In recent years, the costs of International Mobility have resulted in less attractive packages for expatriates. Added to the problem of dual careers, they remain high obstacles to developing the mobility of employees abroad. Also, faced with a drop in enthusiasm among candidates for expatriation, companies have had to adapt their practices and think about more flexible, more creative approaches focused on individualising expatriate packages while remaining within a framework to avoid abuses.
After having established clear International Mobility policies governing the support measures offered to candidates for expatriation with generous packages including full coverage of accommodation abroad in residential areas, that of children’s education, return trips to the country of departure for vacation, etc., companies have had to review their copies and limit these advantages in the face of budgetary excesses. They have carried out a segmentation of their international mobility charter. It was about building “policies with drawers”. Companies defined needs according to “business cases” based on:
– the profiles of employees (experts, managers, young talents, etc.) – WHO?
– the objectives of the mission (strategic, career development, etc.) -WHY?
– the duration of the mission – FOR HOW LONG?
For each mission, an expatriation package was offered that was more or less generous depending on the criticality of the mission.
Most often, the company used a decision tree to validate the type of policy according to business needs.
Despite these adaptations, taking into account the polymorphic situations of international work situations (development of commuting, international remote working, etc.) and the evolution of employees’ aspirations, International Mobility practitioners have had to go far further.
Indeed, a few years ago, employees were attracted by the salary, then the quest for meaning supplanted this motivation, finally today, flexibility in all areas seems to be the key word.
Let’s take the example of 2 work colleagues who have to go abroad to the USA: one with his family of 3 children and the other single. The latter will ask the employer to benefit from a return trip to France every quarter to see his elderly mother in return for the tuition fees and higher rents allocated to his colleague with a large family. Although perfectly legitimate, the request will be refused because it deviates from the group’s International Mobility policy which authorizes the payment of only one round trip to the country of departure per year.
To respond to this type of demand, companies have implemented systems called “cafeteria plans”. This involves paying the employee according to the host country anchor method. He is considered a local employee and receives the remuneration that his counterpart in the host country would have received for the same job, regardless of his nationality and his salary level in the country of departure.
To take into account the fact that he works outside his country of origin, the employer allocates him an annual budget calculated according to his classification level, the size of his family having accompanied him to the country of assignment as well as of the difference in cost of living between the latter and that of the country of departure.
With this envelope, the employee will be able to choose from a list of benefits in kind those which best correspond to their expectations among the size of housing, a company car or a second car for the spouse, the type of school for their children , contributions to a pension fund for retirement, or more returns to the country of departure, support for leisure activities (golf club, tennis, ….), etc.
Any unspent amount is not carried over to the following year.
If this individualization of packages makes it possible to avoid creating precedents, to save time on endless negotiations, to eliminate the inevitable exceptions by adapting the employer’s support to individual situations and local specificities, the exploration of these flexible policies have their limits: difficulty in determining the budgets allocated to the cafeteria plan, lack of fairness and consistency among employees, risk of arbitrary decisions, tax risks in the event of payment of cash instead of benefits in kind or even administrative overload for the employer.
In reality, outside of North America and the countries of Northern Europe, few companies have implemented the principle of the “cafeteria plan”.
The right mix to satisfy both business needs and those of employees would be a compromise between a common base precisely framed in company policy coupled with a cafeteria plan mechanism.
The non-negotiable benefits granted to all employees in international mobility would cover a robust installation package (immigration assistance, relocation, installation bonus, intercultural and linguistic training, relocation agency, temporary accommodation in the country of departure and the country arrival, travel to the country of assignment, real estate agency fees, etc.) so that the family is quickly settled and the employee operational.
The salary would be in host country anchor for compatible countries (those with high and equivalent purchasing power) or in mixed anchor in other countries (i.e. the highest net between a method of calculating remuneration country anchor origin and anchorage in the host country) with tax assistance from a tax lawyer for the declaration of income in the host country.
Finally, in terms of social protection, whatever their nationality and country of departure, every employee would benefit from a good international pension fund for their retirement as well as solid private international health coverage.
All other emoluments in a package, conventionally granted to an expatriate, would be managed in the form of a cafeteria plan allowing the choice between a car, the type of school for the children, accommodation, returns to the country of departure, etc. .
This formula would be a “core flex package” with a solid common base and controlled flexibility.
This plan makes it possible to define a very clear framework in terms of remuneration and social security coverage with flexibility linked to the daily life of employees. The employer will thus define what is flexible with its limits or what is not.
Whatever solutions are explored, they must be simple to guarantee adherence by both the business and employees to the new plan put in place.
