How to develop a compensation strategy for international assignments

Determining a compensation strategy for employees in your domestic office can be tricky at times, but sending an employee abroad can create even more complex issues. Suddenly, you have to think beyond just payroll and benefits. Housing considerations, transportation and even family expenses may be included in the compensation package for an international assignment. And these can vary drastically with the term of the contract.

What to determine ahead of time
As you begin to think about negotiating the contract for an international assignment, there are a few key things that you need to settle first. At the top of that list is the duration of the contract. Are you sending a staff member aboard for a few months, or for a few years? Or perhaps the contract is open ended. The length of time stated in the contract will dictate certain received benefits. Next, you need to consider the type of assignment. Is the employee going to inspect factories abroad – or will they be managing one of those factories? Work in a highly populated city, on the other hand, will necessitate steeper costs when it comes to housing. And finally, there’s the employee’s marital status. Will he or she be taking along family members? Will the employee’s children need to receive education abroad? These are the basic facts that need to be settled upon before further negotiations can take place.