Developing A Mobility Policy For Your Overseas Workers

David J. Bryan, President, Xensell Global Benefit Consulting

Mar 14, 2012

Developing A Mobility Policy For Your Overseas Workers

Introduction

In today’s complex World, there are many aspects to addressing how as an organization, or employer, you will handle your people that go outside your home country to represent you.  At times it is simple when the trip is a week or two long.  As long as certain precautions are in place to address very rare but potentially serious problems, such as kidnap or serious illness/accident, there is not too much to worry or plan for.

However, if you plan on a long term assignment, then you need to consider how that individual will handled and treated.  For purposes here and in line with most industry norms, a long term assignment is anything longer than 180 days.

The reasons to invest in planning and setting a “Mobility Policy” are many: 1) To be consistent with all individuals and avoid a confusing number of “one off deals”;  2) To set expectation of people going overseas or potentially taking an assignment;  3) As these individuals are more senior and more costly you want to make sure you have a sound plan for your more valuable assets and finally, 4) you want to avoid the high rate of turnover, in some cases close to 70%, of people leaving you after they return due poor planning both while overseas and for their return.

The purpose of this brief article is to provide a rough outline of what some employers and organizations have used to establish a policy.  This is a beginning road map but not a detailed agenda.  It does provide in some detail the elements and considerations that you have to consider in having people overseas for extended periods of time. 

It should be noted the perspective of this is from that of an employer but can be applied to a government, association or other group with people that are placed overseas.

Phase 1: Diagnostic Review and Data Gathering

The initial phase, diagnostic review and data gathering, is extremely important in establishing the tone and knowledge base for all actions, recommendations, and decisions that follow. This phase would consist of several components:

A complete review of existing policies and program elements to fully understand “what is;” 

One-on-one interviews with task force members to gain their insights regarding the strengths and weaknesses of the current program, as well as its future direction;

Initial collective task force team meeting to present the insights gained during the one-on-one interviews, develop task force team ground rules, identify project steps and clarify individual roles; and
 Preparation of the preliminary project schedule and timetable.

On completion of the first phase, all participants will have a firm understanding of the organization’s current position, future direction, and insight into ensuing phases.

Phase 2: Development of IHR Vision

Designing a meaningful program must be accomplished within the context of an agreed on philosophical framework. The second phase (recommended prior to movement to later phases) would embody task force development of a collaborative formal international human resource (IHR) vision statement reflecting the organization’s overall approach to global assignments while aligning with its overall corporate and human resource philosophies. The net result of this exercise would be that the organization will have established its own “identity.” This statement will be circulated to stakeholders for appropriate internal review and approval and form the framework through which all future aspects of the global assignment program are developed.

Phase 3: External Benchmarking Analysis—Data Gathering

Determining whether a particular IHR program is externally competitive is both an appropriate and necessary exercise. Therefore, obtaining reliable metrics to provide a full understanding of policies and practices currently in vogue in the marketplace (benchmarking) is critical to establishing an organization’s relative competitive position among its peer group companies. Development of a global HR philosophy typically involves identifying the organizations (or types of organizations) in which one wishes to align itself regarding the various HR aspects of a global program.

Once identified, benchmarking information can be obtained either through the development and implementation of a customized survey or through examination and analysis of existing published data pertaining to those specifically identified organizations. Conducting a customized survey will, beyond question, provide the highest degree of qualitative and quantitative results. However, there are cost and timing considerations associated with this option.

The collection and analysis of existing benchmarking data will reveal which policies and practices currently are being employed, but will not indicate the effectiveness of such practices and procedures (i.e., if knowing what they do now, would those same organizations follow a different approach?).  Designing and conducting a customized survey tailored to an organization’s specific issues will overcome this deficiency

Phase 4: Internal Data Gathering and Feedback

To a large extent, when determining the effectiveness and receptiveness of a specific program, a key indicator is the degree to which employees understand and accept its objectives and processes and whether it meets a perceived need on their part.

This issue can be addressed through a survey of assignees to determine how important a particular provision, or procedure/process was (former assignees); is (current assignees); or may be (prospective assignees) during the term of assignment; and if the assignees, and or eligible spousal dependents, are satisfied with the service delivery or level of the “benefit.”

Phase 5: Data Analysis and Presentation

Integration and analysis of the data to serve as the basis for the new or revised HR program will occur when the team receives all the “data” from stakeholders (one-on-one interviewing), and achieves an understanding of the external market (benchmarking) and feedback from current and former assignees and spouses (assignee survey). The design team would present the results of its analysis, identifying the most significant aspects of the data set, their interpretation of the data, and recommendations for how it should factor into the next phase.

Phase 6: IHR Policy Development

Phase six represents the culmination of all previously performed work. By this phase, the project team would have completed its analysis of company programs from a number of different perspectives:
 A comparison of current policies and practices with future objectives;

The criteria set forth by the task force including those individuals responsible for program use;
Comparative analysis of the organization’s program with that of the external market; and
Perceived value of existing policies and practices by those affected retrospectively, currently, and prospectively.

Appropriate application of this “data,” applying its positive elements and mitigating the negative ones, would be the project team’s charter throughout this phase. Further, it would identify new program elements that eliminate gaps and meet desired objectives, resulting in the creation of a state-of-the-art program meeting the needs of the organization and its global community. The project team would use all of the information and data gathered and prepare and present initial drafts of the global assignment policy to the task force for their review, comment, revision, and approval. It is through its active participation during this phase that the task force assumes full ownership of the resulting work products and programs and ensures that the final document becomes, truly, a country-specific customized “product.”Customized Assignee Surveys

Designing and conducting a customized survey instrument (preferably using an independent third-party consultant) to address policies or practices to be explored would afford the organization the opportunity to gain insight into subject matter such as:

Global assignment experience;

Perceptions of global assignment and company support;

Preparation for global assignment;

Overall performance/attraction/selection/communication of global assignments;

Spousal and family support;

Relocation;

Integration into global assignment;

Compensation and benefit provisions;

Communication with home office;

Performance management; and repatriation.

Policy design itself should be all-inclusive and address subject areas such as:

  Compensation and benefits (base pay, variable pay or bonuses, long-term incentives, perquisites);

Premiums and inducements;

Tax reimbursement;

Housing and utilities allowances;

Goods and services differentials (COLA);

Dependent education;

Cross-cultural and language training;

Disposition of home and automobiles;

Shipment and storage of household goods;

Relocation expenses;

Travel grants;

Dual-career and dependent issues;

Emergency medical treatment;

Talent acquisition;

Security issues;

Retention;

Succession planning; and

Localization.

The project team, therefore, will design those “policies” that will define the compensation and benefits, relocation entitlements, and “incentives” to be provided to company assignees, as well as delineate assignee or organization tax responsibility on such remuneration. Underlying the entire policy creation process will be the application of sound tax-planning techniques to ensure such remuneration is delivered cost effectively. Incorporating tax and international HR professionals on the design team will ensure all policy elements are reviewed from all relevant perspectives.

In addition, the project team should create a policy summary grid designed to encapsulate in table format the major policy provisions. Many organizations find this helpful to distribute to their HR professionals, managers, and assignees to facilitate a quick understanding of the more in-depth policy document. Finally, a series of customized “cost estimates” should be developed comparing actual costs associated with the current policy provisions to the estimated costs for a “typical” assignee under the new policy provisions to identify any potential cost or savings of the new policy.

Phase 7: Implementation Process

In addition to the policy’s design, a critical success factor is the effectiveness of the implementation process employed. Implementation of a revised program involves a complex combination of issues: when to implement; during what period of time; who and how to “grandfather;” how to communicate; how to integrate with other corporate units (i.e., payroll, legal, accounting, finance, corporate tax, outside vendors, and the like); and phase-in considerations and processes, “buy-out” considerations, and so forth. The project team should address all of these potential considerations.

Working in concert with the task force, the project team should provide a multi-disciplinary overview of how each element might impact the company-affected employees.

This collaborative process will result in the development of a detailed process implementation plan.

Phase 8: Communication Strategy

Success of any new or revised program is affected significantly by how well it is received and understood by those who are administering or are affected by its components. An effective communication process will facilitate the organization’s successful communication of the policy’s philosophy and intent.

This phase of the project may involve a combination of any number of the following: development of written communication pieces; presentation of program intent and elements to management and or employees; provision of communication advice; development of delivery vehicles using a variety of media potentially including that of an intranet site, or other form of web-based communication, e-mail, video conferencing and the like; and design and production of employee handbooks.

Desired Outcomes

Completion of a global policy design initiative will result in several desired outcomes. It can provide a methodology for evaluating whether a specific assignment is consistent with the purpose of an organization and supportive of its business mission; minimize assignee’s financial gains and losses; encompass a support system that fosters both a positive international experience as well as career development; respond to employee, family, and business needs; and enable cost-effective and efficient application including effective tax-planning and compensation delivery and streamlined process, and be easily understood and communicated to employees, managers, and HR professionals.

It also should ensure, to the fullest extent possible, that assignees transfer and acquire knowledge during the term of the assignment and reintegrate knowledge to leverage their experience on repatriation.

Copyright © 2012,Xensell, Ltd.

About The Author

David Bryan is the President of the Global Benefits Association. Mr. Bryan has 30 years of international employee benefits expertise and has held numerous senior positions with companies like Aetna, AIG, Generali, and CareerBuilder.com. Currently, David is advising clients on their mobility benefits as well as supporting multi-national pooling strategies. He was one of the earliest advocates of captives as a means of alternate insurance finance. Current and past clients include Lear Corp., GE, Ford, Microsoft, and WalMart.

David graduated from Syracuse University with degrees in Engineering and Marketing. He also holds a CEBS designation received through The International Foundation of Employee Benefits and the Wharton School.