Mercer is a leading provider of quality-of-living/location evaluation data to compensate mobile employees fairly for going to a host site with a lower quality of living than that in their home location. During the crisis, we are monitoring the situation in over 400 locations globally and providing recommendations for temporary measures and long-term changes to quality-of-living/location evaluation ratings.
Understanding risks during a crisis
Risks linked to the crisis cover a much broader range of issues than just health concerns directly linked to the virus. Risks affecting assignees and the organization can be:
- Physical. Health issues linked to the virus but also to other pathologies and traumas due to the saturation of health systems in some locations.
- Psychological. Repeated stress affecting assignees and their families – ultimately impacting performance, willingness to return on assignment after the crisis and leading to talent attrition.
- Social and political. The crisis could threaten the stability of some countries and lead to political and social unrest. Sporadic hostility against foreigners or people infected with the virus has taken place in some locations.
- Operational. Disruptions to the business in the host location but also in the quality-of-living in the workplace itself. International and local supply chain, as well as shortages of essential goods and interruption of services can threaten the wellbeing of assignees in some locations
- Data-related. The combination of emergency and fast changing regulations might make compliance and data protection more difficult as companies scramble to keep pace.
- Financial: Aside from the obvious economic problems resulting from the crisis, mismanaging insurance costs or insufficient coverage could result in huge bills for employees and the company.
- Reputational. Mismanaged situations where employees see a dramatic drop in their quality-of-living can lead to a negative perception of mobility programs and even affect the overall employer branding. How companies manage the crisis will reflect on their reputation for the years to come.
Assessing the impact on assignees: avoiding generalizations
Specific groups of assignees might face more challenges than others and require special assistance. World Health Organization (WHO) studies show that age is an important factor of risk in case of infection by the virus. Furthermore, some assignees might have underlying health conditions that put them at risk.
The question of special needs also applies to the family of assignees. Duty of care is not limited to employees: companies are also responsible for the wellbeing of the family of assignees they have relocated and put at risk.
Another distinction could be made between the assignees who are able to work remotely (from home or another location) and those who are essential to business operations and need to be on site.
HR teams might not be aware of all these issues and need to reach out to employees to understand their individual situations.
Identifying short-term changes versus lasting evolutions
Companies typically update hardship allowances once per year or, less often, the allowance is fixed for the duration of the assignment. In times of crisis, expectations of both management and assignees may change.
The COVID-19 crisis is evolving quickly. Countries that have been largely spared by the epidemic so far could plunge into crisis within weeks. Tracking this evolution globally can be a challenge for HR teams, and it is important to make a distinction between temporary disruptions and lasting changes.
Temporary disruptions. Border closings, interruptions of flights, mandatory confinements, and other short-term disruptions affect the quality-of-living of assignees. Become of their temporary and urgent natures, these situations require practical support (from communication to emergency evacuation in worst case scenarios). Sometimes temporary additional payments for assignees are required, but no fundamental long-term changes to the way assignees are managed or paid in a given location is warranted.
In light of this exceptional situation, Mercer proposes the following additional temporary hardship allowance option, which companies may consider based on their own mobility reward philosophy. The methodology is based on the number of infected cases per country/state/provinces/market (for large countries such as Australia, Canada, China or the United States we recommend considering the number of infected cases per province, state or region and not per country due to their size).
Contact us to find out more about the Mercer methodology
|Epidemic status /local situation
||Temporary supplementary allowance
|High risk and strict confinement/emergency Measures
||Small/medium temporary allowance
|Medium risk and limited confinement
||Small temporary allowance
|Low risk and no mandatory confinement
||No additional allowance
Lasting changes. The scale of the crisis might lead to lasting damage to the economy, social and political instability, and a deterioration in living conditions in some locations. Such situations require a review of assignment conditions in the affected locations and a change in hardship/quality-of-living allowances. Mercer will run new surveys in September to assess the situation in over 400 locations. In the meantime, updates will be provided for locations where the crisis has resulted in a significant and lasting decline in quality-of-living for international assignees.