In this blog I explore 5 top tips mobility practitioners can implement to save hundreds of thousands of dollars from their global mobility program. These simple steps are guaranteed to save significant costs and add profit to the organization’s bottom line, whilst also ensuring a more streamlined and fluid global mobility program, enabling companies to mobilize their talent quickly and efficiently around the world.
1. Segment your talent and policies – one size certainly does not fit all in this multi-generational workplace and diverse global talent pool. If you haven’t revised your policies in the last 3-5 years they are going to be out of date and probably costing you money. It’s time to segment your talent and build relevant policies to support each type. These can range from self-initiated moves, young in career volunteers, developmental assignments, strategic project focused assignments and senior executive moves. A Local Plus policy may be more relevant to support certain talent types than a traditional assignment and offer significant cost savings. A well-defined permanent transfer policy can also help support the free movement of people across your organization and open up a global talent pipeline. A broad mobility policy framework will allow alternative approaches and a wider pool of talent to tap into and avoid the overuse of expensive assignment packages. Having robust and well defined policies, aligned with talent management processes will ensure expectations are set up front, reduce exception spend and ensure assignments are focused and productive and do not extend unnecessarily.
2. Exceptions – It is important to track and review policy exceptions and identify trends. Exceptions can run into hundreds of thousands of dollars per year, are an administrative burden and a drain on resources. By identifying trends, policy adjustments can be made to support particular or unique situations or cheaper alternatives may be available. A recent analysis with one MNC in Asia revealed that regular exceptions were being made to extend temp housing. A deeper investigation identified most extensions were from transferees from US and Europe due to the longer household goods shipment times, thus delaying the move in to permanent housing. By offering rental furniture after the first month instead of extending temp housing, the company could realise over $500,000 of savings per year! Having a more disciplined approval process will also control costs, ensuring only the most strongly justified exceptions get approved
3. Global pricing – Many companies sign global agreements with their vendors, and although this brings benefits in terms of vendor management and reporting, you may not always be getting the most competitive rates. Take for example language training, whereby a global vendor may charge a global rate of $40-50 per hour. In developed countries like Europe and Japan this may be a realistic price, however in less developed countries such as India and China the actual cost on the ground may be only $10-15 per hour! By restructuring the service delivery and removing a layer significant cost savings can be achieved.
4. Benchmark allowances – Regularly benchmark allowances, particularly housing, and especially in locations where the market may have moved lower. Data providers regularly update their housing data for locations with significant market movements. It is also wise to benchmark with peers in the industry to see where you stand in relation to your competition. A revision of the policy and a resetting of assumptions on your housing matrix can often be achieved, especially in locations which attract a lot of talent. In countries where safety is a concern you will need to ensure the allowances are sufficient, however in countries such as Singapore where there is a wide choice of high quality housing it may be time to reset expectations. Housing norms can also be applied and if explained up front can be considered a fair and reasonable approach from both sides. Also look at lower cost alternatives for allowances such as COLA where an efficient purchaser index may be available as opposed to the higher cost expat index.
5. Tax efficiency –tax efficient delivery mechanisms of benefits and allowances are available in many countries. If you are not taking advantage of these, the company and/or the employee are incurring unnecessary tax costs. Talk to your tax provider to find out what tax effective schemes are available and ensure these are integrated into your policy. In China for example, reimbursements for housing and education can be treated tax free on provision of an official receipt (fapiao). This can bring significant tax savings to employees and the assignment program. Also, in China a company leased car and driver may be a more tax effective approach than providing a cash allowance, which is taxed as income. A mobility policy should always state that allowances will be delivered in the most tax effective manner available. This will ensure employees that choose alternative approaches (i.e. cash) cover the additional tax cost and not the company

I explore the above cost saving initiatives as well as many more in further detail in my booklet “Top 10 tips to save millions of dollars from your Global Mobility Program”. To receive a free copy please email me at seanc@talentmobilityasia.com

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Written by Sean Collins, founder of Talent Mobility Asia, an independent global mobility consulting firm, based in Asia. If you have any questions related to this article or wish to discuss Talent Mobility Asia’s consulting services further please contact seanc@talentmobilityasia.com or visit www.talentmobilityasia.com