By Anne Rossier-Renaud and Olivier Meier, Mercer
A successful global mobility program needs to work well for both the assignees and the company. But implementing an infallible 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.
Recent data from Mercer’s Flexible Mobility Policies Survey report shows that developing flexible international mobility policies continues to be a challenge for mobility teams.
Why is policy flexibility needed?
Policy flexibility within global mobility programs continues to evolve to address the needs of both employees and HR professionals. A number of different factors are driving this need for flexibility, including (but not limited to) ever-changing assignee demographics, employee expectations, known assignment patterns, and modern technologies and tools.
Assignee demographics and assignments patterns
Employees who choose to take on international assignments are more diverse than ever, coming from different cultural backgrounds, family situation, age, etc. The needs of these diverse groups are hard to address in a rigid one-size-fits-all policy. Similarly, the increasing complexity of home-host move combinations and local conditions in each country are putting pressure on existing policies. It is not always possible to address the specific constraints in every destination.
Generational demographics, culture, and other factors also play a huge role in individual assignees’ expectations. And an attractive employee value proposition for one individual might not be nearly as attractive to another. For example, the 2018 How Global Mobility is Responding to New Dilemmas Survey showed that:
- expectations from millennial generation employees are impacting mobility programs for 43% of respondents, and
- the aging workforce has 36% of companies re-evaluating their program policies, as well.
Shifting employee expectations can have a huge impact on everything from relocation management to overall expatriate compensation strategies and beyond.
Ever-evolving technology empowers mobility professionals to introduce more expatriate policy flexibility. More than ever, technology helps better manage assignee package creation and allows the expatriate management team to stay in close communicative contact with their international assignees and provide meaningful analysis and reports to evaluate the relevance and efficiency of mobility programs.
Flexibility beyond segmentation
Mobility managers have traditionally used segmentation as a way to address the requirements of different types of moves for different types of assignees. But with increased diversity in employee demographics and profiles, excessive segmentation could lead to further confusion and increase significantly the administrative burden of HR teams. There is a limit to how many different policies can be set up and effectively managed.
The alternative to additional segmentation focuses on enhancing the employee experience through personalized employee value propositions. Developing a unique employee value proposition for each international assignee can be the key to keep both the employee and employer happy. Well-designed value propositions provide a compelling work environment in which each employee’s needs and preferences are addressed through increased flexibility within a given policy while still maintaining a consistent framework and principles.
Flexible Mobility Policies Survey key findings
Mercer’s survey data shows that flexibility is seen as a way to address more individual situations. As such, the Mercer 2019 Flexible Mobility Policies Survey answers some key questions about flexibility in mobility policies, including:
- What approach do companies prevalently adopt – cash out, lump sum(s), enabling benefits swapping without cash substitution, cafeteria approach, marketplace approach, or a combination of approaches?
- Who can benefit from the flexibility – the business or the assignee?
- What are the pros and cons of using flexible packages and specific cash conversion and/or lump sums approaches?
Recognizing value in policy flexibility
If you’re hoping to introduce flexibility into your own organization’s policy, you’re not alone. In fact, according to the survey:
- 43% of organizations hope to introduce some flexibility to their mobility policies and practices, while
- 37% already consider their current mobility policies flexible.
Still, about 20% of participant organizations do not have flexibility in their mobility policies and do not intend to introduce any. These organizations either consider that policy flexibility is not a priority, or that it is not aligned with their company rewards culture.
Flexible policies and company objectives
What are the objectives of the companies that currently have flexibility in their policies? Why do companies ultimately choose to make policy flexibility a priority?
In the 2017 Worldwide Survey of International Assignment Policies & Practices (WIAPP) survey report, respondents indicated that dual-career/family-related issues and cost were the main barriers to mobility. Similarly, the expected advantages of a flexible mobility program were also closely related to these issues.
Within the participants of the Flexible Mobility Policies Survey, those with currently flexible packages indicated cost efficiency to be the primary benefit. Meanwhile, companies that intend to introduce more flexibility in the future indicated they see the primary benefit as receiving the best value for each individual employee. For them, the first objective is to make packages more valuable for assignees, followed by reducing exception requests. Driving cost efficiency only ranks as the 3rd most expected benefit amongst companies intending to introduce flexibility.
Are these objectives being met?
It’s worth noting that most respondents to the Flexible Mobility Policies Survey are not tracking the actual effectiveness of their flexible packages, rather, the benefits are mostly identified as common perceptions. So what are the perceived benefits to flexible organizations?
- More than 40% of respondents who currently have, or used to have, flexibility in their policies are unsure if their flexible policy resulted in expected cost efficiency within their mobility management program.
- But among the 56% who indicated they do know the (perceived) benefits of their flexible packages, more than 70% indicated that their flexible benefits’ introduction resulted in cost efficiency.
Amongst survey respondents who hope to benefit by making the assignments more valuable for assignees, the most popular policy items for which participants introduced flexibility are family-related: host housing, spousal support, child education, and home leave tickets are all items that could contribute to overcome obstacles to mobility and improve assignees’ experience while on assignment.
The challenges of policy flexibility
The introduction of flexibility doesn’t come without new challenges. When asked about the biggest challenges their company faces relative to mobility policy flexibility, the most commonly selected challenges were related to policy administration aspects:
- Tracking and reporting become more difficult.
- Technology infrastructure did not adequately support the introduction of flexible packages.
- The HR function was not ready for the additional administration incurred by the introduction of more flexibility.
Less than 25% of respondents reported having specialized tools to support the administration of flexible expatriate benefits.
Challenging yet popular?
The least reported challenge from participants was (perceived) resistance from assignees or managers. For the most part, respondents indicated that feedback from all the key stakeholders – employees, mobility specialists, HR, business/line managers – is typically positive or neutral. However, less than half of respondents collect this type of feedback formally, which makes this data also more rooted in perception than any specifically quantifiable metric.
Even in organizations where flexibility is well established, measuring the effectiveness and performance of these policies is still a major challenge. As these companies continue to draw clear lines between policy design and business results, they will need methods of quantifying the effectiveness of flexible policy adoption.