INTERNATIONAL REWARD
Expat numbers double as companies see increased value in expatriate assignments
The number of employees on international assignments has doubled over the last three years as part of the continuing trends towards globalisation, according to a survey conducted by Mercer.
As many as 47% of companies surveyed said they had increased the deployment of traditional expatriates (employees on one- to five-year assignments) and 38% reported an increase in “global nomads” (employees that continuously move from country to country on multiple assignments).
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“The growth has been driven by companies’ desire to be globally competitive. To successfully launch new ventures abroad and gain advantage over competitors, companies generally bring in their own experts from other locations to lead projects on a short-term basis, rather than rely on local talent,” said Robert Lockley, principal in Mercer’s international business. “Increasingly these are corporate global nomads, seasoned professionals who move from project to project within the same multinational company. They bring solid experience in transferring knowledge, and a consistent approach.”
Benefit policies
The vast majority of companies surveyed (86%) consider benefit provision for expatriate employees a medium or high business priority. However, 26% admit to having no overarching policy for providing expatriate benefits.
Lockley said: “Establishing an international policy is essential to stay competitive, maintain geographical consistency and control costs. Even against a backdrop of economic uncertainty there is still competition for the best talent. Companies that are lax in this area will lose out."
Survey participants were asked to rate the success factors for their expatriate benefits scheme:
supporting the company’s business and HR strategies ranked the highest (63%)
being valued by employees and remaining cost effective were also deemed important factors (both 59%).
However, nearly two thirds of companies (64%) have no specific procedures in place to measure the success of their expatriate benefit programmes. “Creating and maintaining benefit plans for expatriates is an expensive and complicated endeavour. By failing to assess the value of these programmes to the company or the employees themselves, many organisations miss the opportunity to improve their benefit offering and sharpen their competitive edge,” said Lockley.
Medical benefits
The majority of respondents provide medical benefits for their expatriates, whether via international plans or via home- or host-country plans. However, more than 80% do not consider local social security provision when providing these benefits.
Lockley said: “Multinational companies can achieve considerable cost savings by tailoring their medical plans to integrate with local social security provision. Although the data suggests few have yet to implement such plans, we see a growing number of clients actively exploring this approach.”
A final word
“Multinationals highlight that international assignments are part of their global leadership development programmes. Gaining experience in various geographies is becoming an essential step on the career ladder of international firms.” - Robert Lockley, principal in Mercer’s international business.
Want to know more?
Title: Benefit Survey for Expatriates and Globally Mobile Employees 2008/2009, Mercer.
Survey sample: The survey covers 243 multinational companies worldwide, including over 94,000 expatriates (compared with 50,000 in 2005/2006). Mercer conducts the survey every three years to provide an overview of expatriate policies in large multinational firms.
Availability: Copies of the report cost EUR 900 and are available from www.imercer.com/expatbenefits or client services, tel: +48 22 434 5383.
Mercer is a “leading global provider of consulting, outsourcing and investment services”. Its 18,000 employees are based in more than 40 countries. For more information visit www.mercer.com.