MGT 4336 Human Resource Management : Traditional Expatriate Package

Describe the content of a ‘traditional’ expatriate package, and the reasons of the company to provide such benefits. What limitations do you see in this contract when it comes to handling the company’s emerging threats?

Answer:

A traditional expatriate package consists of housing facilities for the expat, hardship bonus that is often calculated to be a huge part of the base income of the expat. The expat is often provided with an automobile service along with the fuel and maintenance, which is undertaken by the concern under which the expat is employed. The expatriate package also covers the international level private schooling of the children of the expat, healthcare facilities for the entire family of the expat. The traditional expatriate package also cover the cost of the round-trip airfares of the entire family to the home country of the expat. The expat should also be provided with tax equalization with his home country. The company should provide these benefits to the expat so that they may agree to relocate to the other country and help the company to expand their business.

According to the given case study, Akiko may face a number of limitations that are stated in the expatriate package. The expatriate package that was extended to her included an additional cost for the concerned company, which amounted to almost three times the basic salary that she had been receiving (Andresen, 2013). Thus, the concerned company had taken the decision of limiting the post of the expatriates to the critical posts only. The expats were generally wanted to relocate to the country where they were sent for assignments. Thus, the company costs were on a rise. In order to tackle this the company decides to pay the expats on the salary schema that exists in the host country. In the current scenario that the concerned firm is facing, there have been expats who have been almost over eight long years in a foreign country and are not expats any longer. Thus, the company had no other choice but to revise their policies regarding the international mobility so as to create an alternative that would prove to be cost effective.

References

Andresen, M. (2013). Local and International? Managing Complex Employment Expectations.