedback and recognition to your expats, to acknowledge their contributions and achievements, and to address any issues or concerns they may have.

5 Review and adjust periodically

Another key factor for managing compensation and benefits for expats is review and adjustment. You need to review and adjust your compensation and benefits package periodically, to reflect the changes in the market, the business, the assignment, or the expat's needs and expectations. You can use various sources and tools to review and adjust, such as surveys, benchmarks, indices, or calculators. You also need to monitor and evaluate the effectiveness and efficiency of your compensation and benefits package, to measure the return on investment, the satisfaction, and the retention of your expats.

Managing compensation and benefits for expats can be a rewarding and challenging task. By following these best practices, you can design and implement a fair and effective compensation and benefits package for your expat staff, that will help you attract, motivate, and retain them, while achieving your business goals.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?