expatriate

1. COMPENSATION
BENEFITS
EXPATRIATE
COMPENSATION

2. An expatriate is a person residing in a country other than their native country.
In common usage, the term often refers to educated professionals, skilled
workers, or artists taking positions outside their home country, either
independently or sent abroad by their employers.
The average expatriate pay package provided by companies in Japan to mid-
level employees is $386,451 a year, by ECA International.
Perhaps because of some of the challenges living in India entails -- think bad
traffic, overcrowding and pollution -- it came in at No. 3,
with companies offering mid-level staff an average package of $299,728 to
attract overseas talent.

3. For simplicity, expat packages fall into three basic categories:
1) Full Expat package,
2) Expat Lite and
3) Local Hire.
Allowances
Housing
Education
Automobile
Home Travel
Hardship
Other benefits(Tax evasion)
Some countries have severe penalties, including jail for foreign nationals caught working without a
permit.

4. EMPLOYEE MOBILITY TREND
This mobility activity won’t be slowing down any time soon. With the Indian government easing regulatory
restrictions, simplifying the visa process, and improving infrastructure, companies are better able to get
the talent they need to the locations where they need them.
The mobility industry has come a long way in India. A decade ago it was difficult to find suitable expat
housing in Tier-1 cities, while today great housing options can be found even in Tier-2 cities. Many
housing communities boast villas and condominiums replete with amenities like swimming pools,
gymnasiums and golf courses.
It is hard to believe that at one time multinational companies offered their expat employees a “hardship
allowance” to move to India! In present times, that would be quite unthinkable. In fact, most millennials
today believe that having a stint working in India is beneficial to their career progression.
Customers’ needs are changing

5. MCQ
1. Which of the allowance are given as Full Expat package ?
Housing
Education
Automobile
Home Travel
All of the above
2. India stands in which position in terms of average package to the expatriate ?
1st
3rd
2nd
12th

6. ASSIGNMENT VARIANTS
BUSINESS TRIPS:
Business trip is travel undertaken
for work or business purposes, as
opposed to other types of travel, such
as for leisure purposes or regularly
commuting between one's home and
workplace.

7. Normally companies find out the best potential employees and
send them on business trips to other places, for the growth of the
company and to expand their business. There are two different
terms in which the business trips are allowed.
Short term:
A short term business trip is a short trip by an employee to
different state or country employment-related purposes.
A business trip can be up to six months, but depending on the
type of work performed and visa requirements, it may be
considered a short-term assignment. Understand the nature of the
trip and be mindful of triggers for taxable presence. In most
countries, any stay over 183 days will trigger tax residency.

8. Long term Assignment:
Long-term assignments are typically defined as lasting between one
and five years, after which the assignee returns home or goes on to
another assignment.
An assignment of less than a year’s duration is usually classed as
short-term.
If the assignee commutes from their home country to and from the
assignment, it is classed as a commuter assignment. In each case,
different policy content applies.
Different policies also apply to business travel, permanent (one-way)
moves, and when assignees remain in the host location once their
assignment term is completed.

10. EXPAT ASSIGNMENT LIFECYCLE

11. An international transfer is a major life event, presenting the same mix of
excitement, stress, exhilaration and exhaustion that you may face during
other periods of drastic change. It can take a toll, physically, emotionally
and psychologically—and it usually does.
The typical phases of the expat adjustment cycle are Preparation,
Honeymoon, Culture Shock, and Adaptation and we also include
Repatriation—an important yet often overlooked component of a
successful international experience.
EXPAT ASSIGNMENT PROCESS

12. Preparation :
The pre departure period is a time of mixed emotions. Usually, there is excitement at the
prospect of starting a great adventure and experiencing a different country, culture, and lifestyle.
This is sometimes tempered by the anxiety of moving into unfamiliar territory—literally and
figuratively—and it is always accompanied by the flurry of activity inherent in moving from one
country to another.
Honeymoon :
Everything is new and exciting as you enter the Honeymoon phase of an expat assignment.
You’re settling in, and too busy getting to know your new life to think about what you miss from
your old life. These positive feelings of excitement and discovery can last several weeks.
Different ways of doing things are enchanting and exotic, and you haven’t had time to find them
frustrating. Indeed, you begin to think that all the stories you’ve heard about Culture Shock and
depression are exaggerations.

13. Culture Shock :
Once you emerge from the cocoon of the Honeymoon stage, the rosy hue fades and the reality of
life in the new environment sets in. Culture Shock can include feelings of isolation, communication
issues, and discomfort with the culture or local environment. All of a sudden, the charming
differences seem annoying and tiring; the language differences become frustrating.
You start to miss aspects of your home life, your friends. You want a particular food, but you can’t
find it. Or, the routine in the office is very different and, while you understand the reasons why, it
becomes tiring to think through every cross-cultural situation.
Adaptation :
Several months into an expat assignment, the dramatic "ups and downs" start to diminish and
assignees reach a "recovery plateau" in the adjustment cycle, But this should be the most
comfortable, productive phase of the assignment, when the family reaps the rewards for
navigating the cultural and emotional challenges of the previous phase.

14. Repatriation :
For families who have been on
assignment for an extended period
or on successive international
assignments, the process of
returning home can be as
challenging and traumatic as the
initial relocation.
Every expat goes through this
predictable adjustment cycle when
they leave their home country and
settle into another. But, with some
planning and active engagement we
can have a smoother expat
assignment.

19. Cost of Living Concepts
Index allowances and spendable income
Quality of living and balance sheet
approach

21. ● Cost of living indexes are meant
to compare the expenses from
one town or geographic region
to another.
● Cost of living indexes include
expenses such as food, shelter,
transportation, energy,
clothing, healthcare, and
childcare.
● A cost of living index is also
used to track how much the
costs of basic expenses rise over
a period.

22. ● Cost of living indexes are meant to compare the expenses an
average person can expect to incur to acquire food, shelter,
transportation, energy, clothing, education, healthcare, childcare,
and entertainment in different regions. A cost of living index is
also used to track how much the costs of basic expenses rise over a
period.
Cost of Living Index
● A cost of living index can help a person determine whether the
income or salary being earned is enough to cover basic expenses.
From there, a person can assess whether there's enough extra income
left over to save for retirement or pay off debt.

23. The Cost-of-Living concept
● THE COST-OF-LIVING
ALLOWANCE (COLA)
● COST OF LIVING INDEX
● HOME-COUNTRY
SPENDABLE INCOME
● HOST-LOCATION
SPENDABLE INCOME

27. Summary: COST OF LIVING IN INDIA
● Family of four estimated monthly costs are 84,064.65₹
without rent.
● A single person estimated monthly costs are 24,032.56₹
without rent.
● Cost of living in India is, on average, 65.67% lower than
in United States.
● Rent in India is, on average, 87.68% lower than in
United States.

28. Balance Sheet Approach
The balance sheet approach determines an expatriate’s salary based on the going rate
for the same — or a similar — position in their home country. Organizations will
typically allocate additional allowances or reimbursements as appropriate, which
ensures employees can maintain their usual standard of living once they relocate.
Ultimately, this method preserves the employee’s current purchasing power, no matter
where they end up working.

29. Step 1: The organization determines the employee’s net salary based on their home country’s going
rates.
Step 2: The employee’s salary is broken into four categories:
● Taxes
● Housing – including rent, bills, utilities, etc.
● Goods and services – including expenses such as food, clothing, recreation, medical care,
and transport
● Reserve – including savings, benefits, pension contributions, education, etc.
● The employee is expected to contribute a portion of their salary to each of these four
categories, equivalent to what they would typically pay for each one at home. If, for
example, rent in the host country is more expensive than an employee’s home country, the
organization will pay the difference. This serves to protect employees from cost differences
between the home and host countries.
● In some cases, when an expatriate is relocating to a country where living costs are
considerably cheaper, their employer will decrease the compensation accordingly.

30. Step 3: The organization provides additional benefits or allowances, based on specific
circumstances. For example, an employee relocating with their partner and/or children
might receive an additional allowance, particularly if a partner is unable to work in the
host country.
The provision of a hardship allowance, sometimes called a quality of living allowance, is
also fairly common to incentivize employees to accept a relocation proposal. This takes
into account factors in the host country that might make it unappealing to expatriates,
such as political instability, safety, health care, natural disasters, and the quality of
schools.

31. Questions
1.What is cost of living?
MCQ
2.Cost of living indexes include expenses such as …..
a. Food b. Healthcare
c. clothing d. All of the above
3. The organization determines the employee’s net salary based on …….
a.home country’s going rates b. Index rate
c. host country’s going rates d. None of the above

32. International Human Resource Management: A Case Study of Apple Inc.
Apple Inc. is a competitive global company in the communications and electronics industry. It
is a leading designer, manufacturer, and marketer of communications and media devices.
It is also involved in the manufacture and distribution of digital music players and portable
computers. The company has operations in different parts of the world. It has an elaborate
international human resource management system.
The current study addresses the element of international human resource management with
regards to Apple Inc. Various aspects related to management of personnel in this
organization are reviewed.
They include, among others, training of employees, deployment across the world, and return
on investment.

33. Components of Pre-Departure Training
Pre-departure training provides expatriates with the knowledge and skills required to survive
following their immediate arrival at the destined country of work. Essentially, employees going to work
in another country require information on various aspects of the host nation before they leave home.
Some of the things they need to know include the culture and customs of the host country. They also
need to be aware of the language and dress code appropriate to the new environment. In addition,
international assignees need information on business etiquette in the new country.
Information on verbal and non-verbal communication, taboos, rules, decision-making techniques,
and business management structures should be provided to international employees during pre-
departure training.
Culture and customs of the new country. Training on host country’s customs is essential in ensuring
that the expatriates adapt to the local culture. It is noted that business operations would be negatively
affected if the behavior patterns of the new employees conflict with the cultural expectations in the host
country.
For instance, a US citizen working for Apple Inc. may be deployed to Saudi Arabia. Such an employee
should be aware of how Saudi nationals regard alcohol. In addition, female employees would be
expected to conform to the societal expectations with regards to their dress code.

34. Language. Language is an essential component of communication in international business. Expatriates
require more than just basic knowledge on the host country’s language for effective execution of their
assignments
Business etiquette in the new environment. Business etiquette may vary between countries. In some
parts of the world, governments regulate business policies. For instance, such elements as tax policies,
power distance, and human resource management may differ from one country to the other.
An expatriate manager at Apple Inc. would be required to understand the variation of such policies.
Failure to comply with the new rules and regulations would most likely jeopardize the operations of the
corporation in the host market.
Performance Assessment among Expatriates
Introducing assessment. Assessing the performance of expatriates is a major element in international
human resource management. The performance can be reviewed using a number of criteria. Such criteria
include determining strategy implementation and attainment of competitive advantage.
There are three criteria commonly used in evaluating expatriates. They include completion of foreign
assignments, performance on the foreign assignment, and cross-cultural adjustment. The criteria apply to
all employees irrespective of the operations of a particular organization.

35. Premature termination translates to failure in relation to the performance of the expatriate. In most cases,
premature termination occurs when the expatriate requests for transfer to home country before completion
of the assignment.
Recruitment and Selection Strategy for Apple Inc.’s International Assignments
International assignments entail three discrete phases. The first is the pre-assignment stage. It involves the selection and preparation of
employees for deployment.
The second is the ‘actual’ assignment. It involves the ‘actual’ stay of the expatriate in the new country. The last is the post-assignment stage. It is
also commonly known as repatriation.
The strategy is the most suitable recruitment and selection criteria for Apple Inc. It is noted that measuring relevant cross-cultural and
interpersonal abilities is a difficult task for many organizations. In addition, most expatriate postings rely on personal recommendations. Such
recommendations are derived from either line managers or specialist personnel. As such, Apple should rely on the proposed recruitment and
selection policy. The strategy would reduce chances of failure in the assigned job.
Staffing Alternatives for Foreign Operations
There are several approaches used in resolving the issue of human resource in relation to international assignments. The strategies include
ethnocentric and staffing approaches. Others are regiocentric and geocentric staffing strategies polycentric.
The ethnocentric approach involves filling all the key positions in the organization with local experts. The polycentric approach, on the other
hand, proposes the use of host country’s nationals in managing subsidiaries. However, in this approach, key positions in the corporation’s
headquarters are held by nationals of the parent country.
The regiocentric approach is a mixed staffing strategy. Here, executives are transferred between regions. Operations of the company are
divided according to geographical regions.

36. Conclusion:
International human resource management differs with domestic management of
employees in several ways. Managing employees at the international level is
characterized by different labor markets, varying management practices, and dynamic
labor laws. Economic and other cultural barriers make international management of
human resource a complex affair.
Managing international employees may differ from one organization to the other.
However, according to this author, the underlying principles are similar in all
organizations. As a result, effective management of assignees and their related
assignments is a major determinant of the success of these international ventures.