As most global employers plan to send more employees on short- and long-term jobs around the world in the next two years, they should be aware of what it takes to manage costs and run international programs. In light of the challenges employers face managing the global work force, Mercer offers 10 tips on handling this growing mobile population.
1. Look at what similar companies are doing. Before implementing a global mobility program, looking at what similar companies are doing is the first move. While some aspects could differ, examining other companies policies at least gives an employer a sense of direction. This initial phase is also the time to meet with organizational leaders to ensure the policies are in line with the companys overall strategic and operational objectives.
2. Use a third-party to gain workers perspectives. Workers on global assignments typically do not communicate their unhappiness regarding compensation and allowances in traditional employee surveys, says Mercer. Third parties, however, tend to be more effective at gaining honest answers because of the confidentiality factor. The biggest areas of friction are poor communication, relocation support, service providers and repatriation planning.
3. Choose locations wisely. Rather than sending employees to typical locations, more employers are choosing lesser-traveled regions, such as sub-Saharan Africa, smaller cities in China and Eastern Europe, and employers should be sure they have the right offerings for those destinations. An employer should also take into consideration the assignees home country to determine proper compensation.
4. Determine the proper balance of flexibility, complexity and equity. Flexibility can be built in at the business level (so managers can decide on certain optional compensation elements for expatriates) or at the individual level (using lump sums that expats can spend as they choose.) Be prepared to give leadership clear metrics to understand the balance of organizational prirorities.
5. Carefully research housing information. Following salary and related taxes, housing costs make up the priciest discretionary portion of mobility costs, and the market can fluctuate throughout the year. Thus, employers should ensure they are looking at timely, neighborhood-specific housing cost data for their global destinations. Rental guidelines should be determined from the start and communicated with assignees as well as relocation firms. Set appropriate rental guidelines and communicate them clearly to expatriates and relocation firms before they search for housing. Including senior management in the approval process can also be helpful.
6. Connect global mobility programs and talent management strategies. To create a strong talent management program, the employer should outline desired attributes of its global leaders and develop a succession plan based on those competencies. Having firsthand experience in other countries is especially important for senior leadership, and making a successful leadership transition takes planning.
7. Keep a close eye on business travelers and short-term assignees. For domestic as well as international assignments, employers should track the exact number of days each year business travelers and short-term employees are away because of government tax regulations. An employer should also closely manage compensation for those employees. In some cases, an expense-reimbursement program is appropriate while others call for flat per diem expenses.
8. Offer local plus for compensation. If some global employees are locally hired foreigners or directly hired, an employer should consider offering a local plus compensation package, which provides extra allowances to local salaries, rather than the typical home balance sheet package. This is a particularly popular practice in Asia.
9. Hire locally when appropriate. At times, it could be more appropriate to hire locally rather than send an assignee to another country. Another option is to localize current assignees by connecting their compensation and benefits with the local market. This is particularly helpful for assignees who have been living abroad for at least five years.
10. Adjust index-based allowances. Research expected expenses of cost-of-living allowances and hardship premiums determined by the variances of home and host locations. Generally, cost-of-living indexes assume assignees understand the spending habits of their abroad destinations, but adjusting those indexes can provide a more realistic picture and save costs.
