How much flexibility with benefits should you give to international assignees? Rob Hyde reports.

No one likes being told what to do all the time, and expatriate workers are clearly no exception, but the burning question now thrust upon the table is, just how far should HR staff try to avoid this by shifting to the other extreme and awarding their overseas employees too-high levels of freedom through flexible benefits.

Until very recently, most HR staff operated a rather rigid company policy on compensation packages for their expatriate workers.

This often led to friction, as the overseas workers saw themselves forced to abide by what they viewed as unnecessary and unhelpful restrictions imposed on them by people with little grasp of life and working conditions in the foreign country they were being sent to.

However, within recent years, a fresher, more liberal approach has risen to prominence, with companies offering expats 'flexible' compensation package.

About time too, says Senior Reward Manager Gerard Hockridge from the London office of Deloitte & Touche.

"It's all about making the workers feel valued. Families should not just be viewed as numbers and viewed in comparison to a '2.4 percent kids' role model; they have individual needs and concerns.

"The expatriate workers are often parents, so they should be treated like adults and given options."

"If a couple are moving around the world regularly, then they might consider it more beneficial for their child if they are able to home-educate them as opposed to having to send them through several school systems, cope with all the paperwork and education fees, and instead spend the money on educational material such as books or CD ROMs.

"Moreover, from a Human Resources point of view, companies should also view this as a chance not just to appease workers with apparent 'freebies' or incentives, but as a strategic way of saving cash.

After all, why spend money making workers do something they don't want to, when money can often be saved by allowing them to spend it in areas they see fit."

However, though largely in favour of a less fixed policy, Hockridge admits that an increase in the freedom offered to expatriate workers not only means a massive increase in HR administration, but could also lead a to a well-meant scheme being abused.

"There is no denying that a picky-choosy system makes for a bureaucratic nightmare if there are no general guidelines, but that is the secret to the whole issue."

"I could write you up a really good compensation package policy for expatriate workers within a relatively short space of time which would sound new and exciting and fantastic and very tolerant, but would ultimately be almost impossible to regulate."

According to Hockridge, the "sensible approach" is to listen to ex-pats and workers describe how they would prefer to spend their money and then to allow them to do this, without however compromising on certain issues.

"For an expatriate worker in China to say he would prefer not to be chauffeur-driven, and would prefer instead to use the money to extend his holiday, then this would clearly be an area where money is ultimately being spent unnecessarily and should therefore be reviewed for the benefit of both company and employee."

"However, companies should flatly refuse certain requests. All workers in India should be accompanied by a driver for security reasons."

"Similarly, I think cultural training for the expatriate workers, even if it be only two or three days, is absolutely essential."

"Occasionally you do get some expatriates claiming they need membership costs for expatriate clubs to ensure a social life, but if all employees begin requesting this the situation becomes stupid - you are essentially being asked to fund a swimming pool and a pool attendant. It's quite ridiculous".

However, Hockridge says that as long as the request can be reasonably justified, then supposedly ridiculous demands also deserve to be properly considered.

"We had workers in Vietnam who wanted satellite TV, which sounds like a luxury, but when you consider that they literally have very, very limited access otherwise to their own language and culture, to ask to be able to watch a bit of TV in their native tongue, it's really not all that much, and I think money well spent".

"There are of course some old tricks which keep coming up, but as most major companies try to 'cherry pick' the policies of others, it's easy to soon cotton on to the con artists."

More apparent risks, according to other compensation specialists lie in the fact that the many expats, delighted with their supposed newfound freedom, will overlook other essentials such as paying tax.

However, even if it is the expats who forget to do this, the blame should at every stage be attributed to the employer, says Deloitte & Touche's Amsterdam-based compensation and benefits specialist, Johan Flohr.

He says: "The danger is not the freedom but the tax laws, and it is HR'S responsibility to make sure that the compensation plan is structured in the most financial and tax efficient way, and not always to just take the employee's word for things."

"Many employees who think they run little risk of getting caught working black will happily dodge tax and thus put their employers in danger of a massive fine."

"But in the same respect, expat workers should also try and be realistic and not just be flattered by the idea of freedom, as sometimes the practical gains are not necessarily better".

"Opting for a cash bonus means you are responsible for paying tax yourself."

"Also, opting for a lower wage and longer holidays may mean the amount you earn is not enough to pay national insurance, so that pension schemes are also not possible."