Expatriation Programme Costs - Cut or Control?

Many companies involved in global mobility recognise and agree with the necessity of sending expatriates on assignments, knowing full well that these ones are at the forefront of this movement and have adequate experience to make things work.

However, many companies also recognise and agree that the global economy is currently wading in deep waters. They are grimly aware that full recovery is possibly a very long way off.

In light of this, it becomes pertinent for the brass to execute a very tricky corporate balancing act while walking on the tightrope of a declining international economy. Talk about a class act!

So on the one hand, you want to save and possibly reduce costs. On the other hand, you don't want to reduce your company's international presence via your expatriates. What's left to do? After all, survey shows that full expat programs can sometimes easily into six-digit figures annually. You may be surprised to know that the not-so-secretive secret many international human resource managers will recommend is not cost reduction, but cost control.

What is the difference, then? Put simply, cost reduction means you'll be telling your expatriates right off the bat that you're cutting their funding. Whether that comes out of their salary, allowance, or other bonuses, you can probably foresee that there is a low chance of this ever ending well. This is especially since the expat is your face to the other side of the world, and you are unable to monitor their dealings with the clients as closely as you could with a local employee. Dissatisfaction - however tiny - is the last thing you want them to exude when facing potential clients!

The other option of cost control is slightly different. Instead of slashing every single zero you can see on the expat pack, you'll be applying a few principles and giving a few incentives to your expats. The purpose? To motivate them to trim spendings done on the company's account while not holding back any of the incentives that they rightfully deserve.

Cost control helps the expat see and reap the benefits of responsible spending - something many often forget when they are spending Other People's Money. By putting them in semi-control, they feel closer to the company they represent and can thus fulfill their tasks with a higher morale than if you had just simply cut everything into half. It also makes it clear to the expat that their service is valued by the company, that their opinion matters, and that the expat and the company are in this together - for the long-run.

So in nutshell, control; don't cut!