host country assignment model

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Managing International Assignments: Compensation Approaches

A new international assignment landscape is challenging traditional compensation approaches

For many years, expatriate compensation has been focused on a dilemma: having assignees on expensive home-based expatriate package versus localization - which is about replacing expatriates with locals or at least transition expatriates from an expatriate package to a local salary. Many predicted that the traditional home-based balance sheet approach would gradually disappear. The predictions of the demise of the typical expatriate approach have been greatly exaggerated. We are witnessing the emergence of new compensation challenges instead, due to the complexity of having to manage multiple types of assignments and assignee categories.

The home-based approach still retains its utility for certain kinds of moves (e.g. business-critical assignments or moves to hardship locations). Local strategies are becoming more common but, due to the difficulty of applying them consistently in all transfer destinations, they are used only in some cases (moves between similar countries, developmental moves) and take multiple forms as “purely local” or local-plus approaches. Additional approaches like international compensation structures have emerged to address issues of global nomads.

The challenge for HR managers is, therefore, not so much to find the best approach applicable for all assignments as to deal with individual assignment complexity, envisage greater mobility policy segmentation and, if relevant for the company, map each compensation approach to a particular assignment in a consistent way.

The increasingly complex international assignment landscape: One size does not fit all anymore

Expatriates vs. Locals

One size fits all?

Let's localize assignees as soon as possible!

Expatriates

Rise of the third-country nationals

Need to add a cost efficient category for junior employees/developmental moves?

Traditional expatriates

Global nomads

Permanent transfers

Employee-initiated moves

Local or local plus?

Foreigners hired locally

Commuters (cross-border or regional

Multiple types of short-term/project/rotational assignments

Increasing number of home locations

Reviewing international assignment approaches in three steps:

Step 1: Understand the options available

Approaches linked to the host country (local or local-plus)

While these approaches sound logical and natural (when relocating assignees to a new country, they will be paid according to the local salary structure in that destination country) their practical implementation is often tricky. Few employees accept a salary decrease when moving to a low-paying country. It is often difficult to reintegrate assignees relocated to a high-paying country into their original salary structure due to their inflated base salary.

The host approach was historically not the most common for assignees on long-term assignments. However, we have witnessed a growing interest in recent years in host-based approaches – either a host approach or local-plus approach (host salary plus selected benefits or premiums) – as companies are trying to contain costs and as significant salary increases in many emerging markets make host strategies more attractive.

Approaches linked to the home country ("balance sheets")

Home-based approaches have been traditionally the most commonly used to compensate international assignees. Assignees on a home-based approach retain their home-country salary and receive a suite of allowances and premiums designed to cover the costs linked to expatriation. The equalization logic behind the balance sheet approach (no gain/no loss) encourages mobility by removing obstacles. Retaining the home-country salary facilitates repatriation. The balance sheet approach can, however, be costly. Many companies either look for alternatives or try to reduce the benefits and premiums included for less significant moves.

Other Solutions

Hybrid approaches attempt to combine the advantages of the home and host-based approaches. These often mean running a balance sheet calculation and comparing the results with the host market salary to determine what solution would make sense. A hybrid approach can work well for a small assignee population but it can generate inconsistencies when companies expand globally, and the assignee population grows significantly.

Finally, some companies rely on international compensation structures that do not use the host and the home structures at all. These might utilize the average salary in a selected group of high-paying countries where the companies operate. This approach facilitates mobility for global nomads and highly mobile employees. It is, however, often very expensive and doesn’t solve all assignment-related issues (e.g., currency issues, pension, taxation). It is typically used in specific industry sectors (e.g., energy and engineering) and for a few assignees (top level managers and global nomads.)

Step 2: Assessing assignment patterNs and business objectives

Assignment patterns

Are assignees moving between countries with similar salary levels, which would make the use of local or local plus easier or, on the contrary, are expatriates sent to host countries with different pay and benefits structures (low-paying to high-paying, or high-paying to low-paying country moves)? Are moves for a fixed duration – e.g., assignments lasting one to five years – or will the company rely on permanent transfers with no guarantee of repatriation?

Assignee Population

Are assignees coming mainly from the headquarter countries (typical for early stages of globalization) or is the number of third-country nationals already significant? A growing number of multinational companies report that the number of moves between emerging markets (“lateral moves”) is catching up with or exceeding the number from the headquarters, prompting a review of compensation approaches.

Are some assignees becoming true global nomads who move from country to country without returning home during their career? Employees, and especially the younger generations, are becoming much more mobile, but only a minority would be global nomads. These assignees are usually top-level managers, experts with unique skills, or globally mobile talent sourced from small or emerging countries where the absence of career opportunities perspective would preclude repatriation perspectives.

Company's philosophy and sector

Some industry sectors like services and finances relocate employees between major regional and financial hubs which facilitate the use of local approach, whereas energy and engineering companies transferred employees to hardship locations are a key feature of the business – and requires comprehensive expatriation packages often based on balance sheets and international salary structures.

Step 3: Assess segmentation needs

An increasing number of companies rely on expatriate policy segmentation to reconcile the cost control versus international expansion dilemma – how to have the same number of assignments or more without increasing the budget dedicated to international mobility. Segmentation means reallocating part of the budget to business critical assignees and limits the costs of non-essential moves.

Some of the commonly used assignment categories include strategic moves (business-critical), developmental moves (which benefit both the company and the employee), and self-requested move (requested by the employee but not essential to the business).

A consistent policy segmentation approach allows HR teams to present business cases or assignment options to management and provide a clearer understanding of the cost and business implications of relocation for different assignees.

It could also help manage exceptions into a well-defined framework based on a consistent talent management approach, as opposed to ad hoc deals.

Example of segmented compensation approach: the four-box model

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14.3: Staffing Internationally

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Learning Objectives

• Be able to explain the three staffing strategies for international businesses and the advantages and disadvantages for each.
• Explain the reasons for expatriate failures.

One of the major decisions for HRM when a company decides to operate overseas is how the overseas operation will be staffed. This is the focus of this section.

Types of Staffing Strategy

There are three main staffing strategies a company can implement when entering an overseas market, with each having its advantages and disadvantages. The first strategy is a home-country national strategy . This staffing strategy uses employees from the home country to live and work in the country. These individuals are called expatriates . The second staffing strategy is a host-country national strategy , which means to employ people who were born in the country in which the business is operating. Finally, a third-country national strategy means to employee people from an entirely different country from the home country and host country. Table \(\PageIndex{1}\) lists advantages and disadvantages of each type of staffing strategy. Whichever strategy is chosen, communication with the home office and strategic alignment with overseas operations need to occur for a successful venture.

Human Resource Recall

Compare and contrast a home-country versus a host-country staffing strategy.

Expatriates

According to Simcha Ronen, a researcher on international assignments, there are five categories that determine expatriate success. They include job factors, relational dimensions, motivational state, family situation, and language skills. The likelihood the assignment will be a success depends on the attributes listed in Table \(\PageIndex{2}\). As a result, the appropriate selection process and training can prevent some of these failings. Family stress, cultural inflexibility, emotional immaturity, too much responsibility, and longer work hours (which draw the expatriate away from family, who could also be experiencing culture shock) are some of the reasons cited for expatriate failure.

Source: Adapted from Simcha Ronen, Training the International Assignee (San Francisco: Jossey-Bass, 1989), 426–40.

Most expatriates go through four phases of adjustment when they move overseas for an assignment. They include elation/honeymoon , resistance , adaption , and biculturalism . In the elation phase, the employee is excited about the new surroundings and finds the culture exotic and stimulating. In the resistance phase, the employee may start to make frequent comparisons between home and host country and may seek out reminders of home. Frustration may occur because of everyday living, such as language and cultural differences. During the adaptation phase, the employee gains language skills and starts to adjust to life overseas. Sometimes during this phase, expatriates may even tend to reject their own culture. In this phase, the expatriate is embracing life overseas. In the last phase, biculturalism, the expatriate embraces the new culture and begins to appreciate his old life at home equally as much as his new life overseas. Many of the problems associated with expatriate failures, such as family life and cultural stress, have diminished.

Expat Failures

A short discussion on why international assignments fail.

Host-Country National

The advantage, as shown in Table \(\PageIndex{1}\) of hiring a host-country national can be an important consideration when designing the staffing strategy. First, it is less costly in both moving expenses and training to hire a local person. Some of the less obvious expenses, however, may be the fact that a host-country national may be more productive from the start, as he or she does not have many of the cultural challenges associated with an overseas assignment. The host-country national already knows the culture and laws, for example. In Russia, 42 percent of respondents in an expatriate survey said that companies operating there are starting to replace expatriates with local specialists. In fact, many of the respondents want the Russian government to limit the number of expatriates working for a company to 10 percent 1 . When globalization first occurred, it was more likely that expatriates would be sent to host countries, but in 2011, many global companies are comfortable that the skills, knowledge, and abilities of managers exist in the countries in which they operate, making the hiring of a host-country national a favorable choice. Also important are the connections the host-country nationals may have. For example, Shiv Argawal, CEO of ABC Consultants in India, says, “An Indian CEO helps influence policy and regulations in the host country, and this is the factor that would make a global company consider hiring local talent as opposed to foreign talent” (Rajagorpal, 2011).

Third-Country Nationals

One of the best examples of third-country nationals is the US military. The US military has more than seventy thousand third-country nationals working for the military in places such as Iraq and Afghanistan. For example, a recruitment firm hired by the US military called Meridian Services Agency recruits hairstylists, construction workers, and electricians from all over the world to fill positions on military bases (Stillman, 2011). Most companies who utilize third-country national labor are not new to multinational businesses. The majority of companies who use third-country national staffing have many operations already overseas. One example is a multinational company based in the United States that also has operations in Spain and transfers a Spanish manager to set up new operations in Argentina. This would be opposed to the company in the United States sending an American (expatriate) manager to Argentina. In this case, the third-country national approach might be the better approach because of the language aspect (both Spain and Argentina speak Spanish), which can create fewer costs in the long run. In fact, many American companies are seeing the value in hiring third-country nationals for overseas assignments. In an International Assignments Survey 2 , 61 percent of United States–based companies surveyed increased the use of third-country nationals by 61 percent, and of that number, 35 percent have increased the use of third-country nationals to 50 percent of their workforce. The main reason why companies use third-country nationals as a staffing strategy is the ability of a candidate to represent the company’s interests and transfer corporate technology and competencies. Sometimes the best person to do this isn’t based in the United States or in the host country.

Key Takeaways

• There are three types of staffing strategies for an international business. First, in the home-country national strategy , people are employed from the home country to live and work in the country. These individuals are called expatriates . One advantage of this type of strategy is easier application of business objectives, although an expatriate may not be culturally versed or well accepted by the host-country employees.
• In a host-country strategy , workers are employed within that country to manage the operations of the business. Visas and language barriers are advantages of this type of hiring strategy.
• A third-country national staffing strategy means someone from a country, different from home or host country, will be employed to work overseas. There can be visa advantages to using this staffing strategy, although a disadvantage might be morale lost by host-country employees.
• Choose a country you would enjoy working in, and visit that country’s embassy page. Discuss the requirements to obtain a work visa in that country.
• How would you personally prepare an expatriate for an international assignment? Perform additional research if necessary and outline a plan.

1 “Russia Starts to Abolish Expat jobs,” Expat Daily , April 27, 2011, accessed August 11, 2011, www.expat-daily.com/news/russia-starts-to-abolish-expat-jobs/ .

2 “More Third Country Nationals Being Used,” n.d., SHRM India, accessed August 11, 2011, http://www.shrmindia.org/more-third-country-nationals-being-used .

Rajagorpal, D., and MC Govardhanna Rangan, “Global Firms Prefer Local Executives to Expats to Run Indian Operation,” Economic Times , April 20, 2011, accessed September 15, 2011, http://articles.economictimes.indiatimes.com/2011-04-20/news/29450955_1_global-firms-joint-ventures-investment-banking .

Stillman, S., “The Invisible Army,” New Yorker , June 6, 2011, accessed August 11, 2011, http://www.newyorker.com/reporting/2011/06/06/110606fa_fact_stillman .

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Short-term international assignments: How to achieve consistency

We previously discussed how in today's fast-paced business environment, the need to deploy employees to work outside of their home country can sometimes lead to many short-term assignees travelling on a business visa to avoid the expense and bureaucratic process of getting work authorisation. In addition, many managers may inadvertently create ‘stealth’ expats by asking short-term assignees to stay on for another month or two, thereby creating host country tax and social security withholding requirements, and possibly immigration infringements too. ECA has also observed more ‘floating employees’ sent to work in countries where the employer has no registered entity and this potentially could create a corporate tax presence for the non-resident employer. To account for these risks and to keep pace with an internationally mobile workforce, companies need to rethink how they structure employment arrangements, policies and processes accordingly.

Important issues to consider include:

Contractual arrangements

When an employee is sent on a short-term assignment, the individual is typically issued with an 'assignment letter', or 'assignment agreement'. This letter outlines the benefits (allowances, reimbursements, etc) that the employee is entitled to receive during the period of assignment to the host entity. However, it is important to consider how any underlying employment contract, with the home company, interplays with the separate assignment letter. In general, an employee on a short-term assignment remains an employee of their home company during the length of the assignment, but with certain rights and benefits suspended/hibernated and replaced by relevant terms and conditions contained within an assignment letter. Hibernating a home country contract can, however, complicate potential dismissals as the home country contract has not been terminated, but will ‘spring back to life’ at the natural end of an assignment or once an assignment has been terminated. 

The role of an assignment letter (agreement)

Short-term assignments are highly complex. Hence, it is crucial to have proper documentation in place to clarify and provide guidance. An effective assignment letter not only benefits the employee, but also the employer (HR, legal, tax and payroll, for instance). The assignment letter should clearly spell out the compensation and benefits (per diems, reimbursements, serviced accommodation costs etc) that the employee would receive during the short-term assignment, thus making all parties aware of assignment entitlements and mitigating any dispute or retroactive negotiations in the future. 

An appropriately drafted assignment letter can also minimise potential financial or reputational risk for non-compliance and help mitigate potentially adverse corporate tax implications. So, it is important that the assignment letter documents the responsibilities of the home and host country companies if the economic employer principles discussed below are to be avoided. Hence, it should address such issues as:

• The assignment start and intended end date;
• The employee’s specific duties while on assignment;
• The employing entity while on assignment;
• To whom does the employee report while on assignment?
• Who determines the holidays and work hours of the employee?
• Who will be responsible for any disciplinary issues during the assignment? 
• Who can terminate the contractual arrangements entered into with the employee? 

How long an assignment is anticipated to last has an important bearing on immigration and tax compliance regulations. For example, in the United States, it is possible to exclude certain travel, meals and accommodation expenses from federal tax if an assignment is expected to last less than 12 months. However, should the assignment length change from less than one year to greater than one year, the expenses previously considered non-taxable would be deemed taxable from the date of the change in ‘intent’. Consequently, the anticipated or intended assignment duration should be supported through appropriate language in the assignment letter. 

The choice of language used in an assignment letter can also have implications for the taxability of certain allowances and benefits. For example, there is a distinction between an employee sent to Japan for business travel and one sent under a secondment arrangement. An employee ‘seconded’ on a short-term assignment to Japan cannot exempt income from taxation under the 183-day rule, whereas a ‘business traveller’ or ‘visitor’ can potentially do so based on facts and circumstances. An assignment/secondment agreement for employees sent to Japan for short-term projects should therefore use consistent terminology to qualify for the preferential tax treatment. 

Cost allocation

Who picks up the costs of a short-term assignment can be a source of much debate in many organisations when an employee is temporarily assigned to work in another country. This is because costs need to be borne in the correct location to ensure that the appropriate tax deductions can be claimed by the group. 

Consider the potential tax risks when an employee is being assigned internationally to another company within a group. Certain tax authorities adopt an ‘economic employer’ approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article (economic employer is discussed further here ). One of the conditions of Article 15 states that if the assignee’s salary and costs are recharged to the host entity, then the host country tax authority will treat the host entity as being the ‘economic employer’ and therefore the employer for the purposes of interpreting Article 15. In this case, tax relief would be denied and the employee would be subject to tax in the host country even if the individual spends less than 183 days there. Short-term assignments can also create a corporate tax liability in the host jurisdiction if cost allocation is not carefully managed.

To help minimise any unexpected tax surprises, it is advisable to put an agreement in place, which specifies how costs will be managed during an assignment. An inter-entity agreement should be drawn up between the host company and the assignee’s home company. This agreement governs how costs associated with the assignment will be funded. An inter-entity agreement is in addition to the assignment letter (agreement) between the employee and the home company.

Short-term assignments now take all shapes and forms, with short-term projects, weekly commuters, and extended business trips becoming more common. A written short-term policy can be a cost-effective tool as it provides discipline and a framework that enables equity of treatment amongst assignees and reduces the number of employees negotiating their own packages. It can set out logically the steps to be taken in any relocation and the procedures to be followed.

It is advisable that each category of short-term assignment be housed in a separate policy document, as there is a possibility that employees will attempt to leverage off the best parts of other packages to suit their particular circumstances. Additionally, a short-term policy should be regularly evaluated against the current industry trends as well as the company’s business goals to make sure it is fit for purpose.

The short-term policy should address the following key issues:

• Should any host country tax liability arise, will the assignee receive any tax assistance?
• Will the assignee be on the host country payroll, home country payroll, an international assignee payroll, or multiple payrolls?
• Will the assignee’s pay be protected from exchange rate volatility?
• What happens when short-term assignments are extended and change from one assignment category to another? 

Managing exceptions

Exceptions to policy can be difficult to manage, requiring negotiations between the mobility team, the assignee and the business line for approval. They can also be costly, triggering unaccounted-for expenses and untracked ‘budget creep’, the impact of which is rarely calculated or consolidated across the business functions. 

Exceptions should only be granted under very limited circumstances and require written explanations and approval of the executive board or HR director. If carefully monitored, the number of exception requests can indicate that a particular process or policy component requires re-design or further instruction to a vendor. 

To ensure global equity and minimise budget creep, consider: 

• Creating a detailed policy governance process for identifying and capturing deviations to policy or process with a view to reducing or eliminating exceptions;
• Setting up a centralised system to manage and approve exceptions to help minimise expenses;
• Establishing a process owner for short-term assignments, someone with responsibility and authority to monitor and report on trends in exceptions;
• Creating a formal short-term assignment policy, as mentioned above, to minimise exceptions and foster consistency and clear communications.

Tracking potential risks

Tax and immigration irregularities are common for employees on short-term assignments. Accordingly, it is important to develop an education programme for employees and their managers to inform them about the risks of cross-border work and the consequences of non-compliance. 

Work permit and immigration infringements should not be underestimated as the penalties for individuals working outside their home country without the appropriate work authorisation can be harsh. Not all short-term assignees need immigration approval, but then again, some do. It is important to note that just because an employee may not trigger any host country tax liability it doesn’t follow that they are exempt from immigration requirements. Indeed, staying on the home payroll is one of the most common areas of risk for short-term assignees and it is not an indication that immigration approval is not required.  

For many companies, technology has become the key to achieving and maintaining compliance. Without proper monitoring, an employer may unwittingly be exposed to tax and social security risks. Diligent tracking of short-term assignees and a solid process to be able to identify risks up-front are key to ensuring compliance. 

Source: ECA’s Managing Variety in International Mobility survey

Once a company’s short-term population reaches a certain size, manual tracking of policy exceptions using Excel spreadsheets is unlikely to be sufficient to ensure compliance with now greater information sharing among tax and immigration authorities. So, if companies want to be ahead of the curve in managing short-term assignees, they need to start tracking them. This will require communications to be established between the business units, tax, HR, legal, payroll, etc early in the assignment planning process, as well as when any assignment extension is contemplated.

Coordination with payroll 

At the heart of the administration process is the payroll team and it is essential that the appropriate home and host country payroll personnel are involved in planning for short-term assignments. They are ultimately responsible for ensuring the accurate and timely delivery of the assignment package to employees, while managing the local jurisdiction compliance requirements with regard to tax and social security withholding. 

The home country payroll must be informed of the intended assignment duration and assignment package to be paid to the employee. The home payroll will need to understand whether the allowances and benefits will or will not be considered taxable to the employee. 

Assignment income, such as a short-term allowance or per diems, is often paid through the home country payroll to comply with standard tax treaty rules. Typically, if income is to be exempt of host taxes, the payroll costs should not be borne by a permanent establishment in the host country. 

If an employee triggers a tax liability, many host countries will require withholding of income taxes through a local payroll. Consequently, the host country payroll will need to be informed of the assignment package the employee is receiving to understand if these may be considered taxable in the host country, even if they are not taxable in the home country. The host payroll will also need the relevant social security applications to be made to ensure that contributions are paid to the appropriate tax authorities. 

Our three-part series of articles on short-term assignments has highlighted some of the complexities in structuring short-term assignments, and some of the challenges concerning immigration, payroll reporting and tax compliance. With proper planning and administration, short-term assignments can be an effective and efficient means of increasing the pool of potential employees for the international assignment programme.

Our Consultancy & Advisory team can help you manage your short-term international assignees as effectively as possible, whether you are looking for assistance with the  design or review of existing policies , the creation of  assignment letters ,  assignment cost projections or other support.

ECA's Short-term Allowance Calculator provides a choice of regional bases on which to create consistent allowances in the host location, whatever the nationality of the assignee. Find out more about the Short-term Allowance Calculator here  or request a demo .

If you haven't already done so, read the first two articles of this three-part series on short-term international assignments:

• Key considerations when structuring short-term packages
• Compliance challenges involved with short-term assignments

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FAQ’s: Structuring of International Assignments

Faq’s: structuring of international assignments.

There are many ways of structuring an international assignment. Many companies develop a special policy in which the structures of international assignments are described, and the applicable labour conditions are defined. Although a wide variety can be recognised, there are five different ways: 1. The “home closing” setup. In this situation, the initial employment in the home country will be terminated and replaced by an employment agreement in the host country. 2. The “Secondment” setup. In this situation, the initial employment agreement in the home country remains in place. But the employee will be temporary seconded to an employer in the host country. Usually, but not necessary, this is a company that belongs to the same group of companies the home company also belongs. 3. The “suspend” setup. In this setup there are two different approaches:To the initial employment agreement in the home country, an agreement between the employee and the employer of the host country is added, by which the authority and control of the home company is temporarily transferred to the host company; – The initial employment agreement is temporarily put aside and replaced by a local employment agreement or assignment agreement. – The “split employer” setup. In this case, the employee will work at home as well as the home country for two different formal employers. 4. The employer-employee relationship is defined in two various employment agreements. This setup is also known as the “split salary” setup. Which setup is chosen depends on the company policies, day to day practices of the company and possibilities the legislation in home and host countries allows.

There is no general legislation on which elements should be part of any assignment agreement. In the day to day practice, the following subjects can be distinguished. These subjects can be, but are not limited to: – Arrangements regarding the necessary visa; – Arrangements regarding assignment salary and allowances and benefits (company car etc.); – Arrangements on salary raise, bonuses, stock options and other benefits; – Arrangements regarding applicable labour legislation; – Arrangements regarding maintaining home country social security and pension; – Arrangements on (additional) insurances; – Arrangement regarding taxes on income payments and tax filing obligations and support; – Arrangements on return to home country guarantees; – All kind of practicalities, like move costs, house and school search housing costs, schooling costs for accompanying children, home visit costs.

There are three different situations: 1. The home and host country both belong to the EU (and Switzerland, Liechtenstein and Norway). In these countries, the EU a treaty on social security is applicable. This treaty determines which system of social security in which case is appropriate and consequently where contributions will have to be paid. Normally, the home country system can be maintained in case the assignment does not last longer than 24 months (which can be extended to 60 months); the employee is not replacing a former seconded employee, and the employee was part of the system of social security in the home country for at least one month. In such cases, the employer can file an application to the social security authorities for the so-called A1 statement. Please, note that under this agreement, it is not possible to maintain the home country system of social security for accompanying family members! It neither applies to the costs for medical expenses! Contributions and premiums will have to be paid in the home country. 2. The home and host country have agreed on a bi-lateral agreement on social security. It works the same as the EU method. However, every bi-lateral treaty has its own articles on applicable legislation, accompanying family members, duration and application procedures. The approval that the home system remains applicable is laid down in a Certificate of Coverage. Contributions and premiums will have to be paid in the home country. 3. The home and host country do not belong to the EU (and Switzerland, Liechtenstein and Norway) and do not have a bi-lateral agreement. In such cases, it might be possible to enter home country voluntary social security insurances. It usually offers a comparable home country level of social security. Premiums for these insurances will have to be paid in the home country, but it does not touch the obligation also to pay contributions to social security in the home country. It leads to double premiums and higher costs.

It depends. In some countries pension is part of the system of social security. In others, like The Netherlands, it is not. Focusing on the Netherlands, the company pension is part of the labour conditions and the state pension (“AOW”) is part of the social security system. The state pension part, therefore, is arranged in the EU treaty or bi-lateral agreements. The company pension is not. It is crucial to check the existing company pension agreement of the employer with the pension company. And if it is possible to maintain the accrual of pension entitlements during an international assignment of any nature.

In most cases, the answer is “yes” because most home country insurances only reimburse these costs up to the home country level. In other countries, these costs can be much higher, and limiting conditions are applicable. Professional advice is necessary to avoid unpleasant surprises.

The experts of EMG have extensive knowledge of international social security situations and legislation and have access to a database with existing EU and bi-lateral agreements on social security. Next to that, EMG has an extensive network of specialists in all countries where professional advice can be taken on these matters, including insurances on medical expenses.

Want to know more about the unique advantages of partnering with EMG?  Contact us or let us contact you!

2347654 - Global Assignment: Host Country Address Type - Employee Central

In b1605, you can now add an employment-specific address for an employee on a Global Assignment. It is now possible to maintain Home and Host address information for employees on Global Assignment.

Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental.

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SAP SuccessFactors Employee Central

Global Assignment, Host Address, ECT-35902, Host Country Address, Address Type, address-type , KBA , LOD-SF-EC-GA , Global Assignment , How To

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International Human Resource Management

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• Dirk Morschett ,
• Hanna Schramm-Klein &
• Joachim Zentes  

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Human resources are among the most critical success factors of international management. Human resource management (HRM) in a MNC faces challenges that are far beyond those of purely domestic operations. For example, it needs to manage expatriate assignments and is confronted with intercultural issues. This Chapter explains the basic activities, models and particularities of international HRM.

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Morschett, D., Schramm-Klein, H., Zentes, J. (2010). International Human Resource Management. In: Strategic International Management. Gabler. https://doi.org/10.1007/978-3-8349-6331-4_20

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