Recent research from ECA confirms what many of us perceive, that home based expatriate packages are about to become a minority practice.
Among client companies I have observed an ever more common starting assumption that a permanent transfer onto a host country package will suffice. Only if this fails to deliver, will the client consider upgrading to a host country plus solution or, if they really have to, a full blown home country package.
When standing back from the internal policy debates many organisations engage in, the reasons for this change in the mood music are completely understandable. What goes on in companies is after all a reflection of what is going on in the wider world and the attitudes of people internationally. We kid ourselves if we imagine that employers set the agenda.
Professor Maury Peiperl further evidences these changing trend lines via IMD’s research findings noting that there are ever more global citizens out there; in other words more people who do not identify with their “home country” in the way that past generations might have defined their nationality. This suggests that the declining popularity of the home country package is likely to accelerate and ever more companies will only permit their global mobile employees to remain in a given location if they are prepared to migrate to a local package.
The direction this takes global mobility policy is away a la carte or a standard menu, towards a series of differently priced menus which the employer will offer selectively, depending on how hungry they are to secure the services of a given individual and what they are prepared to pay. Professor Peiperl findings lead him to explain that more and more global mobile professionals are “self-propelled” and if that is true, the balance tips away from the employer trying to incentivise an employee to embark on an international assignment to a more competitive supply side. In this world the traditional mindset employee holding out for an expatriate package may be undermined by a global citizen willing to take a local package.
These changing patterns heighten the importance of the softer skills of the global mobility practitioner, rather than the traditional technical skills set. The ability to understand the mindset of a more diverse range of candidates and to tune into the growing expediency of organisational decision-making have become more essential qualities in this niche area of reward management. Having to present alternatives quickly and cogently, to think on your feet and to be adaptive to need surely enhances the interest of such roles. These changes should therefore be welcomed by global mobility practitioners, not seen as a threat to the practitioners of such dark arts.
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Interesting subject area and blog. Do you see a global citizen as someone who would be actively on the lookout for expat job opportunities? Therefore is there anything that mobility specialists can do to better attract them, perhaps by posting internal roles suitable to be used to develop willing potential expats as expat vacancies? Each vacancy with a proposed local package to encourage uptake? Or does this area still need that personal touch which can't be aided with the use of tech in this way ... would be great to hear your thoughts
I suspect that the strong positive correlation between a weak pound and an interest in being paid in Euros, Dhirams, etc.goes at least some way to explaining the recently increasing desire to be remunerated in a local package built on a stronger currency. I work in France and the number of UK expats interested in being paid in Euros has increased in direct proportion to to the movement in exchange rates (1 Euro = £0.66 as opposed to 1 euro = £0.89). Maybe I'm cynical, but.....
Those that managed expatriation in the 80's and 90's will have clear recollections of these trends to local contracts; however, the counter-surge came when the pound gained in value and home-country directed savings elements plummeted in value. Ex-expats expected to see their purchasing parity maintained and many moved on in frustration as employers explained to them that their expectations placed them outside of a realistic cost range.
Ultimately, those organisations for whom people costs are marginal will be able to offer an "à la carte" approach - after all, they can afford it. Today, for many organisations an era of severe belt-tightening is with us, and what you can afford to pay will dicate what you do. On the other hand, and as you rightly say, where key players MUST be recruited hands must go into wallets. Equally, where expectations of a potential expat put the cost higher than that of another national, offer and demand will bring a balance one way or another.... either expectations will drop and (for example hardhip/mobility premium reduction, lowder housing budgets ...) or the person will not be taken on.
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