Definition of expatriate A person who is currently living and well established in a foreign country but will be hired by another

foreign country is considered an expatriate. The laws of some countries enforce some benefits for an expatriate, but even if one is not formally considered an expatriate, which benefits can one reasonably expect from the company. For instance, what kind of expenses is usually required and for how long should these expenses be paid by the company.

What Does Repatriation Mean The process of converting a foreign currency into the currency of one's own country. The amount that the investor will receive depends on the exchange rate between the two currencies being traded at the settlement time.

Definition
Capital flow from a foreign country to the country of origin. This usually refers to returning returns on a foreign investment in the case of a corporation, or transferring foreign earnings home in the case of an individual

Example For example, if you are American, converting British pounds back to U.S. dollars is an example of repatriation. If the pound were held by a British financial institution, the dollars would be called eurodollars, therefore, when converting those eurodollars back to dollars, the investor would be exposed to foreign exchange risk

Negotiating Expatriate Packages

Very few people want extended work abroad just for the experience. However, more global companies than ever now expect their talent pool to have international experience as a prerequisite for promotions into the highest levels of the company. Because companies recognize the reticence of employees to go abroad for "possible future consideration", they usually offer some form of financial incentive to those willing to consider relocation for periods of 2 - 3 years. Expatriate assignments can challenge both the employee and his/her family. Companies recognize this challenge and compensate their expatriates. Expectations for the expatriate incentive package run very high. Individuals may know of other expatriates (who bought a large house or a nice cottage upon their return from a foreign assignment). We know of a senior technician, who was considering a six-month assignment to Mexico, hoping that he could take early retirement upon his return! Managing employee expectations is the responsibility of Human Resources professionals. Their responsibility is to balance the genuine need for good salary and benefits for individuals, with the financial needs of the corporations. Their responsibility to the individual and the company means designing expatriate assignments to be win-win situations for the company and the individual, both short-term and

long-term. Here are some things to expect from expatriate packages. Direct Compensation Salary increases should take into consideration two factors at the same time -- changes in the cost of living and increases due to changes in experience and/or responsibilities - and equitable compensation plans take both aspects into consideration. In the case of expatriate assignments, both changes can be drastic: Foreign assignments often include a significant increase in responsibility. For example, managing a plant of outside the home country is a significantly greater responsibility than managing one in the home country, because of the more restricted access to corporate support and of the cultural challenges. Living in or near any large South American city is likely to be much more expensive than in a smaller or outlying city.

Insightful Human Resources professionals plan to give expatriates two separate figures, one for the change in cost of living and one for the change in responsibilities. This simplifies expatriate package negotiations in several respects: It improves consistency when a corporation sends people to different countries with widely different costs of living and helps prevent comments like: "Maria went to Buenos Aires two years ago and her salary was doubled. Why is mine increasing only by 20%?" It also helps prepare expatriates for their return to the home country. Companies find it easier to remove the adjustment made for the change in cost of living if it is explicitly separated from the salary than if it is part of one's salary. This helps prevent expatriates from feeling demoted upon their return to the home country because their salary was decreased significantly.

Note that cost of living adjustments should be based on the expatriate life style rather than the life style of locals. For example, expatriates living in some developing countries find that food and lodging is relatively inexpensive, while international telephone charges are very high. Given the amount of money that most expatriates spend on telephone, this may make the new place less affordable after all. Benefits Because of their very different situations and needs, the benefits offered to expatriates generally go beyond the benefits offered to other employees. Many companies offer benefits in the areas of taxation, moving, accommodations, visa, immigration, and language training. Other benefits that are less commonly offered can significantly ease expatriate package negotiations: Cross-cultural training helps manage expatriates' expectations. By learning more about their future lives, they can understand better what will be important to them in their assigned destination. They can also calibrate their expectations versus the experience of other expatriates in that destination. For example, some expatriates are asking to live in very large houses in cities where such accommodations simply do not exist. On the professional side, they may expect to achieve objectives that may be essentially unrealistic in their new context; in this case, they may expect rewards that may never come. Family benefits: It is critical to keep in mind the fact that the whole family is affected, and particularly the spouse. Family adjustment and lifestyle issues are the leading causes of early return [1]. Support and financial help in finding adequate schooling for the expatriate's children is often a prerequisite for the family to accept the assignment. In the case of dual-career families, recognition for the spouse's efforts can come in several forms: o Helping the spouse obtain a work visa and a job. o Helping him/her find suitable unpaid activities (studies, volunteer work in non-profit associations, or hobbies) when local immigration laws preventing him/her from receiving a salary. This can be done through dedicated career counseling.

o Compensating the spouse for his/her loss of income. Career counseling: Providing career coaching / mentoring to them throughout their assignment, and particularly during the first and last six months of their assignment, and after they return to the home office helps them ensure that both they and the organization reap the benefits of their newly-acquired experience. It also helps manage their expectations for their subsequent assignments - some expatriates come back to their home country hoping that they will hold far more senior positions than they should realistically hope for. Repatriation training: Expatriate families and employees benefit from repatriation training to help readjust to living in the home country and returning to the original work environment. Length of the training often depends on the length of the assignment and the ages of the children. Reassignment: If the leading motivator of the expatriate is the long-term career aspect, the company needs to provide a challenging assignment upon return to the home office or shortly thereafter. If this is not feasible, communication about future plans for such an assignment and the timing needs to come from a mentor or senior manager or the company risks losing its entire investment to turnover of returning expatriates.

One size does not fit all expatriate packages. A young, single engineer who is going to work on an oil extraction platform in Indonesia has very different expectations and needs compared with a senior, married-with-teenage-children manager who is going to start and lead a plant in Spain. A significant degree of flexibility should be provided to both to be able to design packages that suit their own needs within a given budget - just like flexible health benefit plans. Seeking external advice In many cases, neither the expatriate nor the HR manager has gone through an expatriate assignment. As a result, their understanding of what the expatriate and his/her family will need in the assigned destination may be significantly off. Seeking informal advice from other expatriates or obtaining formal advice from consulting firms specialized in setting up expatriate packages may help ensure that the most important needs of prospective expatriates are addressed. References [1] "Global Relocation Trends: Surveying the State of International Relocations", International HR Journal, Winter 1997.

Repatriation Management
Despite ongoing concerns about high expatriate attrition rates companies do not seem to be paying a lot of attention to the repatriation phase. A similar observation can be made in HRM journals; whereas expatriation has been researched extensively during the last decades, repatriation has received scarce attention in literature. The purpose of this article is, therefore, to highlight the relevance of repatriation management in the earliest stages of expatriate management. Recent research indicates that successful expatriation assignments rely on four elements: the selection of the candidates, pre-arrival preparation for both expatriate and family, the provided support and possibility to keep in touch with the home organization while on an expatriate assignment, and the repatriation arrangements after completion of the assignment (Baruch and Altman, 2002). That appropriate attention to repatriation arrangements is important follows out of various observations: (1) Valuable personnel frequently leave the organization relatively shortly after repatriation. Research findings from 2002 showed that about 50% of personnel left a financial services company within a few years following the return to their home country (Baruch & Altman, 2002). As well, it has been found that 30% to 40% of expatriates leave their companies within two years of repatriation compared to 5-10% of non-expatriate employees. (2) More than 30% of overseas assignments fail, resulting in similar premature return rates of expatriates. Expatriate failure rates are generally unrelated to aspects of functioning that were relevant in domestic organizational settings. Although a lengthy discussion of underlying reasons for expatriate failure is unfortunately out of scope for this article, it can be argued that companies benefit from managing this repatriation process in order to exploit the knowledge and skills of returning expatriates. (3) High attrition rates have been found to be primarily related to organizations difficulties to effectively reposition their repatriated employees. This

observation is a strong argument to stress repatriation management in HR departments. (4) Organizations may experience difficulties in finding candidates for expatriate positions when potential candidates see what will happen to expatriates once they return. (5) Ogberg, who coined the term culture shock in 1960, also considered a reverse culture shock that expatriates experience when returning home. Proper preparation for this future shock may prepare expatriates for the transition to domestic work and family settings. (5) Research in 2005 showed that repatriation adjustment was the strongest predictor of intent to leave the organization (Lee & Liu, 2005). Retention and career management, therefore, should be central to planning expatriate positions. Positions should be gradually more challenging in order to challenge valuable employees and be part of a long term career path. Long term career planning foresees in building on previous assignments; assigning repatriates unchallenging positions once back home may be regarded as an invitation to apply for positions elsewhere. Sound expatriate management will therefore consider repatriation arrangements as good practice. In reality, however, organizations often seem to have forgotten who these expatriates are. HR departments fail to build on expatriates skills and experience because they do not know well what they have accomplished during the years. Expatriates experience frustration once their expatriate benefits and status will be lost upon repatriation. They will have to get used to normal levels of pay and taxation again. Their children will have to attend national curriculum schools, private school tuition fees will not be covered upon return to the home country. Establishing a mutual understanding and a clear definition of successful repatriation could help repatriates establish correct expectations before returning home. A proper preparation towards the end of expatriate assignments may ease the transition and avoid costly turnover for the organization. An ongoing lack of attention to repatriation management will likely continue to fuel high attrition rates. The question is: do we really want valuable personnel to leave the organization after costly assignments abroad or should we take action? Dr. B.J.L. van den Anker received his PhD in Business and Management from the International Graduate School of Business of the University of South Australia. Dr. van den Anker hails from the Netherlands and has extensive experience living and working in SE Asia. His (I)HRM and cross-cultural consultancy assignments focus primarily on western-Asian contexts. He can be contacted at ben@vdanker.com. References Baruch, Y. and Altman, Y. (2002). Expatriation and repatriation in MNC: A Taxonomy. Human Resource Management, 41(2), 239-259. Lee, H. and Liu, C. (2005). An examination of factors affecting repatriates turnover intentions. International Journal of Manpower, 28(2), 122-134.

Expatriate benefits
Expatriate salaries and benefits

Since very few employers like the idea of being sent abroad for a limited time, many companies offer special expatriate benefits and other financial incentives for those who are willing to relocate. In many cases, the assignment abroad is accompanied by a significant salary increase. So many expatriates receive expatriate salaries that are considerably higher than the salaries the earnt at home. In addition, they normally also receive a considerable amount of expatriate benefits. When evaluating expatriate salaries, it is important to remember that salary increases represent not only an incentive for overcoming the problems of moving abroad, but also usually reflect a significant increase in responsibility assigned to the employee. Expatriates working abroad normally have less corporate support than at home and often have to take more decisions on their own.

Expatriate salaries and benefits also reflect the higher cost of living abroad. Besides direct relocation costs, many expatriates have to pay for additional expenses abroad, eg. private education for children or health insurance, as well as travel home. In addition, many major expatriate destinations like Paris, London, Dubai or Hong Kong are often as expensive (or more) expensive than home. When evaluating expatriate salaries, companies should clearly communicate which part of a salary increase reflects an increase in responsibility and which part reflect the different cost of living. This makes it easier to justify different expatriate packages for different employees and also prepares expatriates for potential salary decreases upon the return to their home country. Of course, the cost of living should be adapted to the special needs of expatriates instead of locals, and there are quite a few companies providing comparison data to make a sound judgement on those. Expatriate benefits Most expatriates receive a range of benefits that goes significantly beyond the benefits of other employees. These expatriate benefits reflect the special situation of expatriates and often include the following:

Relocation benefits: Besides covering the cost of the actual move, relocation benefits often cover special assistance abroad, i.e. through a relocation agent. Accommodation benefits: If accommodation costs are significantly higher in the destination country, most companies pay their expatriates special benefits or provide subsidized or free housing. Besides financial incentives, direct help to find accommodation is appreciated by most expatriates, since the search for accommodation is generally on of the most stressful and time-consuming challenges of the move.

Language training: Expatriate benefits for language training not only increase the professional capabilities of expatriates sent abroad, but also help them integrate better in their new environment. Ideally, the language training should start well in advance of the relocation. Expatriate family benefits: When sending expatriates abroad, it is important to remember that the relocation affects the whole family, especially the spouse. Family problems are therefore one of the most common reason for expatriates to break off their assignment earlier than planned. To ease the family relocation and tensions that go along with moving abroad, companies often offer support and financial help in finding schooling for kids. If the expatriates spouse has been working before, some companies may also help them obtain a work visa and a job to compensate for potential loss of income. Non-working expatriate spouses might receive help in finding unpaid activities (such as volunteer work or studies). Expatriate training and counselling: Although these are less common, training and counselling are an important part of expatriate benefits. Before departure, expatriates should receive cross-cultural training to help prepare for the challenges abroad. After their assignment abroad, expatriates could receive repatriation assistance to help them readjust back home. Since the move back is often even more challenging than the move abroad, many companies try to provide a challenging assignment upon return.

In general, expatriate packages and expatriate benefits tend to be adapted to the individual situation and assignment of each expatriate. A young single graduate going abroad will face different challenges on his move abroad than a senior manager with family and children. In addition, the expatriate destination also has a significant impact on the expats situation. While some countries like China and the United Arab Emirates are often regarded as hard destinations, Western European countries such as Spain or Germany are often viewed as easier destinations to adapt to. This is also reflected in expatriates salaries and benefits: The more difficult the destination is perceived by expatriates, the financial incentives and expatriate benefits on offer tend to be more attractive.

Benefits
ShareThis Member Comments By CIGNA International Expatriate Benefits

Despite mounting world tensions, companies continue to send their employees to operate in other countries for extended periods of time. For many organisations, preparing and supporting expatriate workforce represents an important investment of company resources. In fact, the stakes are high for all involved. For employees, such an assignment is often viewed as an opportunity, yet they must also contend with unfamiliar surroundings and cultural adjustments that can be particularly challenging.

For the employer, providing ongoing support for an expatriate worker involves many judgment calls. Handling employees' personal safety and well being while they are on assignment can be problematic without established policies that also adhere to local employment laws and practices. MAKING THE RIGHT CHOICES Identifying an approach to expatriate benefits that works well both for the company and its employees is critically important. Before deciding on an approach for your organisation, a key decision must be made: Will you handle expatriate benefits in-house or with the assistance of a third party expert? Achieving consensus on this point takes time. Expatriate benefits decisions rarely fall under the responsibility of a single individual. Finance, human resources and business unit leaders often have strong and varied opinions. In addition, the demands of the expatriate employees themselves must be taken into account. Often the origins of problems with international assignments can be traced back to program design and its inability to address specific needs of international employees. These occasional disconnects continue to play out even today. In a recent study of more than 700 expatriate workers around the world, nearly 40 percent felt their employers did not do an adequate job preparing them for their international assignment. The 2002 study was conducted by CIGNA International Expatriate Benefits, a business unit of CIGNA International; the National Foreign Trade Council which supports open international trade and investment; and WorldatWork, the leading global rewards association focused on attracting, retaining and motivating employees. Additionally, 55 percent of those surveyed said that a lack of information about finding appropriate health care locally as well as what to do in a medical emergency or security crisis was detrimental to their peace of mind and performance on the job. Yet despite recent volatile world events, 74 percent saw no change in their likelihood of accepting another international assignment if the opportunity arose. HANDLING BENEFITS IN-HOUSE Developing the right expatriate benefits plan requires that companies first come to terms with whether they can meet the needs of these employees in-house. In these situations, there are three possible arrangements: The first involves total in-house support where claims are submitted to the company, which, in turn, settles any claims with the employee. A second option involves a combined solution where employees are covered by a home-country plan and can claim any shortfalls back from their employer. The third option involves a hybrid multi-local, where employees are enrolled in a host-country plan and can claim back any shortfalls through the company as well.

Home or host country plans can take on various forms. Such plans can range from private insurance to coverage provided by the State. Levels of employer support can vary as well. In some instances, an employer may go with whatever coverage is available without offering supplemental coverage. In other instances, the employer may want to provide supplemental coverage in the event the employee faced unforeseen incremental costs.