compensation

International Compensation challenges in assignments

As recruiting becomes more difficult for employers and job-hunting less difficult for candidates, more people will be considering overseas assignments. The timing is certainly more favorable than when exploring overseas work during the recession.

Here’s why:

• Corporate recruiters overseas are also feeling pinched by a shrinking candidate pool.

• Stronger economies, including that of the United States, can offer new opportunities once assignments end.

• A more expansive environment almost guarantees salary increases as well as internal and external advancement.

• While political unrest may be on the rise, general security has been improving.

• Executives are more savvy than ever about the relationship between career advancement and compensation.

Blue Bell, Pennsylvania’s Jeff Zinser, Right Recruiting principal and founder (rightrecruiting.com), connects advancement and compensation: “if the career advances, the money will follow.”

INTERNAL HIRES

Two bilingual executive search professionals indicate that the generous compensation package must be a major draw, even though people who take such assignments are clearly out of the category of needing it. Based today in Miami’s Stanton Chase office (stantonchase.com), Juan Morales worked in several Latin American countries and is now managing director and global practice leader for the supply chain, logistics & transportation practice group of 75 Stanton Chase offices in 45 countries worldwide. Through retained executive search inside multinational companies, he places people in what he calls a “fast track opportunity, because there are skills that may not be available in the domestic setting.” These opportunities in multinational companies don’t necessarily involve a promotion, but usually pay $200,000 or as much as $400,000, depending on a company’s need.

Morales says that comfort with the expat lifestyle may result in a candidate extending an assignment while the position negotiated at the originating company before leaving the U.S. may have disappeared.

However, even if it’s there, adjustment may be troublesome. “Re-entry into a domestic role can create problems,” he points out, such as job insecurity and returning culture shock, (given the) “dizzying pace of change in today’s world.” He estimates that more than 50 per cent who return to a negotiated role receive promotions.

LOCAL HIRES

Karen Russo, president of K. Russo Consulting Inc. (http://krussoconsulting.com/), in Riverside, Connecticut, says that ROI is more favorable when candidates come from a local market, which assures fewer cultural challenges. She is also president of IIPE Executive Research S. de R. L. de C. V. (http://iipe.net/), in Quintana Roo, Mexico, her headquarters for international executive search.

Employers may be caught in a bind, according to Russo, who comments, “Companies need to pay the expat for an assignment, but there is no incentive to take less money to go abroad.” Furthermore, tension can build if the new boss earns less than the expat. She adds that others in the local market may be doing similar tasks but with considerably less compensation and that salaries become public knowledge.

In some countries, local laws apply only to the locals, Russo explains, which means that expats paid by their native country lose out on certain benefits, such as vacation time. Doesn’t this present a good reason to negotiate even greater compensation?

Compensation for international assignments may be more complicated than for domestic. However, in today’s tight market, negotiations will likely favor the potential expat.

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