How have reward and relocation packages adapted to retain and attract top talent?
No longer tied to a physical workplace, and with technology enabling people to work when and where they want, more employees are choosing to move in with family and friends, relocate to holiday homes or change their ‘working from home’ location to a different country altogether.
Employee-led expats are changing the benefits landscape, bringing new challenges for employers. They are not traditional expats, as they have chosen to relocate rather than the organisation sending them on an assignment, and often the organisation may not even have a need for an employee to be in that country.
Benefits and rewards may need to be negotiated on an individual basis, which can mean higher premiums and disparity between benefits offered to expats across the organisation. It can also be time consuming if the organisation does not have an office in that country.
But with the war for talent likely to get tougher as the world recovers from the pandemic, companies will have to re-think their benefits to attract people into the business and accommodate their desire to choose where they live and work.
Increasingly there is a need for more flexible options for benefits and rewards for expats. This, coupled with more complicated regulation, taxation and visa requirements, depending on the country, is changing the way “expats” are placed on assignment.
Changes brought about by the pandemic
When it comes to relocating, traditionally companies would provide housing and schooling for children of expats. However, while employers may still support expats to find these services, it is now often the responsibility of the employee to fund them.
The reason for this is that many expat assignments today are a personal choice, as opposed to being a company relocation. Also, more companies are raising the salaries for expats so they can fund these elements themselves and be flexible on living choices they make whilst overseas.
Before choice became a factor, employees sent on assignment often remained on their home location contract with expat provision. However, a common challenge was employees not being able to access certain benefits, such as pensions, which can be complicated to administer globally, or having pension payments paid in their home country, which may not be appropriate if they did not plan to return.
An alternative option for companies would be to pay an expat a higher salary to invest in benefits of their choice. The drawback is that employees might choose to save the premiums rather than invest in healthcare for example, which presents problems if they get ill, such as delays in accessing treatment and resulting in them potentially having to take longer off work.
As a result of these challenges, more companies are localising expat or secondment benefits to their local office. This can ensure consistency in benefits provision in that location and ensure that benefits are aligned with the local market.
The main exception to this approach is with international private medical insurance, as expats often want or need higher benefits than are provided locally and have family with them or are globally mobile across multiple jurisdictions.
Several organisations are also trying to tackle the topic of benefits provision by trying to maintain consistency wherever possible between different countries.
This could be by aligning benefits wherever possible globally, such as Global Employee Assistance Programmes, Global Virtual GPs, Pooling of Life or Health policies with an option to dovetail local provision with an element of top-up provision.
Having consistency can help with inter-company moves between locations offering employees familiarity in benefits, leading to fewer concerns and issues when trying to understand the benefits provided in a new location, which can increase their loyalty and engagement.
Flexibility and a clear strategy are key
Ultimately, companies are attracting and retaining top talent in the global market through flexibility. Packages are negotiated and discussed with employees to determine the options (localisation or expat), they also discuss the pitfalls of the different options, and arrive at a decision that works for all parties.
This works well in terms of retaining and attracting top talent, but there is a word of caution. Employers need to be mindful of the impact of any disparity in contracts or benefits in one country. They also need to be careful of committing to providing a benefit that is not possible in another location and maintaining consistency wherever possible.
For example, committing to providing healthcare for an employee is fine whilst they work in the UK and the premiums are affordable. However, should that employee relocate to the USA it may be prohibitively expensive to offer this.
One thing is certain, companies need to establish a clear strategy and process for how they handle their global rewards and benefits that meet the needs of today’s expat. They must be able to justify what is being offered and any changes needed if an employee relocates to a different region. Having a consistent global policy which everyone understands is the only way to ensure a harmonious global workforce.
The author is Adam Harding, divisional director – international Benefits, Howden Employee Benefits & Wellbeing.
This article is provided by Howden Employee Benefits & Wellbeing.
In partnership with Howden Employee Benefits & Wellbeing
Howden provides insurance broking, risk management and claims consulting services, globally. We work with clients of all sizes to provide dedicated employee benefits & wellbeing consultancy.
