Expatriate pay packages should be reviewed regularly

INTERNATIONAL REWARD

Expatriate pay packages should be reviewed regularly

Companies should review expatriate employees' pay at the end of their assignment to decide whether to move them onto local pay contracts, according to 39% of respondents to a survey by Mercer Human Resource Consulting. 

• Almost three in ten respondents (29%) thought expatriate employees should receive local pay -- which is often lower than expatriate pay -- at the end of their contract, if they decide to stay in the host country. 
• Just 13% believed that expatriate terms should apply indefinitely, as long as an employee remains an expatriate. 
• Conversely, 11% thought local terms should apply from the beginning of an assignment. Only 8% of respondents felt that expatriates should always be moved onto local pay at the end of their initial contract.

Yvonne Sonsino, European Principal at Mercer, said: "Expatriate pay can often be higher than local pay, especially if it includes a mobility incentive to go on assignment. As moving abroad can be a great upheaval for employees and their families, it can be necessary to pay a large premium initially, although more employers now promote assignments as being career enhancing." 

She added: "Terms of expatriate pay should always be communicated at the beginning of an assignment, including details of when an employee should be considered a local. Ideally, expatriate packages should not be set for more than five years as it is often appropriate to move employees onto local pay contracts after this length of time."

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The survey was conducted online and 124 HR professionals responded.

Mercer Human Resource Consulting is the largest consulting firm of its type in the UK, "helping organisations create business value through their people". It employs over 3,000 staff in 16 office locations in the UK. For more information visit www.mercerhr.com

Posted 1 September 2004