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Compensation and Benefits of Expatriates

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Describe the major components and issues of compensation at a foreign location. Explain the differences found in expatriate and host-country compensation.

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This detailed solution discusses the major issues and components that determine compensation abroad. It explains the differences found in expatriate and host country compensation. APA formatted references are included.

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Many components and issues come into play when determining the compensation for expatriates and host country nationals. Typically, competitive international firms must include "host country cost of living, housing, dependent education, tax implications and health care" (Sims, Schraeder, 2012). Two approaches are typically used, the destination based approach, and the balance sheet approach.

Compensation of expatriates and host country nationals should be consistent with the overall strategy and business needs of the company, as well as be competitive enough to attract and retain staff. Compensation also must also be easy and fair to administer. Expatriates assume that their benefits and standard of living will be preserved during the term of foreign duty, and often there is an expectation to be compensated for the ...

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