Analyzing and Managing Expatriates

Managing Expatriates Chief Executive Officer (CEO) Dear Sir/Madam, A comprehensive international compensation package ought to take into account all elements in order to ensure that there is employee satisfaction. The system of compensation that is proposed for the 10 expatriates is the combination of the build-up approach and the cost of living allowance (COLA) approach. The buildup salary method employs the prevailing home salary as the base for calculating the expatriate package.

The latter approach employs the principle of maintaining the home salary of the expatriate and reimbursing an extra separate allowance, largely for cost of living, but also for hardship centered on the dissimilarities for home locality and the host locality (Auzini and Tjakraatmadja, 2012). The compensation package that the employees will receive will also encompass benefits. Benefits and compensation is vital for delineating a remarkable package that is appealing to decline partaking in the assignment in Mexico.

The benefits will encompass the initial coverage from health to the expatriates' time off, for instance personal time-off incentive (PTO), whereas, the expatriates' compensation will be more compensatory to encompass monetary costs or additional spending. The proposed formula is as follows: TC = BS + COLA + HA + AC + TA + EC In this case, TC is the total compensation that the expatriate will receive. Base Salary is given as $80,000. The Cost of Living Allowance (COLA) is included so as to sustain the purchasing power of the ten expatriates assigned to work in Mexico.

According to Numbeo (2016), the cost of living in Mexico is 53.76% lower compared to the United States. Hardship Allowance (HA) is proposed to recompense for factors linked to challenging living conditions in the host nation, which is Mexico, environmental disorders which are quite dissimilar from the home nation and troublesomeness condition to personnel and families as a result of the assignment. In this case, the HA of the expatriates will be $10,000 annually (Auzini and Tjakraatmadja, 2012).

Accommodation or housing allowance (AC) will be handed to the personnel based on the expense of renting a furnished housing establishment in Mexico in a good, safe and quality region. According to Numbeo (2016), the monthly pay rent is roughly $564, which makes it $6,768 annually. Transportation Allowance (TA) will be handed to the expatriates to reimburse costs linked with transportation expenses in Mexico. This allowance will be $25,000 annually for the expatriate to be given a car for travelling around the host nation during the assignment.

Lastly, there is educational allowance (EA), which will be provided only for the children of the personnel, which is granted to offer compensation for the difference in cost between America and Mexico. However, in this case, educational allowance will be zero for the reason that the cost of education in the host nation is lower compared to the home nation. Therefore, in total, the annual compensation for each of the expatriates who will be given assignment.