global mobility solutions - imercer · 2012-10-03 · it has become vital for companies to...

GLOBAL MOBILITY SOLUTIONS

CONTENTS

HOW TO APPROACH MOBILITY 3

BUILDING EXPATRIATE PACKAGES 4

COST-OF-LIVING INDICES, ALLOWANCES AND REPORTS 5

QUALITY-OF-LIVING AND LOCATION PREMIUMS 6

HOUSING DATA 7

DAILY ALLOWANCES FOR SHORT-TERM ASSIGNMENTS 8

BUSINESS TRAVEL ALLOWANCES 9

OTHER GLOBAL PUBLICATIONS 10

GLOBAL MOBILITY SOFTWARE TOOLS 11

MOBILITY CONSULTING SERVICES 12

BENCHMARKING AND BEST PRACTICES 13

GLOBAL MOBILITY EVENTS 14-15

2

In light of these challenges, your talent mobility strategy needs to:

• Support your corporate global business objectives and broader HR strategies

• Attract and retain the right global pool of talent

• Provide appropriate expatriate remuneration

• Maximize your international assignment investment

It has become vital for companies to constantly re-evaluate and evolve their approach to global mobility. With

insights from our worldwide surveys and expertise from across the globe, Mercer can help you with all of these

needs. Mercer’s robust mobility solutions can help you successfully manage globally mobile employees - from

your talent mobility strategy to compensation, benefits, and all the way through to repatriation or localization.

Mercer has developed a variety of information and web-based tools that can help you perform calculations,

generate reports, gather reference information and generally support you in all aspects of managing your

expatriate employees. Utilizing methods that are transparent, globally consistent and financially sound, Mercer’s

data and tools will enable you to design and implement consistent and equitable expatriate compensation

packages. Furthermore, Mercer’s expatriate consulting services and reliable, up-to-date benchmarking data can

help you manage your human resources globally. It will also assist in guiding your remuneration policies to

ensure your organization’s competitiveness in the marketplace.

Mercer is the unsurpassed leader in global mobility across six continents. Working with the world’s

leading organizations, Mercer has offices in 42 countries and territories and more than 25,000 clients

worldwide – making it the only provider of expatriate compensation data with a truly global footprint,

with broader human capital and benefits consulting capabilities. Mercer provides the resources needed

for our clients and our consultants to improve their strategic decision-making capabilities around the

human capital assets of an organization and is the only consulting firm offering clients cross-functional

international mobility expertise in fields such as HR strategy, talent management, international

mobility policies, expatriate compensation, mobility organization and operational management

processes, and international retirement.

HOW TO APPROACH MOBILITY

The face of employee mobility is changing. Economic challenges in the West are putting greater pressure

on Asian markets. There is an increasing presence of foreign talent in Asia, including traditional

expatriates and many on non-traditional packages. At the same time, Asian multinationals are globalizing

rapidly, and forming their own mobility policies and practices which require solid data, information and

insights. Businesses now must deal with increasingly complex issues, such as a new generation of

professionals with different motivators, the need to find ways of reducing costs, and developing more

flexible and aligned international mobility policies.

3

BUILDING EXPATRIATE PACKAGES

BALANCE SHEET

The balance sheet approach, originally commercialized by Mercer, retains the expatriate in the home-country salary

program and provides allowances and offsets to enable the expatriate to maintain a standard of living broadly

similar to that enjoyed at home. Salary is analyzed in four main expenditure categories – income taxes, housing,

goods and services, and reserve (savings, investments, etc.).

The goal of the balance sheet comparison is the establishment of compensation while on international assignment

that preserves an individual’s home-country purchasing power. Due to the often significant differences in tax rates,

social security contributions, housing costs and general cost of living between countries, a simple exchange-rate

conversion of gross salary would be meaningless. Therefore, under the balance sheet system, the individual’s

remuneration in the home location is adjusted for any cost-of-living, taxation, and housing cost differences in the

host location.

GLOBAL MOBILITY INFORMATION

MOBILITYGLOBAL

INDICES

EVALUATION

METRICS

LOCATION

MULTINATIONAL

HOME TO HOST

PO

LIT

ICA

L

CALCULATOR

HARDSHIP

DIF

FE

RE

NT

IAL

S

EXPATRIATIONCOMPENSATION

MERCERPASSPORT

QUALITY OF LIVING

COST OF LIVING

ALLOWANCES

PRACTICES

COUNTRY

ASSIGNMENT

APPROACH

BENCHMARK

SU

RV

EY

SFAIRNESS

4

3

COST-OF-LIVING INDICES,ALLOWANCES AND REPORTSTo encourage mobility and to manage your international assignment costs, you need precise information

to calculate fair and objective expatriate compensation packages. Based on more than 200 goods and

services, our semi-annual surveys are conducted by professional researchers in over 400 locations. We

research multiple brands at multiple outlets in each location, where your expatriates can buy goods and

services of international quality.

Expatriated employees will find the prices of goods and services in their host location to be different

from – and often higher than – those in their home location. Mobility managers must be able to take into

consideration continually changing cost-of-living and currency differences among diverse locations and

integrate them into fair, workable, transparent, cost-efficient compensation packages.

THE BENEFIT OF TWO APPROACHES

To help you find the optimal solution, Mercer offers two distinct ways to compare costs:

NATIONALITY-SPECIFIC APPROACH The Mercer ORC nationality-specific cost-of-living

approach develops cost-of-living indices and

differentials based on the unique spending patterns in

a base home country. By using a different weighting for

each market basket item based on the unique cultural

aspects of each home country, it ensures that

expatriates can maintain their home country

expenditure patterns in their host locations.

This approach compares prices in the home country

from a local-national perspective to prices in the host

city from an expatriate perspective.

MULTINATIONAL APPROACHThe Mercer multinational cost-of-living approach

develops cost-of-living indices and differentials based

on a blended international spending pattern. This

methodology assumes a convergence of spending

patterns among expatriates of companies employing a

variety of expatriates with complex assignment

patterns and from many different nationalities. With

weighting of goods and services the same for all

nationalities, this approach results in allowances based

solely on a comparison of prices in the home and host

location, while eliminating differences in allowances

that may occur for assignees of different nationalities

due to unique cultural preferences and nationality-

specific expenditure patterns.

Mercer can help you decide which approach works

best for both your company and your expatriates.

With price information collected twice a year, Mercer’s

Cost of Living reports include:

• Location-to-location index comparison

• Home country spendable income

• Cost-of-living allowances by income level and family

size

HOME COUNTRY SPENDABLE INCOMESpendable Income represents the typical

amount an employee spends on goods and

services in his/her home country. Used in

conjunction with our Cost of Living indices, they

are the basis of appropriate cost-of-living

allowances. Spendable income data are based

on national consumer expenditure statistics for

major countries. The data is broken down by

income level and family size, from single

employees to couples with four children.


5

QUALITY-OF-LIVING AND LOCATION PREMIUMSFactors such as climate, disease and sanitation standards, ease of communications, and physical

remoteness can often affect the success of a foreign assignment. Moreover, the local political and social

environment, political violence and repression, and crime may give rise to potentially uncomfortable,

inconvenient or even dangerous situations.

Mercer offers two approaches to objectively compensate mobile employees going to difficult assignment

locations. The qualitative and quantitative methods involved in Mercer’s products – the Quality of Living

Report and the Location Evaluation Report – result in a recommended financial incentive that compensates

them for adverse conditions in the host location.

THE BENEFIT OF TWO APPROACHESYour company’s decision to compensate expatriates for difficult conditions can be based on an assessment of

generally accepted standards of living or on an assessment of differences in living conditions between two locations.

LOCATION EVALUATION REPORTS (LER) These reports assess more than 130 locations

worldwide on 14 categories that make up daily life for

expatriates and their families. LERs recommend a

premium for a given location compared to generally

accepted high living standards. Analysts rate the living

conditions in the location and calculate an overall

score, which is then translated into a location-specific

premium as a percentage of salary. The LER results in a

single recommendation for all assignees in the host

location, independent of the assignee’s home location.

QUALITY-OF-LIVING REPORTS (QOL) These reports also rate quality-of-living factors, but

they provide a recommended allowance based on a

comparison to a specific home location. The QOL

calculator lets you compare the quality of living in two

locations, determine a quality-of-living index between

them and translate that index into a premium

expressed as a percentage of salary. The QOL for a

given host city varies, based on the assignee’s home

location.

Customization of reports is also available upon

request, as are reports for nonstandard locations.

Mercer’s global mobility specialists are available

to advise you with further information on Location

Evaluation Reports and Quality of Living Reports.

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6

HOUSING DATA

HOME COUNTRY HOUSING NORMS Mercer has developed Home Country Housing Norm data to enable companies to assess housing cost differentials

between a home and a host location when sending employees on international assignments. Our research involves

gathering and analyzing data based on the latest national statistics on family expenditure patterns in each of the

countries covered. This data provides the normative amounts that employees typically spend on housing in their

home country and can help you determine any employee contribution toward housing costs in the host country.

Data is broken down by income level and family size.


Housing decisions are emotional and costly. Determining how to compensate and provide for comfortable, safe

accommodations for expatriates and their families can be a complicated process.

EXPATRIATE ACCOMMODATION COST DATAMercer’s Host City Accommodation data helps you determine the housing allowance/budget for your employees

when they are transferred abroad. Monthly rental housing costs are provided for each host location by:

• Type of housing unit (house/apartment, furnished/unfurnished and number of bedrooms)

• Price category of expatriate-preferred neighborhoods

The data can also be supplied in customized formats.

7

DAILY ALLOWANCES FOR SHORT-TERM ASSIGNMENTS

Short-term Assignments provide companies with an alternative to long-term assignments for the transfer of skills,

know-how and resources. Changes in technology, travel and communication networks, and other issues, such as

dual career and family concerns, often make Short-term Assignments more attractive.

However Short-term Assignments present new challenges. Employees on short-term assignments are usually not

accompanied by their family, therefore their living costs are different and they cannot be compensated in the same

manner as for long-term assignments. On the other hand, short-term assignments last longer than business trips

and require expenses of a wider nature, such as personal care products, laundry and entertainment.

Mercer provides Short-term Assignment Allowance data that allows your company to grant a daily allowance in a fair

and consistent manner. The data are available for each city covered by our worldwide Cost-of-Living reports, and

are updated twice a year.

The Short-term Assignment Allowance data is designed to provide your company with reliable information relating

to daily living costs on Short-term Assignments.

The Short-term Assignment Allowance includes the following categories with three prices reported (low, medium

and high):

• Meals – food at home and in restaurants

• Laundry and dry cleaning

• Personal care

• Entertainment – cinema, sport club and newspaper

• Transportation

Mercer’s specialists are available for any advice on expatriate compensation and for any assistance you

might need when using Mercer Short-term Assignment Allowances.


8

BUSINESS TRAVEL ALLOWANCEThe Mercer Business Travel Allowance reports provide data to determine daily allowances for international business

travelers in 334 destinations and four key regions: Africa-Middle East, Americas, Asia Pacific and Europe. The

reports contain information on actual hotel and meal rates plus miscellaneous expenses at three budget levels:

high, medium and low.

The reports help:

• Determine daily per diem rates

• Provide reasonable expenditure caps

• Estimate budgets more accurately

• Control costs

The reports provide cost data in the destination currency and the home currency or in any other currencies

required. Reports can be purchased individually or through an annual subscription. Subscribers benefit from

access to the data for all destinations and quarterly updates.


9

108

OTHER GLOBAL PUBLICATIONSWORLDWIDE BENEFIT & EMPLOYMENT GUIDELINES (WBEG)Keeping track of constant changes in laws and

regulations in every country is time-consuming and

expensive, but you can be confident using this top-

selling, trusted resource. WBEG contains the most

comprehensive and reliable information on

employment conditions, statutory employee benefits

and typical employer benefit practices.

With extensive analysis and narrative reports, WBEG

offers unparalleled quality and is the ultimate reference

for worldwide benefits and employment information.

Offering in-depth benefit updates for 62 countries,

WBEG is available in five easy-to-use volumes for the

major economic regions of the world.

To give you immediate access to benefits information

wherever you have an internet connection, Mercer now

offers the entire set of WBEG benefits reports in an

online version. Your subscription gets you one year of

access to WBEG-Online, where you can quickly access

specific benefits information.

PERSONAL TAX REPORTS

The Mercer Personal Tax Reports are authoritative guides

on income tax and social security requirements in 90

countries worldwide. The reports outline, in simple-to-

easy terms, the country’s tax system and the

implications for both local and expatriate employees.

These reports summarize individual income tax and

social securty liabilities for tax and social charges. The

reports include comprehensive tax tables that show the

effective tax burden on a wide range of salaries for

single persons, married couples and married couples

with more than two children.

GLOBAL MOBILITY HANDBOOKThere is more to an effective international assignment

than just moving an employee from one city to another.

Mercer’s new Global Mobility Handbook gives you the

practical information you need to consider before,

during and after deploying staff around the world.

Available in two volumes, both reports provide insights

into various aspects involved in expatriation, such as

the human resources/administration function, pre-

assignment preparation and moving, pay packages,

budget, cost control and taxes, communication

pointers, family issues, and repatriation.

INTERNATIONAL CAR POLICIESInternational Car Policies is a valuable reference guide

that can help you define new strategies and manage

your company car policy in the most effective way,

making it easy to:

• Highlight differences in car policy practices across key

markets

• Identify cost-saving measures

• Compare your car policy with others in the market

Based on responses from thousands of employers

around the world, the Mercer International Car Policies

guide provides information on typical company car

policies and associated tax regulations.


10

Technology is the cornerstone of an effective employee mobility program. Expatriates represent a

large investment and a source of future leadership. Mercer is able to support businesses by providing

a total assignment cost management tool and support service. Mercer offers an easy-to-use, online

software tool, implemented by our specialists, which is designed to be simple and functional while

providing clarity on all costs associated with performing expatriate compensation calculations.

• Cost-of-Living Index

• Cost-of-Living Allowance

• Expatriate Accommodation Costs

• Balance Sheet Calculator

• Hypothetical Tax Calculator

• Location Premiums

• Short-Term Assignment Allowance

• Spendable Income, Home Housing Norm and

Reserve

WEB-BASED DATA SOLUTIONSMercer’s web-based applications are designed to support you in all aspects of managing your expatriate

employees worldwide. With instant access to data, reports and calculators, you will have the most

sophisticated and easy-to-use global mobility database on the market. Online calculators let users customize

data and expedite delivery of quality information to meet the needs of HR programs, administrators and

employees.

Mercer’s global mobility calculators include:

GLOBAL MOBILITY SOFTWARE TOOLS

GLOBAL MOBILITY TOOLS

EXPATRIATE ADMINISTRATION SOFTWAREMercer, in partnership with Equus Software, a leader in state-of-the-art technology solutions, provides

AssignmentPro™, an international assignment management software system that uses best-in-class

technology to streamline expatriate administration. AssignmentPro™ provides end-to-end automation to

effectively manage all aspects of international assignments. The system houses assignee-related information

in a single easy-to-use format, eliminating the need to outsource expatriate administration.

Some of AssignmentPro’s key features include:

• Easy integration with many HRIS platforms allowing for complete automation of payroll and email systems as

well as employee communications.

• The ability to manage and store documents, such as contracts, securely in a single database.

• Around-the-clock communication with assignees, suppliers and HR staff worldwide via web portals.

• The ability to manage business processes via an automated workflow system.

• Simple calculating and reporting of cost projections, expenses and compensation in multiple currencies.

• Online expense management allowing for automatic notifications of approved expense reports.

MERCERPASSPORT®The MercerPassport® suite of web-based services is a valuable source of reference information that will help

expatriates learn what it’s really like to live in another country. Besides covering the fundamentals of foreign

living, MercerPassport provides insights on costs and availability of essential goods and services in the host

country. It also provides the whole family with a clear understanding of how to appreciate and adapt to life in a

new location, as well as essential, practical guidance about moving abroad and acclimating to a new home.

MercerPassport now also offers Start Guides outlining procedures and requirements for visiting or relocating

to up-and-coming locations in Central Asia, the Middle East and Africa.

11

MOBILITY CONSULTING SERVICESInternational assignments are part of a process to create change, improve understanding and develop the

global presence that is needed in the present competitive business climate. Expatriation is synonymous

with new business opportunities, expansion and growth. In order to manage expatriate assignments

successfully in a highly competitive and cost-conscious business environment, Mercer consultants are

able to support you with the services described below.

9

CONSULTING & BENCHMARKING

MOBILITY POLICY CONSULTINGWhether your company is creating its first global mobility policy or realigning its program to changing business

needs, talent objectives or industry trends, Mercer can offer complete solutions to ensure your mobility practices

are effective.

First, Mercer clarifies the purpose of the expatriation program within your company and determines whether it is

fulfilling that purpose. Then, Mercer identifies how you can achieve strategic objectives, specifically addressing the

following areas:

RELATED CONSULTING SERVICES Mercer provides a wide range of capabilities relating to mobility, including talent strategy, global leadership

development, labor market analysis and workforce planning, segmentation of the mobile workforce, mobility

training and education, as well as technology and data-related support.

• Defining different types of international assignments

• Relocation policies

• Housing

• Compensation approach

• Expatriation allowances and premiums

• Retirement and healthcare

• Language and cultural training

• Localization and repatriation

• Home leave

• Cost analysis

• Policy implementation and communication

• Dependent education

Our mobility consulting and information solutions are provided as part of Mercer’s Talent, Rewards and

Communication consulting practice, which looks holistically at your organization’s people strategies and

objectives. Only Mercer can provide this in conjunction with mobility data and technology solutions.

12

BENCHMARKING AND BEST PRACTICES

7

CONSULTING & BENCHMARKING

GLOBAL MOBILITY POLICY BENCHMARKINGCan you prove that your strategy for rewarding and

managing expatriates is working? Are your policies

competitive compared to what your competitors are

doing? Can you document what you need to get

support from other decision makers?

Knowing how other multinational companies are

handling their expatriate workforce around the world is

crucial when designing and building your expatriate

management strategies. It’s important to validate your

company’s competitive position by understanding

evolving trends and improving your market knowledge.

By identifying possible improvements and cost savings,

you will be able to introduce innovative ideas and make

changes to the way your company manages its mobile

workforce in alignment with overall business

objectives.

Mercer is able to help you with comprehensive

benchmarking of your global mobility policy by

providing detailed reports on key expatriate package

elements, allowing you to analyze your existing global

mobility policy and compare against best practices of

global multinational companies representing all

industry sectors.

MERCER SELECT BENCHMARKING

GROUP The Mercer Select Benchmarking Group (SBG) is an

exclusive service offered by invitation only to

companies with the largest and best-run expatriate

assignment programs. The purpose of the SBG is to

provide a comprehensive international assignment

benchmarking resource to companies that recognize

the importance of making data-driven decisions. Over

the past seven years, Mercer’s consulting team has

focused on providing SBG members with the tools to

compare their most critical assignment program

elements with those of other multinationals.

WORLDWIDE SURVEY OF INTERNATIONAL ASSIGNMENT

POLICIES AND PRACTICESAligning your company’s policies and practices with the

marketplace paves the way for successful international

assignment programs for your organization. The

valuable data in this publication, Mercer’s most

encompassing global mobility survey, will help you

develop, modify and customize your expatriate

packages.

• This is the largest survey participant base in the

industry.

• Participants receive a free regional question-by-

question analysis report and executive summary.

• Custom reports are available by industry, by

comparator group and by expatriate population size.

BENEFITS PRACTICES FOR

EXPATRIATES AND GLOBALLY MOBILE

EMPLOYEES This survey, conducted approximately every two

years, offers employers vital information on

benefits practices among multinationals, focused

on health, retirement and life/disability insurance.

Providing these core benefits for globally mobile

talent is difficult due to issues with social security,

disruption of coverage, pre-existing conditions,

funding, regulation and cost issues. Varying

expectations from employees and sensitivity to

local equity make these challenges even more

complex.

This survey addresses these challenges by

highlighting the most prevalent approaches taken

by multinationals and the trends in these practices

over time.

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EXPATRIATE MANAGEMENT TRAINING COURSESMercer has been advising multinational companies on employee mobility issues for more than 30 years. Building

on this knowledge and experience, we have specifically designed expatriate management training courses to assist

HR professionals who have responsibilities in managing expatriates. Mercer offers courses that provide an overview

of the key concepts of international assignment management, as well as further in-depth training and knowledge-

sharing of key trends and challenges in employee mobility. Various dates and locations are available throughout the

year.

LOCAL MOBILITY EVENTSMercer holds global mobility roundtables in various locations throughout the year. These are designed to provide

HR policy-makers and others who manage expatriates an opportunity to network with their peers and learn about

the latest trends and practices. These roundtables vary in duration and cover mobility-related topics. Please contact

your local country consultant for more details.

GLOBAL MOBILITY WEBCASTSJoin Mercer’s global mobility specialists for a series of complimentary webcasts designed to help you optimize your

company’s global workforce while maintaining its competitive advantage. The webcasts will help you stay informed

on topics and trends that directly affect expatriates and global mobility program management.

For further information on upcoming webcasts and details of how to register, please visit www.imercer.com

webcasts.

GLOBAL MOBILITY EVENTS

GLOBAL MOBILITY EVENTS

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Copyright 2012 Mercer LLC. All rights reserved. Insert code here 000-XX-0000-0000

For further information, please contact your local Mercer office or visit our websites at:

www.imercer.com/mobility

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global mobility solutions - imercer · 2012-10-03 · it has become vital for companies to...

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