Erin Newell
Human Resources
Hardship Payments
I think the issue of hardship payments and operations in “difficult countries” go hand in hand. I believe it is fully necessary to compensate employees appropriately according to the measure and difficulty of the task at hand. In this case, an employee being sent abroad to a foreign country in order to benefit his company should definitely be paid accordingly, that being hardship payments. Hardship payments are given out by a company to employees as compensation for adverse living conditions in the host country. Therefore, by sending employees to do business in difficult countries, giving employees hardship payments is a definite must in my opinion. Employees need incentive to want to move to the host country, as well as incentive to perform their job accordingly even under adverse living conditions. However, if a company is willing to cut costs by not offering hardship pay, one option is hiring managers from the potential country as opposed to sending out employees. There are many benefits to this alternative, not only does it cut costs but there are also other benefits that can be obtained from this. When hiring managers from the potential country, the company can look at other things such as cultural traits. This would cut the language barrier, as well other potent cultural blockages that one who is not from the country may experience. Other than cutting out cultural differences, companies may also look at the fact that by hiring someone from the country they may not be obligated to pay as much as they would when sending someone to the country(not only including hardship payments). For example, in most cases wages are highly differentiated from country to country, and in this case by hiring someone within the difficult country companies will most likely be looking at lower wages. Moreover, when hiring managers from within the country they can cut costs by not offering hardship payments as well as lowering wages and also by cutting out cultural differences. However, there are also some disadvantages to hiring within the country as well. For example, the skill set needed for the position may be hard to come by in the difficult country. Another factor to consider is that when hiring within the country the individual may not be accustomed to such systems and methods as is the company, therefore they would be entitled to perhaps a lot of training-this in turn could turn costly.
That being said, there are also some benefits and disadvantages to sending managers from the company to lead in operations in the difficult country. As stated earlier, although necessary it is a disadvantage to the company to have the extra expense of hardship pay. Also, something a company would need to consider when sending employees to a different country to manage is specific preparation. The company needs to make sure the employee is fully enabled to face the challenges and different cultural barriers they may face when entering and managing the difficult country. This in turn may be time consuming as well as costly. To add to this, it would also be important to make sure the employee has the adequate skill level to operate at a lower standard with less means than previously required. While there may be several disadvantages to this option of sending the manager to the host county, there are also some benefits to be seen. For example, although the training and screening process may be long and cumbersome, when compared to the barriers faced with hiring within the country this may be the better alternative. To explain further, it would be safe to say that the employee that has already been with the company has a better feel for the terms and regulations of the business and how it is operated as opposed to the new employee who would be hired from within the difficult country.
Lastly, it is important to determine if paying the hardship payment is to the well being of the company, or if it is more important to cut costs by hiring from within. From a personal opinion, I see it fit to first weigh the option of either hiring from within or sending your own employees to the host country. I think it is a case by case judgment decision that would vary according to the country in case and the situation as well as type of business. The company must first determine if it would be a good investment to the business to hire from within-such as having appropriate skill level and adequate human intellectual. If the company has reason to believe that they would be able to hire within and still complete tasks adequately then I believe this would be the best option and would definitely cut costs. However, if the human intellect and skill level are lacking in the host country, then I think the best option would be to go ahead and pay the hardship payment to the employee. This may be more costly, but the benefits would be seen in the long run. That being said it is always a must to compensate the employee with hardship pay when doing this-I know I for one would not agree to take the task of moving to the host country as an expatriate without the extra pay.
