Savings Initiatives in Expatriate Programs Under Way
February 18, 2009
NEW YORK—ORC Worldwide’s newest study, Flash Survey: Cost Savings Initiatives, asked employers about their plans for reducing costs in the international arena. “There is clearly potential for significant savings by cutting back on nonessential business travel, as 80.6 percent of the respondents are doing,” according to Roger Herod, senior vice president of ORC Worldwide. “Other leading initiatives include localizing long-term expatriates, reducing the number of expatriates, and using short-term assignees and commuters, where feasible. However,” Herod warns, “it is important to be selective in implementing any of these ideas to ensure they don’t adversely affect the company’s global strategy and competitive position.”
Implementing tiered policies for different assignment types is another approach when, for example, the company has developmental/training and early-career assignments and can dispense with some of the higher-priced expatriate “extras.” Other companies are implementing cost-effective cost-of-living allowances in host locations where high-quality goods and services are readily available. And where possible, depending on factors such as job responsibilities and family size on location, some employers are introducing less-costly housing policies — perhaps eliminating assistance with home-country property management and other similar options.
Several initiatives will adversely — and inevitably — affect the expatriate’s overall compensation package. To keep assignees motivated, employers are also considering another possible opportunity to achieve major savings without hurting the assignee’s pocket. This option involves a review of the company’s financial and service arrangements with vendors who supply relocation assistance, destination services, language/cultural training, and so on.
“This year is clearly going to be very difficult for all business enterprises, particularly those with global operations, whose mobility programs are critical to their success,” says Herod. “Consequently, HR managers face the challenge of implementing programs to reduce costs without jeopardizing the companies’ ability to mobilize — and motivate — skilled resources where critically needed on a global basis.”
For more information about the survey, please contact samantha.blackhurst@orcww.com.
