“ Organisations must review not only the financial elements of their relocation policies, but also consider the support that is needed if individuals and families on the move are going to be both productive and settled in their new locations.”
COST-OF-LIVING ALLOWANCES Price increases in food, household goods, utilities etc all feature within the basket as applied to the calculation of cost-of-living allowances when determining expatriate rewards. Over the years, employers have typically moved away from basing cost-of-living allowances on so-called standardised indices replicating home country consumption patterns, moving instead towards more efficient purchaser indices (EPI). These reflect local spending patterns and help to reduce the assignment cost for employers. While the EPI may well be appropriate to reflect
careful shopping, it is important to note that when assignees first arrive in their destination location, they may not have local knowledge sufficient to be able to make the most efficient purchases. With the increasing
cost of goods, it is likely that inefficient spending in the early stages of the assignment will have a negative impact not only on the financial wellbeing of those moving to the new location, but also on expectations as to the financial value of their international assignment.
TALENT IMPLICATIONS Organisations need the best talent that they can possibly employ in order to ensure true competitiveness. Employees know their worth. They look for flexibility in the assignment deployment, often seeking a combination of remote and on-site working. They also want to be compensated such that they do not lose out through the international move. Employers have over the years responded to employee
requests for greater flexibility by introducing lump-sum arrangements within their reward policies, enabling employees to choose how they spend allowances given to them according to their own personal needs. In theory, this sounds very good from the perspective of improving the employee experience – employees and their families can make the best use of the budgets that they are given and tailor these to their precise requirements. This works particularly well when the housing supply enables employees to choose accommodation that suits them best – for example, to be close to international schools or to local services, which they particularly wish to use and value. However, a lump-sum approach whereby employees
are simply given a budget to sort out their own moving and accommodation requirements presents a very stressful situation when international employees and their families are trying to compete in particularly tight housing markets where costs are rising rapidly and multiple households are chasing every property that comes on to the rental market. In London, for example, individual viewings
are now being replaced by open-house approaches whereby anybody wishing to view a property needs to
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