How does global mobility experience translate into compensation?

Frequently when we talk about Return on Investment (ROI) in global mobility, we are talking about how to assess the degree of value versus the cost of an international assignment or relocation. Calculating a specific ROI for each employee has been referred to as the holy grail of global mobility. The investment aspect is frequently pretty straightforward, but the "return" can be quite a challenge to pinpoint. 

In trying to calculate the return, the debate frequently gets complicated. Companies have to consider a wide variety of realized outcomes, determining if objectives have been met, how well these objectives have been met, and looking at developmental impacts on employees and staff. Each time, the equation is made up of different numbers, not to mention the difficulty of even assigning specific metrics and values to outcomes. 

A well managed global compensation collection program can make the investment assessment very accurate and compliant. But overall, the ROI is a mix of art and science that balances qualitative and quantitative data to estimate the value of the investment. Another measurement challenge for mobility programs is determining how the relocation or assignment  also impacted retention, succession, and other performance related metrics, all of which would elevate the "return".

But from a different viewpoint, that of the expatriate, there is much for them to consider as it relates to the return on their own investment and the impact of their sweat equity. This is on top of the impact on their family, their career, and their overall compensation. Working abroad provides invaluable experiences that can enhance knowledge and elevate nuanced skills, along with providing key organizational knowledge and new relationships. However, this new research from Wharton professors delves into the complicated relationship between moving to another country and the expatriate's compensation. 

So, does international experience ultimately lead to financial benefits for the expatriate employee? Sometimes. Overall, the answer depends on a few things. The study reveals that individuals who relocate once or twice across countries tend to experience a significant reduction in their pay. However, a distinct turning point emerges with further international relocations, where financial benefits start to accumulate. 

Notably, those who have made more than four international moves — which the authors call “superglobals” — witness a substantial boost in their earnings. This finding underscores the notion that sustained global mobility can significantly enhance a worker’s value to employers.

While compensation may be lower on the list of reasons for taking a global assignment, compensation does matter to most and is a symbol of achievement and career success. It is the currency of appreciation and respect that plays into job satisfaction and reinforces engagement. At the same time, the challenges of moving abroad and then returning can also lead to distraction, reduced performance, and disengagement. These can negatively impact long-term compensation, according to the authors.  

On the flip side, working in diverse countries provides workers with a deeper understanding of foreign business practices, political structures, and cultural norms. The exposure to varied professional networks enriches their competencies, fostering adaptability and cross-cultural awareness.

Ultimately, for the "superglobals" it pays off in a big way. If an expatriate can show that they have a lot of global experience and a track record of successes, they can command large salary premiums as there are a very small pool of these people. 

For more on this topic, try this: KEY INSIGHTS FROM EMPLOYEE SURVEYS: UNDERSTANDING THE IMPACT OF INTERNATIONAL ASSIGNMENTS ON CAREERS