Expatriate assignment reward policy at BP

Case study: BP as presented at the CIPD Seminar on Managing International Assignments on 5 March 2008.


Carole Crossley, VP HR international mobility, BP

Company notes:

An oil, gas, petrochemicals and renewable company

98,000 staff with operations in over 100 countries

3,500 expats in over 60 countries, from 55 different home countries

large number of international contractors which can influence pay

Carole Crossley, VP HR international mobility, BP has a very firm view on expatriates and their cost to the business: “Our philosophy on costs on expats is not to send someone in the first place. Once you decide to send an expatriate it is going to cost you, because we believe in giving them full support.”

But it is not her decision who goes; at BP it is the individual business which owns the decision on whether and who to send.

BP tries too use two-way movement transfer. For example, in Angola, BP aims to be seen as an Angolan company with Angolan staff. But there are currently not enough engineering graduates in Angola (there were 15 last year) so BP has to send in expatriates from elsewhere. However, they also send Angolan BP engineers out as expatriates to other countries to further develop their skills to take back to Angola.

BP’s basic reward follows a balance sheet process and differentiates on pay according to performance. However, assignment terms are the same for people on the same grade and do not vary for performance.

In some parts of the business there is a real focus on global pay rates. For example, with exploration engineers in Trinidad, there is a strong pull for them to want to work in the USA unless they are paid to stay in Trinidad.

BP also has to overlay hardship allowances with additional pay for ‘demand locations’, that is locations where is a high demand for skills and BP needs to drive people to work there. “The businesses love this because it is a direct link between business numbers and HR,” explained Crossley.

Overall BP tries not to base pay on an expatriate’s home country and instead tries to be “blind to home country”.

“We want people who are working alongside each other to know that they are getting similar pay.”