HRO Today Global Spring 2014 - 29

Mobility
economy recovers, traditional expat cities are no longer
central. Companies are investing where the gross
domestic product (GDP) is expected to grow at aboveaverage
rates such as the emerging " MINT " countries of
Mexico, Indonesia, Nigeria, and Turkey as well as Eastern
Europe and second-tier cities in China. Make sure to
incent your employees and have the proper support
programmes in place for transferees to adjust to-and
succeed in-non-traditional host locations.
4. Find the right balance. While managers may be pushing
for more flexibility with decision-making, it can lead to
greater complexity in managing your programme and
less equity among expatriates. Exceptions to policies
will occur, but be sure managers track them-and list
reasons for them. Give your leadership clear metrics to
understand the balance of priorities. Important metrics
to track include total programme costs, average cost
per assignee, and turnover among assignees within two
years after their assignments. Today's technology offers
the ability to track these metrics automatically as well as
reporting.
5. Scout host neighborhoods for new expatriates. Housing
costs are often the largest discretionary portion of
total mobility costs (after salary and related taxes),
and local housing markets can change significantly
during the year. For expatriates heading out in 2014,
be sure to use timely, accurate, neighborhood-specific
housing cost data for " host " cities. Set appropriate
rental guidelines and communicate them clearly to
expatriates and relocation firms before they search for
housing. Consider moving your approval process farther
up the chain of command so that senior managers must
approve exceptions to stated policies.
6. Align expatriate programmes to talent management
strategies. As your company expands in other countries,
it becomes increasingly important that senior executives
have hands-on experience outside their own home
countries. Even if they are solid managers in their home
countries, they may flounder in international settings
unless they have prior experience as an expatriate.
Build a pipeline of potential leaders by placing talented
employees in important geographies so they can earn
critical skills for leadership development. This may
require some forecasting. Be sure to calculate how long
current leaders are expected to serve in their roles, what
skills their successors will need, and where to invest in
staff across the globe.
7. Track your business travelers and short-term assignees
closely. As governments seek new areas of potential
tax revenue, employers need to know precisely how
many days per year their business travelers and shortterm
employees are situated in which locations, both
domestically and internationally. Some organisations
will outsource the task of tracking employees' locations
and duration of time abroad to large travel agencies
or relocation firms - but this approach will work only
if all employees are required to make their travel plans
through the designated agency. It is critical to also
manage remuneration. Consider regular expensereimbursement
programmes or a policy based on
serviced flats accommodations with cost-effective per
diem expenses.
8. Consider " local plus " as a compensation programme.
Are some of your expatriates hired locally or directly
hired on one-way or indefinite assignments? If so,
a " local plus " compensation package may be more
appropriate. This programme supplements local salaries
with a handful of allowances. This approach has gained
traction in Asia in recent years.
9. Localise when stay is extended. If your transfer has
been in country for five or more years, it may be
time to consider localising them. This means aligning
expatriated employees' compensation and benefits
package with local market levels.
10. Tweak index-based allowances. Re-examine assumptions
made when computing cost-of-living allowances and
hardship premiums based on differences between home
and host locations. Consider segmenting allowances for
different levels of employees. Most cost-of-living indexes
embed assumptions about employees' familiarity with
host location spending patterns. And if an organisation
has not revisited their allowance methodologies for a
few years, they can result in overly generous cost-ofliving
allowances in many host cities. Global mobility
experts have as many as six different indexes to choose
among, and they vary by how efficient employers expect
their assignees to be when shopping in their host cities.
Changing those indices can be both cost-effective and
realistic.
Ed Hannibal is global leader for Mercer's mobility services.
SPRING 2014 | www.hroglobal.com
[29]
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HRO Today Global Spring 2014

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