Discuss the variables to consider when compensating host country nationals.

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farouk23 eNotes educator| Certified Educator

Compensating host country nationals as a multinational or foreign organization is dependent on a lot of factors. While organizations have to adhere to the local labour laws and policies, they sometimes also have to adhere to their home country labour standards. Some countries have stringent rules and policies regarding child labour and general working conditions that companies would have to adhere to even in their foreign operations. That being said pure salary compensation is usually decided based on the local base and incentive pay. Some of the major factors that are considered when deciding the compensation for host country nationals are:

  1. Host country compensation practices and regulations
  2. Host country average wage rates for the particular job qualification
  3. Cost of living
  4. Availability of public social services in host country ( like universal health care or free schooling)