Multiple Country Compensation Programs

GETTING TO KNOW THE STAKEHOLDERS INVOLVED

In this course we'll be using various terms for individuals who work for an organization outside the headquarters' country. These terms will be the basis of discussion for the rest of the course. So, let's start off with an exercise that helps explain the differences.

Global Mobility Program terms to know:

Third Country National (TCN): A citizen of one country who is employed by a company headquartered in a second country to work in a third country under a global mobility program. It is increasingly common to refer to these employees as expatriates as well. Note that for European Union (EU) members transferring within the EU, the concept of TCN generally is not applicable. For example, if a German citizen is on assignment in Italy for an employer based in Spain, they are not considered a TCN. It is common to refer to these employees as seconded.

Local National: An employee hired by a local subsidiary or branch in the country of operation and typically a national or citizen of that country. A global mobility program would not apply to these employees and they would have their own local national compensation and benefits program.

Expatriate: An employee who has been assigned to a foreign country for a period of time, typically greater than one year but less than five years and managed under a global mobility program.

Inpatriate: An employee transferred to the home country headquarters of a multinational organization from a foreign subsidiary.

Global Nomad: An employee who has made a career working outside of his/her home country and typically has had multiple long-term international assignments. Many times, these employees are managed in special benefit programs designed for globally mobile employees.

International Assignee: Employees assigned to work outside of their home country on a global mobility package.

Global Mobility Program: A program designed to manage a globally mobile workforce through international assignments such as business travel, short-term assignment, expatriate assignment, and localized assignment.

Headquarters Country: The country where the center of operations or administration of a particular employer is located.

Host Country: The nation in which employees of an organization headquartered in another country are working as the result of government invitation and/or international agreement.

Home Country: An individual's normal country of employment either by citizenship, permanent residence, or tax-basis domicile.

Example #1: Express Deliveries, Inc.

You are the Marketing Director for Express Deliveries, Inc. You work in the company's main office in New York and supervise three employees: Shirley, Tom, and Maggie. They are all Product Managers who work in the London office.

• Maggie has lived in England since birth. She was hired by Express Deliveries' London office five years ago in an entry level position. She started working for you six months ago.

• Tom started working for Express Deliveries since he graduated from Emory University in Atlanta twelve years ago. He worked in New York up until last year when he took a two- to three-year assignment in the London office. Tom's assignment will end in 18 months.

• Shirley started working at Express Deliveries' office in Bangkok, Thailand, 5 years ago and is a Thai citizen. Shirley was transferred from Bangkok to London four years later.

How do these terms apply to the individuals in this scenario?

Local National – Maggie is the only one of your employees who is employed locally by the host office.

Expatriate – Tom usually works in his home country (U.S.), which is also the headquarters, but is currently working in another country (England) on a two- to three-year assignment.

Third Country National – Shirley is from one country (Thailand), is employed by a company based in another country the (U.S.), and works in a third country (England).

Headquarters office – New York. The company's main office is located in New York (U.S.).

Home country – Maggie/England; Shirley/Thailand; Tom/U.S. The home country is relative to the individual.

Host country – England is the "host" country to the U.S. based company.

Example #2: Global Publishing

Jack was hired by Global Publishing eight years ago as a graphic designer in the company's headquarters office in Brussels, Belgium and is a Belgian citizen. Four years ago, Jack was transferred to the company's office in Rio De Janeiro, Brazil. Jack did such a great job that when Global Publishing opened a new office in Montreal, Canada, Jack was transferred again. Jack is currently working in Montreal but will be moving back to Brussels when his expatriate assignment ends in 2 months.

Headquarters office – Brussels (This was true for Jack both while working in Rio de Janeiro and Montreal)

Home country – Brussels, Belgium (Jack's home country)

Host office – Rio de Janeiro and Montreal, Canada

Expatriate – Jack is considered to be an expatriate.

Local National – While working in Brussels