If your team is ready for international expansion, it’s important to consider international compensation and benefits in your plans. It seems like an obvious statement, but when companies fail to properly prepare for international growth by not considering all the factors, like international compensation and benefits, they are setting themselves up for failure. We want to prevent that as much as possible and lead you on the path to success!
Step 1: Prepare, Prepare, Prepare
As mentioned, you must prepare for international expansion. Scope out your target country with a thorough visit. Also, develop a relationship with in-country partners to have a trusted resource for questions about everything from obtaining new clients to cultural differences. For more information on preparing for international growth, check out our blog post on this topic.
Step 2: Start Planning Your International Strategy
Now you have your target country picked out and you’re ready to start planning your international strategy with your business partners. Be sure to hold a specific meeting dedicated to international compensation and benefits. These will differ from your local plans because there are different expectations in many countries outside the US.
For example, some items that are typically offered by international employers are housing allowances, help paying taxes, spousal employment and compensation for trips home. These added expenses can potentially double an employee’s compensation.
Step 3: Scope Out your Business’ Competition
It is not a bad idea to pay attention to your competition that is currently operating in your target market. With a little digging, you can find out what a typical compensation and benefits program looks like. This is a good guideline to determine if your company is planning to offer too much or too little for its overseas employees.
Is your competition paying expats a foreign-service premium for taking an assignment? If the answer is yes, consider following suit. Many international companies offer a location premium to expats, which only increases if the location isn’t ideal.
Step 4: Support your Company’s Strategy with an International Compensation and Benefits Review
Once your business’ global strategy is complete, give it one more look over, and consider asking an expert for advice, to ensure you’re covering all your bases for international compensation and benefits.
Global compensation and benefits plan should clearly define all terms, which may seem like common sense in the US. For example, when you refer to regular or full-time employees, clearly define what this means. This goes for any employee status that is defined in your strategy. The terms salaries, exempt and permanent may mean different things in different markets.
Step 5: Complete Regular Reviews to Stay Compliant
Finally, don’t let a singular review be the only time your company considers its international compensation and benefits plan. This is a process your business should perform on a regular basis in order to remain compliant.
Global markets have laws and regulations regarding compensation and benefits that change constantly and the only way to stay on top of these new laws is to closely monitor your company’s plan.
For assistance with creating your business’ international compensation and benefits plan, contact one of our international consultants.