Post on 15-Jan-2015
description
Mercer webcast
www.mercer.com
Latest Trends in International Assignment Policies and Practices
April 2011
James O'Neill, ChicagoDan Mikes, Chicago
1Mercer webcast
Mercer’s 2010 Worldwide Survey of International Assignment Policies and Practices
1,000+ Worldwide participants– 480 Americas– 103 AsiaPac– 239 EMEA
Longest continually running survey of it’s kind
Covers all major areas of global mobility policy & practices
Data cuts:– 2010 Worldwide & Regional Cuts– 2008 Worldwide & Regional Cuts
2Mercer webcast
Number of expatriates (2010)
257
26 20 24 41
860
258
127
0
200
400
600
800
1000
WW Americas AsiaPac EMEA
AverageMedian
3Mercer webcast
Changes implemented in last two years
25.6
%
24.1
%
21.7
%
21.0
%
20.0
%
14.0
%
25.3
%
31.3
%
33.3
%
22.0
%
24.0
%
19.0
%
25.9
%
34.8
%
22.8
%
12.0
%
23.0
%
18.0
%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Decreased use of expatriates Heavier reliance on localizingemployees
Increased use of efficient cost-of-living allowances
Americas 2010Americas 2008AsiaPac 2010AsiaPac 2008EMEA 2010EMEA 2008
4Mercer webcast
Changes implemented in last two years
44.0%
36.8%
48.0%
34.3%
42.0%
31.3%
44.0%
32.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
None of the above
WW 2010WW 2008Americas 2010Americas 2008AsiaPac 2010AsiaPac 2008EMEA 2010EMEA 2008
All potential choices were decreasing use of expatriates, reduced incentives offered, reduced vendor fees, heavier reliance on localizing employees, increased use of efficient cost-of-living allowances, and changed tax policy.
5Mercer webcast
Global mobility policy elements under review Worldwide & Americas
WW 2010
Americas 2010
EMEA2010
Asia Pac2010
None 12.2% 12.7% 9.4% 10.8%Global policy development 39.1 42.6 40.6 33.3Intraregional policy development 20.0 23.7 20.1 26.5Policy development for assignments to HQ country 13.7 13.1 8.1 12.7Short-term assignment policy development 34.3 40.4 39.7 35.3Multi-tier policy development 28.3 35.1 28.2 32.4Delivery of expatriate compensation 23.6 23.9 23.9 30.4Expatriate localization 31.3 35.7 32.9 44.1Implementation of cost-effective COLA 21.1 18.9 23.1 33.3Foreign service and/or mobility premiums 20.1 17.4 17.5 14.7Hardship premiums 21.8 13.1 19.7 24.5Housing policies 26.9 29.5 28.6 31.4Tax equalization 22.8 26.5 23.5 32.4Car practices 15.2 15.1 15.0 21.6Overall cost-effectiveness 45.8 50.1 44.0 43.1Overall competitiveness 29.5 38.7 24.4 36.3Program administration 29.9 34.6 26.1 35.3
6Mercer webcast
Use of expatriates
47.1%
55.0%
27.6%25.3% 25.0%
20.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Increasing Decreasing No Change
WW 2010
WW 2008
47.4%52.0%
24.0%28.6%
23.0%25.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Increasing Decreasing No Change
Americas 2010
Americas 2008
44.1%
52.0%
34.3%
21.6%
30.0%
18.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Increasing Decreasing No Change
AsiaPac 2010
AsiaPac 2008
46.8%
61.0%
24.5%28.8%
23.0%
16.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Increasing Decreasing No Change
EMEA 2010
EMEA 2008
7Mercer webcast
Assignment length trends
24.8%
54.4%
4.0%
16.8%
28.0%
4.0%
52.0%
16.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
More shortterm
More longterm
No change Don't know
WW 2010
WW 2008
28.4%
7.0%
51.5%
6.1%
14.1%
29.0%
48.0%
16.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
More shortterm
More longterm
No change Don't know
Americas 2010
Americas 2008
27.5%
51.0%
3.9%
17.6%
2.0%
26.0%
52.0%
21.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
More shortterm
More longterm
No change Don't know
AsiaPac 2010
AsiaPac 2008
36.0%
29.2%
52.4%
3.0%
15.5%
4.0%
50.0%
11.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
More shortterm
More longterm
No change Don't know
EMEA 2010
EMEA 2008
8Mercer webcast
Highest use of expatriates – top five locations Inbound
63.7%
12.7%
41.3%
15.1%15.1%
0.0%
25.0%
50.0%
75.0%
100.0%
China USA India UAE Brazil
WW
60.1%
17.0%18.0% 17.3%
43.0%
0.0%
25.0%
50.0%
75.0%
100.0%
China USA UAE India Brazil
Americas
73.9%
13.6%18.2% 18.2%
21.6%
0.0%
25.0%
50.0%
75.0%
100.0%
China USA India Australia Japan
AsiaPac
57.3%
18.8%
27.1%21.9%
46.9%
0.0%
25.0%
50.0%
75.0%
100.0%
China USA UAE India Brazil
EMEA
9Mercer webcast
Highest use of expatriates – top five locations Outbound
55.2%
13.4%17.0% 14.1%
29.4%
0.0%
25.0%
50.0%
75.0%
100.0%
USA Japan India Canada Australia
WW84.4%
11.3%
22.3%
12.1%17.9%
0.0%
25.0%
50.0%
75.0%
100.0%
USA Canada India Australia China
Americas
46.9%
7.8%
29.7%
21.9%
40.6%
0.0%
25.0%
50.0%
75.0%
100.0%
Australia USA India China Japan
AsiaPac
51.7%
14.7%
31.9%
15.5%18.1%
0.0%
25.0%
50.0%
75.0%
100.0%
USA India Australia China Canada
EMEA
10Mercer webcast
Compensation approach for global assignment
69.3
%
7.0%
3.8%
2.8%
71.3
%
13.0
%
12.8
%
3.8% 6.
5%
3.0%
2.0%
52.3
%
16.3
%
27.9
%
5.8% 7.0%
4.7%
3.5%
67.2
%
6.6%
14.1
%
5.6%
5.1%
5.1% 5.6%
12.2
%
3.7%
14.5
%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Home basedbalance sheet
approach
Headquartersbased balance
sheetapproach
Host basedapproach
Higher ofhome or host
approach
Home plusapproach
Host plusapproach
Other thanabove
WW AmericasAsiaPacEMEA
11Mercer webcast
31.5
%
16.2
%
6.2%
1.5%
27.6
%
18.3
%
19.4
%
16.5
%
4.9%
44.7
%
14.6
%
19.0
%
21.9
%
2.5%
34.6
%
21.9
%
1.9%
40.5
%
9.9%
46.5
%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Pays entirely in homecurrency
Pays entirely in host-country currency
Pays in third-countrycurrency
Splits pay betweenhome- and host-
country currencies
Handles on a case-by-case basis
WW AmericasAsiaPacEMEA
Delivery of expatriate remuneration
12Mercer webcast
Split pay
34.8
%
7.8%
15.3
%
14.8
%
12.2
%
13.3
%
44.8
%
15.5
%
17.2
%
17.2
%
5.2%
31.5
%
19.7
% 26.8
%
13.4
%
8.7%
22.9
%
10.0
%
24.6
%
44.4
%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Splits according toexpatriate’s w ishes
Splits based onconsultants’
recommendations
Splits according tocompany policy
Splits based on taxconsiderations
Splits based ongovernmentregulations
WW AmericasAsiaPacEMEA
13Mercer webcast
Provision of incentive premium
WW
16.80%19.50%
36.70%42.80%
Americas
27.80%
20.50%
13.50%
48.50%
AsiaPac
40.20%
17.50%23.70%
37.10%
EMEA
37.40%
18.90%17.60%
36.90%
On-going payment(foreign-servicepremium)Lump sum amount(mobility premium)
Yes, other
Does not provide
14Mercer webcast
Calculation of incentive payments
Foreign Service Premium WW Americas AsiaPac EMEA
Percentage of base pay 62.0% 73.5% 57.5% 58.8%
- Average % 17.3 14.2 14.7 15.5
Flat amount 11.3% 2.9% 7.5% 2.4%
- Average amount ID $3,010 ID ID
Mobility Premium WW Americas AsiaPac EMEA
Percentage of base pay 44.2% 53.3% 23.1% 37.2%
- Average % 11.8 11.5 ID 10.4
Flat amount 11.7% 9.8% 0.0% 16.3%
- Average amount $6,386 $7,438 ID $4,983
15Mercer webcast
Tax approaches
76.1%80.0%
6.5%4.5% 5.0%5.0%
0.0%
25.0%
50.0%
75.0%
100.0%
Tax equalize Tax protect Laissez Faire
WW 2010
WW 2008 83.1%85.0%
4.8%3.7% 4.0%4.0%
0.0%
25.0%
50.0%
75.0%
100.0%
Tax equalize Tax protect Laissez Faire
Americas 2010
Americas 2008
72.4%70.0%
8.2%6.1% 6.0%8.0%
0.0%
25.0%
50.0%
75.0%
100.0%
Tax equalize Tax protect Laissez Faire
AsiaPac 2010
AsiaPac 2008
61.6%65.0%
13.8%6.9% 8.0%9.0%
0.0%
25.0%
50.0%
75.0%
100.0%
Tax equalize Tax protect Laissez Faire
EMEA 2010
EMEA 2008
16Mercer webcast
Expatriate housing policies Americas, AsiaPac, and EMEA
44.6
0% 50.0
0%
33.0
0%
14.0
0%
3.00
%
16.8
%
60.4
%
6.9%
15.8
%20.0
%
65.0
%
8.0%
8.0%
26.8
%
55.3
%
10.2
%
7.7%
31.0
%
49.0
%
14.0
%
6.0%
12.0
0%
5.70
%
37.6
0%
0.00%
20.00%
40.00%
60.00%
80.00%
Company pays housingcosts but deducts home-
country offset asemployee’s contribution
Company pays housingcosts and does not deduct
a home housing offset(free assignment housing)
Company pays a housingdifferential
Company makes nocontribution to foreign-
housing costs
Americas 2010Americas 2008AsiaPac 2010AsiaPac 2008EMEA 2010EMEA 2008
17Mercer webcast
Expatriate housing policies Worldwide
41.4
% 46.0
%
39.0
%
11.0
%
4.0%
9.0%
6.3%
43.3
%
0.0%
20.0%
40.0%
60.0%
80.0%
Company pays housingcosts but deducts home-
country offset asemployee’s contribution
Company pays housingcosts and does not deduct
a home housing offset (freeassignment housing)
Company pays a housingdifferential
Company makes nocontribution to foreign-
housing costs
WW 2010
WW 2008
18Mercer webcast
Housing: further analysis (of Americas cut)
Joint Distribution
Provides Home Sales Assistance¹
Provides Property Management² Provides Both Provides
Neither
(8%) (21%) (40%) (30%)
Pays host housing costs and withholds norm 4% 12% 23% 6%
(44%)
Pays host housing costs and does not withhold norm 3% 8% 10% 16%
(37%)
Provides housing differential1% 2% 6% 4%
(12%)
Makes no contribution to host housing costs 0% 0% 1% 4%
(6%)
1) Provides home sales assistance, but not property management
2) Provides property management, but not home sales assistance
19Mercer webcast
Housing: further analysis (of Americas cut)
Conditional Distribution
Provides Home Sales Assistance¹
Provides Property Management² Provides Both Provides
Neither
Pays host housing costs and witholds norm 9% 26% 52% 14%
(44%)
Pays host housing costs and does not withhold norm 9% 21% 27% 44%
(37%)
Provides housing differential8% 15% 47% 30%
(12%)
Makes no contribution to host housing costs 4% 7% 21% 68%
(6%)
1) Provides home sales assistance, but not property management
2) Provides property management, but not home sales assistance
20Mercer webcast
Spousal support
Provides Spousal Support
47.1%53.1%
32.0%
56.5%
46.0% 49.0%39.0%
55.0%
0.0%
20.0%
40.0%
60.0%
WW Americas AsiaPac EMEA
20102008
21Mercer webcast
Usage of efficient purchaser indices for COLA
36.6
0%
54.7
0%
44.9
0%
1.80
%
2.90
% 10.1
0%
42.3
0%
31.9
0%
0.00
%
1.40
%
1.40
%
66.7
0%
43.5
0%
0.00
%
2.30
% 7.30
%
49.2
0%
1.00
% 7.40
%
2.30
%0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
From the start ofthe assignment
From the start ofthe assignment
with an additionalprotectionallowance
After a transitionperiod
Handles on a case-by-case basis
No
WW AmericasAsiaPacEMEA
Average number of months:
• WW: 22.5
• Americas: 7.1
• AsiaPac: ID
• EMEA: 20.3
22Mercer webcast
Market basket items modification
61.3
%
55.2
%
38.7
%
11.5
%
12.4
%
53.5
%
35.2
%
16.9
% 21.1
%
60.7
%
23.1
%
6.4%
20.2
%
8.5%
16.7
%
27.0
%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Does not modify marketbasket
Transportation Furnishings Medical
WW AmericasAsiaPacEMEA
Main reason for modifying the market basket items is to avoid duplication of payment of items already included in policy.
23Mercer webcast
Transportation allowance Americas, AsiaPac, and EMEA
Middle Management and Above38
.2%
6.2%
9.7%
30.9
%
15.0
%
39.0
%
7.0%
10.0
%
30.0
%
14.0
%
33.3
0%
6.90
%
13.7
0%
27.5
0%
18.6
0%
35.0
%
11.0
%
9.0%
36.0
%
9.0%
29.2
0%
18.2
0%
11.0
0%
33.5
0%
8.10
%
31.0
%
17.0
%
11.0
%
35.0
%
6.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Always provide Provide, if expatriate haduse of a company car at
the home location
Provide, but only whenjob requires a car
Provide, but only incountries where it is
local practice forcomparable positions
Not provide
Americas 2010Americas 2008AsiaPac 2010AsiaPac 2008EMEA 2010EMEA 2008
24Mercer webcast
Transportation allowance Americas, AsiaPac, and EMEA
Other Expatriates30
.50%
4.40
%
11.9
0%
31.9
0%
21.3
0%
30.0
%
5.0%
15.0
%
31.0
%
18.0
%
18.0
0%
1.00
%
16.7
0%
31.4
0% 33.3
0%
21.0
%
6.0%
12.0
%
36.0
%
25.0
%
17.0
0%
10.6
0%
19.5
0%
40.7
0%
12.7
0%
20.0
%
8.0%
16.0
%
41.0
%
13.0
%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
Always provide Provide, if expatriate haduse of a company car at
the home location
Provide, but only whenjob requires a car
Provide, but only incountries where it is
local practice forcomparable positions
Not provide
Americas 2010Americas 2008AsiaPac 2010AsiaPac 2008EMEA 2010EMEA 2008
25Mercer webcast
Transportation allowance Worldwide
Middle Management and Above
34.1
%
8.0%
15.7
%
29.6
%
12.6
%
37.0
%
8.0%
13.0
%
30.0
%
11.0
%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Always provide Provide, if expatriate had useof a company car at the home
location
Provide, but only when jobrequires a car
Provide, but only incountries where it is local
practice for comparablepositions
Not provide
26Mercer webcast
Transportation allowance Worldwide
Other Expatriates
25.9
%
4.7%
19.2
%
31.7
%
18.5
%
30.0
%
5.0%
15.0
%
31.0
%
18.0
%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Always provide Provide, if expatriate had useof a company car at the home
location
Provide, but only when jobrequires a car
Provide, but only in countrieswhere it is local practice for
comparable positions
Not provide
27Mercer webcast
Questions
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Questions and contacts
www.mercer.com/webcastsView past recordings and sign up for upcoming webcasts
James O’NeillChicago+1 312 917 9683 james.oneill@mercer.com
Dan MikesChicago+1 312 917 9441daniel.mikes@mercer.com
www.mercer.com