When it comes to international assignments, relocation policy is not just a ‘one-size-fits-all’ affair. Not only is there flexibility to cater for specific individual needs within the various policies in use, there are also plenty of potential pitfalls to consider too. So what are the main areas that you need to understand when negotiating your expat assignment contract?
Home or Away. There are now a number of different types of contracts being used by the HR and relocation companies to manage your assignment. The two most common are local (including local plus) and international. Local means that you will be temporarily governed by the employment pay and conditions of the host country, and aims to ensure parity among employees within a specific location for the duration of your contract. It can mean a increase in salary for more expensive regions, but a decrease for less expensive, and can significantly affect annual vacation entitlement. Local plus provides for additional needs or expenses incurred because of your temporary expat status, such as international school fees and trips home.
An international contract means you continue to work under the terms and conditions of your home location, regardless of the salary and benefit entitlements in your host location. As a comparison, European employees on an international assignment in the US would probably be entitled to more annual leave days than their American counterparts, whereas US employees heading to Europe would find the opposite was true.
Matching Up. Once you have established what type of contract you will be working under, you need to look carefully at the terms and conditions of that contract, most specifically with regard to equalization. You need to be sure that the package provided gives you the same (or better) standard of living as you would have in your home location. It is more than just the immediate basic requirements – housing, healthcare, schooling, transportation, financial and legal status – you also need to consider the longer term: school planning, college eligibility and fees, provision for dependents becoming legally adult, access to legal services should you need them, long term medical and social care, financial planning, tax implications and superannuation (company pension plan). You will need to do detailed research in advance with reference to your specific individual and family needs, and if you have a preliminary visit, try and talk to resident expats to get a realistic picture of what the cost of living in your host location might be, and what challenges to expect. Don’t assume that the information given by the relocation management company is accurate – they use a generic formula that may have little relevance to your situation and needs. There are plenty of resources available to help you – Living Abroad, the ExpatInfoDesk , Journeywoman and Expatwomen all have country specific information and contacts that can help you understand what you are getting into.
“There is nothing like returning to a place that remains unchanged to find the ways in which you yourself have altered.” – Nelson Mandela
What happens when your contracted assignment is over? In an ideal world, there is a clear progression that goes beyond your repatriation, and provides for a smooth transition back to your home location. Even with successful international assignments, many people have discovered that repatriation is as hard as expatriation, and there is an increasing awareness that companies need to provide similar support services to move employees back to their former home successfully. And finally, ensure that you are supported should the assignment not go to plan, and either the whole family or the dependents need to repatriate early. If the situation is serious enough to make you leave, the last thing you need is to have to manage and fund your own return journey..