GLOBAL MOBILITY Programme SCANNER REPORT PREPARED FOR MICI HEALTH CORPORATION MARCH 0 Paul Smith Mercer London
Background MICI Health Corporation ORGANISATION DEMOGRAPHICS ABOUT THE GLOBAL MOBILITY PROGRAMME SCANNER HQ: London, United Kingdom # Employees: 0,000 Global Mobility Population: (Assignments/Transfers) 80 Long-term Assignments 0 Short-term Assignments 0 Career Assignments Industry: Life Sciences Managing an international mobility programme is a complex activity for any organisation. Complexity creates various dimensions of people, financial, performance, and compliance risks. The Global Mobility Programme Scanner provides a high-level assessment of global mobility programme risks. It also provides recommendations to address identified risk areas and highlights opportunities for cost optimisation and process enhancement. The scanner draws on Mercer s true cross-functional mobility expertise and also links in with sister company Marsh to review the following seven aspects of mobility management: Global mobility process elements Core benefits risk/medical Core benefits retirement Assignment preparation and conditions Allowances and other assignment provisions Compensation General risk management framework The scan was conducted through an interview format from which a Mercer or Marsh consultant applied a standardised assessment framework. The results of the scan are presented in an overall summary and series of high-, medium-, and low-risk ratings for subcategories. Findings and recommendations are listed. These are derived from the various scan ratings by leveraging our vast mobility practice databases and by sourcing the best of Mercer s internal crossbusiness expertise and the general corporate risk and insurance capability of Marsh. A custom scan debrief in a results review meeting with a Mercer or Marsh consultant will be provided. This joint dialogue allows for a deeper understanding of the risks, opportunities, priorities, and potential interventions to enhance global mobility programme effectiveness. MERCER MARSH
GLOBAL MOBILITY PROGRAMME SCANNER RISK PROFILE SUMMARY 5 0 GENERAL RISK MANAGEMENT FRAMEWORK COMPENSATION ALLOWANCES AND ASSIGNMENT PROVISIONS ASSIGNMENT PREPARATION AND CONDITIONS CORE BENEFITS RETIREMENT CORE BENEFITS RISK/MEDICAL PLANS GLOBAL MOBILITY PROCESS Low risk Medium risk 5 High risk MERCER MARSH
GLOBAL MOBILITY PROGRAMME SCANNER RISK PROFILE SUMMARY KEY OBSERVATIONS: MICI Health Corporation has a medium- to low-risk profile, which is to be expected from a leading firm in the life sciences sector. The mobility programme allows MICI Health Corporation to effectively staff its operations with qualified and experienced employees today, but there are signs that the programme needs to be aligned to future needs in view of important demographic changes at MICI Health Corporation. There are some concerns as to whether MICI Health Corporation is able to retain top talent upon termination of the assignment and repatriation. This would suggest that a review is needed of the role of talent management and core retirement benefits. MICI Health Corporation s management could adapt a better structure of the programme to meet future needs. It would also be in a better position to evaluate the value that mobility brings to the group. CORE BENEFITS RISK/MEDICAL 5 0 5 0 ASSIGNMENT PREPARATION/ CONDITIONS GLOBAL MOBILITY PROCESS 5 0 5 0 ALLOWANCES /ASSIGNMENT PROVISIONS 5 0 CORE BENEFITS RETIREMENT 5 0 COMPENSATION 5 0 GENERAL RISK MANAGEMENT FRAMEWORK Low risk Medium risk 5 High risk MERCER MARSH
SECTION : GLOBAL MOBILITY PROCESS. GLOBAL MOBILITY PROCESS KEY OBSERVATIONS: While MICI Health Corporation s risk profile in this section of the scanner can be considered as low, there are a number of areas of concern regarding the alignment of the programme as it stands today and the future talent needs of the company. Compared with other firms of this size and sector, the profile of MICI Health Corporation expatriates is mainly parent company nationals. Currently, few of the senior management team have any international experience, so mobility is not seen as vital for growth in the company. The company would benefit from a global view of talent and mobility. Such a move will lead to a review of the policies and processes, ultimately putting in place vehicles to support diversity in global mobility. MOBILITY ELEMENT RISK MERCER APPROACH.. Corporate Views on Mobility Mobility Policy (HR Policy). Governance Process..5 International Vehicles (Risk, Medical, Pension) Categorisation of Expatriates Review existing corporate policy to determine whether it remains in line with best market practice. Consider how it applies to the current expatriate population/profile. Discuss ROI of mobility, how management sees the value that assignments bring, and what impact the programme has on talent attraction, retention, and business performance. Stakeholder interviews and expatriate satisfaction surveys can be effective resources to assess alignment with management views. Review policy regularly for maintenance, to confirm policy terms and conditions remain in line with market practice. Ensure that all stakeholders understand both the rationale for creating assignments and their terms and conditions. Review current governance policy to ensure annual review of processes and appropriate benefits/compensation practices. Helps mitigate risk and ensure treatment remains in line with market best practice. Review both the benefits provided and the provider of programmes to ensure cost efficiency and best premium and/or service across the market and programmes. Review current segmentation of assignment profiles and policies and amend in line with corporate objectives. Mercer has seen market practice shifts in categories, particularly in relation to length of an assignment and value to the company and employee. MERCER MARSH 5
SECTION : CORE BENEFITS RISK/MEDICAL. CORE BENEFITS RISK/MEDICAL KEY OBSERVATIONS: The risk/medical profile of MICI Health Corporation is of a low nature. The element of high risk centres on the International Medical Plan, where it has become apparent that the plan has not been reviewed since its design about 0 years ago. Not only are there gaps in coverage requirements, but the costs are also considered excessive. Any plan review should ensure it can support the expected trends in the diversity and segmentation of assignments. MOBILITY ELEMENT RISK MERCER APPROACH.. Home versus Host Approach (Domestic Vehicle) International Medical Plan. International Life Plan..5.5 International Disability Plan International Business Travel (Expat Specific) Security and Evacuation Plan Suggest a review to determine whether the current strategy is still fit for purpose and in line with market best practice. Review programme and policy of provision to ensure that the plan has changed to maximise use of domestic systems and benefits/ terms and that conditions are in line with market practice to assist with managing premium increases. Recommend regular reviews to benchmark rates and also to ensure that it adheres to changing legislative requirements. Consider provider market review to ensure that cover is cost-effective. Recommend regular reviews to benchmark rates and also to ensure that it adheres to changing legislative requirements. Consider provider market review to ensure that cover remains as cost-effective as possible. Review regularly to benchmark rates and cover, ensuring appropriate cover and cost-competitive premiums; this is critical due to potential overlap with both medical plan and evacuation cover that may be in place. Review regularly to benchmark rates and cover, due to potential overlap with both medical plan and travel cover that may be in place. 6 MERCER MARSH
SECTION : CORE BENEFITS RETIREMENT. CORE BENEFITS RETIREMENT KEY OBSERVATIONS: The risk profile of the retirement category is of a low nature. The plan meets the needs of MICI Health Corporation s assignment population today but it is unlikely to support any of the new mobility programmes expected. There is no plan currently in place for senior population with potential for a wider rollout. Some senior assignees receive augmentations to salary depending on individual negotiations in lieu of pension plan aim to remove these augmentations and replace with membership of international plan. MOBILITY ELEMENT RISK MERCER APPROACH... Home versus Host Approach Existence of Domestic Vehicles in Host Location International/Offshore Pension Plan Approach Individual Winners/ Losers Analysis. Social Security Policy.5 Salary Augmentation in Lieu of Retirement Plan N/A Review approach based on assignment length. Potential to review based on any adjusted segmentation/categorisation of the expatriate population. N/A Compare high-level differentiation between current pension arrangements and those to which expatriates would be entitled on assignment. Important to identify potential losses and consider funding them elsewhere. Consider representative employee profiles to complete indicative calculations and figures; where material, complete individual calculations. Ascertain any potential for expatriates to remain covered under home-country social security, where possible, and to understand any shortfall. Where this is not possible, determine whether the loss can be quantified or individuals can contribute to an equivalent option. Assess whether augmentation is appropriate, depending on the size of the expatriate population and whether any individual circumstances have changed. MERCER MARSH 7
SECTION : ASSIGNMENT PREPARATION AND CONDITIONS. ASSIGNMENT PREPARATION AND CONDITIONS KEY OBSERVATIONS: MICI Health Corporation s mobility policy covers all of the important mobility elements, and these benchmark favourably among a wide selection of firms. We would expect that a select benchmarking among firms with similar talent mobility development plans will give a less favourable picture. As these are costly items, it is important to review the value that each policy element delivers to ensure the success of the assignment. MICI Health Corporation does not measure expatriate satisfaction. If it did, then it could get valuable feedback from its employees and family members. MOBILITY ELEMENT RISK MERCER APPROACH. Language Training. Cultural Training. Annual Vacation/ Holiday. Home Leave.5 Settling-in Allowance Review policy and approach by assignment type/duration; identify the purpose and use feedback. Review policy and approach by assignment type/duration; identify the purpose and use feedback. It is important to recognise selfawareness and behaviours in a global context. Recommend optimising use of self-directed tools/resources. Review latest trends in this area, as companies struggle between flexibility in choice of home and host vacation/holiday policies; some offer better-of-home-or-host. Look at market practice alignment. Find out what employees are saying and what impact this policy has on expatriate attraction and retention. Review latest trends in this area, as companies struggle between flexibility in choice of destination and rigidity about returning home (and how home is defined, as this affects assignment populations differently, that is, globally mobile employees no longer have a home base). Consistency is important. Look at market practice alignment. Find out what employees are saying and what impact this policy has on attraction and retention. Examine how smooth the process from moving to settling in is perceived. Consider feedback from expatriates on this process and how the allowance itself is perceived. Ensure employees/assignees are clear on this allowance s intent as a contribution towards expenses not otherwise covered. Consider if any miscellaneous expenses currently paid against receipts could be covered under this allowance, reducing the administrative burden. 8 MERCER MARSH
SECTION 5: ALLOWANCES AND OTHER ASSIGNMENT PROVISIONS 5. ALLOWANCES AND OTHER ASSIGNMENT PROVISIONS KEY OBSERVATIONS: The risk profile of these mobility elements is low in the sense that policies have been benchmarked and the housing and education policies have been recently reviewed in an effort to reduce exceptions in this area. The company expressed interest in a tool that would help it evaluate the level of risk concerning travel of employees and dependents. The company is also looking at ways to facilitate an insurance portfolio, particularly for home owners while on assignment. MOBILITY ELEMENT RISK MERCER APPROACH 5. 5. 5. 5. 5.5 Transportation at Host Location Travel to and from Host Location Housing Benefit at Host Location Host Country Housing Purchase Assistance Home Country Housing Considerations N/A Review policy and practice for market alignment. Important to have a flexible approach that aligns with company policy in the host location and expatriate norms to control any potential risk exposure for expatriates and accompanying family members, or for the company. Review this provision regularly to ensure consistency, compliance, and alignment with the company s business travel policy as well as market best practice. Review the housing policy/benefit to see how it can better serve the needs of the expatriate population and align with validated data that reflects market practice. Explore practices such as lump sums and sharing cost savings for ways to improve efficiencies. Consider technology solutions that can help reinforce policy, minimise exceptions, and manage expectations, making HR s job much easier. N/A Recognise that housing is a very sensitive subject, and how employees deal with their home housing is an important point. Options range from laissez-faire to full home housing maintenance assistance. Develop or amend policy guidelines with clear parameters that align with market practice and mitigate risk. MERCER MARSH 9
SECTION 6: COMPENSATION 6. COMPENSATION KEY OBSERVATIONS: MICI Health Corporation s expatriate compensation policy is aligned with the group remuneration policies. The company uses a balance sheet approach that ensures the employee is kept whole relative to the home country and that all other compensation elements are aligned to this home country concept. The elements of concern today are the high cost of the COLA and ultimately the assignment, leading line management to look for less costly solutions and not implementing the policy. A review of the policy would help segment the assignments and apply compensation models aligned with value (employee/company) that may help reduce concerns about costs. MOBILITY ELEMENT RISK MERCER APPROACH 6. Base Salary 6. Other Cash Components 6. Variable Compensation 6. Cost-of-Living Allowance Review compensation approach options in relation to the segmentation and duration of assignments. Consider market data and practice insights to validate the assessment. Review the policy to ensure there are no exceptions regardless of whether the home or host approach is used. Consider market data and practice insights to validate the assessment. Review the total rewards policy (especially variable compensation components) to determine whether the process is really having the desired results. Assess if it is aligned to both the desired approach and assignment performance goals. Consider any communication gaps, comparison of locals to expatriates, and repayment/claw back agreement in case of termination. Review the compensation model and how packages are built up. There are a number of options in view of the changes taking place in the expatriate workforce and different types of assignments emerging. Consider market data and insights on home and host locations. 0 MERCER MARSH
SECTION 7: GENERAL RISK MANAGEMENT FRAMEWORK 7. GENERAL RISK MANAGEMENT FRAMEWORK KEY OBSERVATIONS: The general risk management framework at MICI Health Corporation is having desired results with medium to low risk across all of the six mobility elements analysed. Improvements can be achieved by tracking and monitoring governance by all subsidiaries. To this purpose, there are excellent tracking tools that will help MICI Health Corporation manage risks in this area by ensuring the travel policy is implemented, immigration regulations are followed, and medical and retirement elements are in compliance with the policy. MICI Health Corporation should consider revamping its communications portal with employees to include a section on insurances that can inform employees and is also linked to a preferred supplier for various employee insurances while on assignment. MOBILITY ELEMENT RISK MARSH APPROACH 7. 7. 7. 7. 7.5 Corporate Risk Management Governance Mobility Risk Management Policy Business Travel Management Policy and Travel Tracking Home Content and Personal Property Insurance Vacant Home Owners Insurance Review the current corporate risk management governance to ensure that all significant mobility risk elements, both internal and external, are well-covered and managed. This also ensures that the company has a clear recognition of its risk profile and meets its duty of care towards international staff. Complete the current risk policy with regards to mobility risks by optimising the: Identification of risk areas using industry-specific global risk maps. Risk evaluation using an integrated approach. Solutions implemented for all types of risks. In addition, verify and ensure that the policy is updated and communicated internally. Review the travel management programme to ensure it remains best practice. Review insurance coverage to ensure continued alignment. Provide coverage to expatriates in certain riskier countries and for certain expat categories. Recommend reviewing opportunity and cost for such coverage for all or certain categories. 7.6 Liability Insurance Review existing policy and consider specialist input for expertise to ensure best wording and price. MERCER MARSH
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