Flex approaches to assignee packages

Transcription

1 Flex approaches to assignee packages Louise Worbey October 3 rd 2018

2 Agenda Global Human Capital Trends what are businesses telling us about the needs of our workforce? How does that translate for the assignee population? How do you start designing a flex system for Global Mobility? How much flexibility is right? Who gets to choose? What kind of flexibility will work best? Which provisions to flex on? Technology as an enabler Any questions? 2

3 2018 Deloitte Global Human Capital Trends The rise of the social enterprise March

4 Research overview Deloitte s largest and most extensive human capital survey to date 11,000+ business and HR leaders 124 countries 4

5 New rewards Personalized, agile, and holistic 91% companies still follow the conventional practice of conducting a salary reviews once a year or even less often 8% organizations said their rewards program were very effective at creating a personalized, flexible solution 37% Rated rewards as very important yet only 9% were very ready to deal with this challenge In today s workplace a personalized, agile and holistic rewards system is essential to attract, motivate and develop talent 5

6 The Workforce Ecosystem: Managing beyond the enterprise 37% of respondents expected growth in the use of contractors by % worry about the instability of a nontraditional workforce 50% reported a significant number of contractors in their workforce yet only 16% have an established set of policies and practices to manage a variety of worker types 6

7 The Rules of Engagement are changing.. Organisations are developing an integrated focus on employee experience 7

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9 AIRINC 2018 Mobility Outlook Survey 9

10 AIRINC 2018 Mobility Outlook Survey 10

11 AIRINC 2018 Mobility Outlook Survey 11

12 Policy flexibility Flexibility thought process: answering the following questions will help find the right solutions to incorporate flexibility into a mobility policy framework. Q1: How much flexibility is right? Q2: Who gets to choose? Q3: What kind of flexibility will work best? Q4: Which provisions to flex on? 12

13 Incorporating flexibility into policy framework Q1: what s the right level of flexibility Providing policy flexibility under a structured framework allows for controlled deviations from policy that are right sized to achieve the assignment purpose and business objectives, often resulting in fewer exceptions to policy and increased satisfaction. Company 1 (Life Sciences) Policy spectrum enables right fit. Conversion of some allowance and reimbursement elements to cash (e.g. home leave, housing allowance). Core compliance and relocation provided in kind. Company 2 (Technology) Some support retained in kind including compliance services and HHGS. Pre and post assignment lump sum for flight, temp living etc. On assignment lump sum for COLA, Home Leave and Hardship. Company 3 (Financial Services) Total compensation and assignment support converted to a cost responsibility number. Assignee has total discretion over how to draw benefits and maximize value (including tax impact). MORE STRUCTURE Level of Flexibility MORE FLEXIBILITY The Company has an interest in providing certain benefits in a particular way: Maintain expat focus on the job. Maintain compliance. Maintain tax advantages. Maintain reputation or brand (standards of housing, cars, etc.). Invest in services to support development (language, culture). Company deploys people between locations that have very different costs and standards of living. Company has a paternalistic culture and a high standard for duty of care to employee and family. Assignment related compensation and benefits is a high proportion of total compensation. Maximize the value of every dollar spent (one dollar of cost buys one dollar worth of happiness ). Culture of independence and entrepreneurialism. High proportion of variable compensation generally. Deployments between more homogenous locations (New York, London, Hong Kong, Tokyo) reduces the risk that employees will have cash-flow issues based on inaccurate budgeting. Company does not carry the cost of potentially decreased tax efficiency (often in the context of non-equalized programmes). Assignment related compensation and benefits is a low proportion of total compensation. Reduced overhead related to expense administration. 13

14 Assignee Flexibility Incorporating flexibility into policy framework Q2: who controls the flexibility Flexibility controlled by different parties will drive different outcomes. Understanding who the flexibility is for will help determine the most suitable solution. Cash-in-lieu Core/flex cafeteria Example 1: Flexibility for the business (Financial Services) Designed dial down and dial-up versions of the select policies that tailors to different assignment population (e.g. by band level, by value of assignment) Fixed provisions Core/flex needs based Business/Project Flexibility Example 3: Flexibility for both (Pharmaceutical) Established a structured point-system that allows business managers to determine the right amount of flexible benefits and the employee to choose the right benefits within the set parameters Example 2: Flexibility for the employee (Technology) Embedded trade-offs in policies for employee to trade in certain benefits for others that better meets their needs Pre-assignment visit + Destination Services Additional 5 days of temp living or Additional 2 trips home 14

15 Incorporating flexibility into policy framework Q3: where to be flexible An important piece of the decision-making process is where flexibility will be incorporated. The below graphic shows the places where flexibility can be incorporated; prior to a package decision, after the package decision, or both prior and after. 1. What (the business need) 2. Who (the talent) 3. How Long (the duration) 4. Where From/To? (the locations) Employment Arrangement and Package 5. Post-Policy Flexibility What kind of need is driving the assignment? What is the role based attributes for the target job? What is the likely next career move for this individual? Where is the likely next deployment of the employee (home, host, other)? How long will it take to fulfill the business need or transition to local resources? In terms of quality of life, is the move from like to like or higher to lower or lower to higher 1. Employment at home 2. Employment at host 3. Commitment to repatriate 4. Base Comp & Bens 5. Support package How should flexibility be incorporated into each policy? Flexibility included prior to package decision Post-package flexibility 15

16 Impact of Regional Requirements, Business Needs and Individual Circumstances Increasing Flexibility Incorporating flexibility into policy framework Q4: which policy provisions to flex on The following framework can be utilized to incorporate flexibility into the international assignment policies to address business and employee priorities: Policy Component Description Example Policy Element Flexibility Incentives Benefits provided when necessary to incentivise employees to take the international assignment Mobility premium Foreign service allowance amount very flexible Lump sum provided as needed Enablers Services and benefits provided to help the employee relocate and focus on their role Shipment of HHG Language training Cultural training Spouse assistance amount flexible Lump sum provided to assignee in lieu of individual provisions Vendor assistance Equalizers Guidelines designed to make sure that the employee is no better and no worse off than if they had not taken the assignment Tax Goods & Services Immigration Housing Medical contribution amount not flexible Governed by the mobility function, utilizing industry standard methodologies and source data Core The underlying compensation and benefits that applies during the assignment Salary Medical Retirement Employment tie amount not flexible Core remuneration and benefits inline with annual performance and salary review cycles 16

17 Incorporating flexibility into policy framework (contd.) Q4: which policy provisions to flex on Companies are meeting requests for flexibility with differentiated policies. Differentiating policies involves grouping together similarities and differences between assignments and tailoring assignments accordingly, with flexibility remaining a high priority. Similarities and differences based on: Employment level Assignment objectives Duration What are the benefits of differentiated policies? Places employees within a tier appropriate to the assignment purpose. Provides flexibility targeted to that population s specific needs. Potential differentiators include Provision of sea/road freight on an exceptions basis. Reimbursement dependents education on a discretionary basis. Number of dependent visits per annum. Family relocation allowance. Post-assignment expectations 17

18 Technology Flexibility = High Administration Burden???? Reward Optimisation Tools Data science analytics Flex Operating Systems Lump sum relocation tools 18

19 Budget calculator

20 Service selection

21 Employee dashboard

22 Questions? 22

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