Expatriates Benefits

Case 1: Jenkins Goes Abroad Jenkins Consulting is a national firm that helps companies improve their performance and effectiveness by advising on all aspects of business management and operations. Companies hire consultants from Jenkins Consulting for a variety of projects such as assisting with company-wide cost reduction initiatives or revenue growth initiatives, improving supply-chain management, and/or improving individual departments such as information technology. Jenkins employs consultants in 200 offices across the United States and will soon expand its operations internationally.A company located in the United Kingdom has hired Jenkins for a major project that will be based at the company’s headquarters in London. Jenkins will assist the company with an organization-wide effort to restructure and reposition the company to succeed in a more competitive market.

To complete this project, Jenkins will assign five full-time consultants for a period of approximately two years. Because of the significant time commitment, Jenkins has decided to relocate the selected consultants to the United Kingdom for the duration of the project. Dale Kugar, the human resource director at Jenkins, must prepare to transition the consultants to the new assignment. This is the company’s first exposure to expatriate management, and Dale needs to ensure that the consultants who move to the United Kingdom for the project are compensated appropriately. His intention is to have the consultants maintain their current benefits, including health care insurance, retirement savings, and paid time off. However, he must make a recommendation on any changes to each consultant’s salary.

Dale has a few concerns as he prepares his recommendation. First, the United Kingdom is currently experiencing a high level of inflation. The value of the American dollar compared to the British pound is low. That is, the consultant’s U.S. salary will not have the same purchasing power in the United Kingdom as it does at home. He is also concerned about the consultants’ interest in taking on the international assignment. Some of the consultants he spoke to about the assignment are concerned about the impact the assignment will have on their career. Because this is Jenkins’ first international experience, the consultants are concerned that being out of the country for two years may affect their future career opportunities because they will not have regular interactions with the firm partners who make decisions on promotions. These concerns weigh heavily on Dale’s mind as he starts to draft his recommendation.Questions:13-6. How should Dale approach the determination of the consultant’s salaries as expatriates?13-7. Should Jenkins offer any incentive compensation or additional benefits to the expatriates? Why or why not?

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