With the current economic backdrop, we are all too familiar with mobility budgets being challenged to ensure every Pound (or Dollar, or Euro) of budget spend is being used effectively, and return on investment (ROI) of the mobility programme spend can be demonstrated.
You may therefore also be familiar with the term “Expat Lite”, which has grown out of the need to review relocation assignment costs and reduce spend; Expat Lite policies reflect these drivers by offering reduced benefits when compared to standard policies.
What is included?
Typically Expat Lite policies will follow the same tax and compensation approach as standard policies, while other features of the programme are either capped, decreased, or entirely removed. Examples of these changes will include:
- Household Goods shipment – capping allowances at a level below standard policies
- Housing - reduced allowances, the introduction of caps and bench-marking allowances against lower cost areas - Cost of Living Allowances (COLAs) – capped against expenses a local would incur, or calculated against lower cost areas as per Housing - Schooling – Where suitable state/local schooling places are available, the assignee will be responsible for the costs of private education
This is not an exhaustive list, but gives a great starting point for a review of benefits if you are looking at ways to reduce costs. As ever, any changes considered should be in line with both the company ethos and also aligned with the talent strategy – especially if you are in a sector where attracting and retaining skills is a challenge – to ensure a holistic approach that benefits the business overall.
One size rarely fits all...
Do remember also that an Expat Lite policy will only be successful as a supplementary part of an overall global mobility strategy – the one size fits all approach is rarely successful – so consideration should be given to targeting the Expat Lite policy as part of a suite of policies.
For example assignees who are actively seeking an overseas assignment but where the benefit may be more limited to the business may be candidates for the Expat Lite approach; senior leaders or moves to more challenging locations should be fully supported by standard expat policies to ensure they are set up for success in the new location.