A successful global mobility programme needs to work well for both the assignees and the company. But implementing an effective expatriate policy that is both flexible and defined enough to serve as the foundation for any mobility scenario is a challenge, even for the most evolved global mobility programs.
In reality, developing flexible international mobility policies continues to be a challenge for mobility teams.
How can businesses look at implementing flexibility?
Flexible approaches to global mobility
Talent pool flexibility
Expanding the mobile talent pool and considering new types of candidates can facilitate assignments and help control costs. Will the organisation rely on internal employees, or does external resourcing make more sense for any specific scenario?
Location & working arrangement flexibility
This involves taking into account the chosen employee’s home country, host country, and his or her work set up upon international relocation. Consider whether assignees will be working from an office or a home/remote location, or whether it will be a rotational assignment versus full-time work. It is feasible to move jobs to people as opposed to people to jobs?
Policy flexibility & segmentation
Policy flexibility could involve meeting minimum global guidelines and requirements, while also reflecting the needs and requirements of specific geographies or categories of employees. Increased flexibility can take the form of more segmented policies with different terms and conditions for different types of assignments (for example by differentiating between self-requested moves and business essential ones).
Package flexibility includes relying on flexible expat benefit options, having the possibility to reallocate allowances for new purposes, and implementing lump sums. It can also lead companies to offer assignees more choice in terms of mobility benefits (the “cafeteria” model) or allow employees to take cash amounts instead of benefits in kind.
Designing flexible packages
Relying on lump sums, allowing cash conversion or benefits swapping are three common ways to introduce flexibility in packages:
Lump sums are cash amounts intended to cover for more than one compensation-related item and that can be used as desired by the assignee. Many companies who currently have flexibility in their policies provide lump sum(s). The main advantage of using lump sums is that it reduces administrative efforts.
With many mobility functions under-staffed no technological support for administering flexible benefits, scaling down the required administrative efforts can definitely be an argument in favor of lump sum(s) compared to other options of flexibility provision.
But lump sums also have their pitfalls including tax ineffectiveness.
A cash conversion approach means allowing assignees to receive a benefit as cash instead of as a benefit in kind. Assignees can choose to fully replace some designed benefits with the equivalent in cash, or reduce their value and receive part of the full difference in cash.
This approach shares some of the limitation of the lump sum approach. Furthermore, clear guidelines need to be establish for the cash conversion.
Some companies are offering flexibility in the form of benefit swapping, which is defined as the possibility/option for assignees to swap one benefit against another.
Benefits swapping can help personalise mobility programs – for example by allowing assignees to swap education benefits for child care or support for elderly parents. But it can also reveal a lack of relevance of some benefits (prompting requests to swap) or a lack of understanding of what’s being provided.
Excessive flexibility and an absence of clear guidelines could lead assignees to take risks in the host location (especially hardship locations). The absence of strict tax and immigration compliance monitoring as well as unsecured exchange of data between jurisdictions could also create problems for companies and individuals alike.
Duty of care and compliance should be the top priorities in a flexible programme. In many instances, organisations should look beyond the minimum legal requirements. Flexible policies should consider the bigger picture. In practice, this means providing a fair treatment to international assignees, ensure that they are not being penalized, facing unreasonable costs, family issues, or other problems, or taking unreasonable risks for themselves, their family or the company.
HR teams also have concerns with flexibility related to work practices and career management. For example:
- Fair application of working conditions across all employees
- Ability to measure and reward contribution
- Career progression for flexible workers
Flexibility should be introduced to solve specific business issues and not just to follow current trends. What business problems are you really trying to solve? Barriers to mobility linked to local regulations? Increasing the satisfaction of employees?
Back the business case with facts and develop performance indicators to measure the impact of greater flexibility. For example: employee satisfaction, time spent on managing specific tasks, employee retention and cost control. Define the decision-maker for each item in the policy (the mobility team, local HR or the assignee) and how each of these items will be delivered from a process perspective.
Set a limit to flexibility and define the minimum requirements that are non-negotiable and that the company must implement. In particular, flexibility does not have the same implications for all assignments: consider limiting flexibility for moves to hardship locations and some types of moves (e.g. moves involving families).
Make sure that employees can make informed choices through financial and tax education. Involve local HR teams and management in the process and help them understand the implications of duty of care. More generally encourage collaboration between teams to manage flexibility. Some decisions and processes about compliance or types of moves might not fall under the purview of the mobility team alone. Flexibility requires close team coordination, thorough planning and a long-term view.
DavidsonMorris’ global mobility specialists work with global employers to support development of high-impact talent mobility strategies and programmes, adopting flexible approaches in line with commercial needs. We understand the challenges of overseas assignments facing both the employer and the employee and can work with you to provide expertise and insight into effective management of assignments to avoid expatriate failure.
Last updated: 2 February 2020