Nine out of 10 organisations are planning to review or revise their global expatriate policies, including benefits and allowances, in order to cut costs.
According to Mercer’s ‘International Assignments Survey 2010’ which collects data from over 220 multinational firms across all industries, among all regions, benefits (housing, education and home leave) along with expatriate allowances and premiums (such as cost-of-living allowances and mobility/quality-of-living premiums) are the leading elements of mobility policies that are under review.†
The survey also found that the number of employees on international assignments have increased by 4% over the last two years, despite the economic downturn.
Organisations globally now have more structured international assignment programmes that put emphasis on shortened assignments, hiring locally and eliminating non-essential benefits in an effort to manage costs more effectively.
Organisations are also trimming costs by hiring expatriates locally instead of paying for expensive moves from the home location. Approximately 50% of companies have increased or plan to increase the number of expatriates hired locally.
However, overall, respondents reported few changes in their approach to compensation. Some are implementing a host country local approach to save costs.
Nearly all organisations continue to provide home leave to their international assignees, either in the form of travel fare to the home location or a budget. Except for North America, where 46% of companies pay for some expenses during home leave, companies typically do not cover any of their assignees’ expenses.
Madeleine Berger, senior researcher at Mercer, said: “We have not seen much evidence of companies moving away from expatriate assignments – rather, organisations whose future depends on overseas markets are assessing how they can make better use of these to support their global business objectives.
“With less cash in the system, there is more interest in making wise investments based on the value of each individual assignment.
“Organisations are revising their mobility policies not only to control costs, but to provide consistency in their fast-growing markets where disparities may have emerged in their corporate policies.†
“There is also a growing trend to accommodate the needs of different sections of the employee population, such as Generation x, and this has led to an increase in single-status assignments especially in shorter-term projects.”
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