mercer 2011 mobility trends webcast americas

Mercer webcast

www.mercer.com

Latest Trends in International Assignment Policies and Practices

April 2011

James O'Neill, ChicagoDan Mikes, Chicago

1Mercer webcast

Mercer’s 2010 Worldwide Survey of International Assignment Policies and Practices

1,000+ Worldwide participants– 480 Americas– 103 AsiaPac– 239 EMEA

Longest continually running survey of it’s kind

Covers all major areas of global mobility policy & practices

Data cuts:– 2010 Worldwide & Regional Cuts– 2008 Worldwide & Regional Cuts

2Mercer webcast

Number of expatriates (2010)

257

26 20 24 41

860

258

127

0

200

400

600

800

1000

WW Americas AsiaPac EMEA

AverageMedian

3Mercer webcast

Changes implemented in last two years

25.6

%

24.1

%

21.7

%

21.0

%

20.0

%

14.0

%

25.3

%

31.3

%

33.3

%

22.0

%

24.0

%

19.0

%

25.9

%

34.8

%

22.8

%

12.0

%

23.0

%

18.0

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Decreased use of expatriates Heavier reliance on localizingemployees

Increased use of efficient cost-of-living allowances

Americas 2010Americas 2008AsiaPac 2010AsiaPac 2008EMEA 2010EMEA 2008

4Mercer webcast

Changes implemented in last two years

44.0%

36.8%

48.0%

34.3%

42.0%

31.3%

44.0%

32.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

None of the above

WW 2010WW 2008Americas 2010Americas 2008AsiaPac 2010AsiaPac 2008EMEA 2010EMEA 2008

All potential choices were decreasing use of expatriates, reduced incentives offered, reduced vendor fees, heavier reliance on localizing employees, increased use of efficient cost-of-living allowances, and changed tax policy.

5Mercer webcast

Global mobility policy elements under review Worldwide & Americas

WW 2010

Americas 2010

EMEA2010

Asia Pac2010

None 12.2% 12.7% 9.4% 10.8%Global policy development 39.1 42.6 40.6 33.3Intraregional policy development 20.0 23.7 20.1 26.5Policy development for assignments to HQ country 13.7 13.1 8.1 12.7Short-term assignment policy development 34.3 40.4 39.7 35.3Multi-tier policy development 28.3 35.1 28.2 32.4Delivery of expatriate compensation 23.6 23.9 23.9 30.4Expatriate localization 31.3 35.7 32.9 44.1Implementation of cost-effective COLA 21.1 18.9 23.1 33.3Foreign service and/or mobility premiums 20.1 17.4 17.5 14.7Hardship premiums 21.8 13.1 19.7 24.5Housing policies 26.9 29.5 28.6 31.4Tax equalization 22.8 26.5 23.5 32.4Car practices 15.2 15.1 15.0 21.6Overall cost-effectiveness 45.8 50.1 44.0 43.1Overall competitiveness 29.5 38.7 24.4 36.3Program administration 29.9 34.6 26.1 35.3

6Mercer webcast

Use of expatriates

47.1%

55.0%

27.6%25.3% 25.0%

20.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Increasing Decreasing No Change

WW 2010

WW 2008

47.4%52.0%

24.0%28.6%

23.0%25.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%


Americas 2010

Americas 2008

44.1%

52.0%

34.3%

21.6%

30.0%

18.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%


AsiaPac 2010

AsiaPac 2008

46.8%

61.0%

24.5%28.8%

23.0%

16.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%


EMEA 2010

EMEA 2008

7Mercer webcast

Assignment length trends

24.8%

54.4%

4.0%

16.8%

28.0%

4.0%

52.0%

16.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

More shortterm

More longterm

No change Don't know

WW 2010

WW 2008

28.4%

7.0%

51.5%

6.1%

14.1%

29.0%

48.0%

16.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

More shortterm

More longterm


Americas 2010

Americas 2008

27.5%

51.0%

3.9%

17.6%

2.0%

26.0%

52.0%

21.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

More shortterm

More longterm


AsiaPac 2010

AsiaPac 2008

36.0%

29.2%

52.4%

3.0%

15.5%

4.0%

50.0%

11.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

More shortterm

More longterm


EMEA 2010

EMEA 2008

8Mercer webcast

Highest use of expatriates – top five locations Inbound

63.7%

12.7%

41.3%

15.1%15.1%

0.0%

25.0%

50.0%

75.0%

100.0%

China USA India UAE Brazil

WW

60.1%

17.0%18.0% 17.3%

43.0%

0.0%

25.0%

50.0%

75.0%

100.0%

China USA UAE India Brazil

Americas

73.9%

13.6%18.2% 18.2%

21.6%

0.0%

25.0%

50.0%

75.0%

100.0%

China USA India Australia Japan

AsiaPac

57.3%

18.8%

27.1%21.9%

46.9%

0.0%

25.0%

50.0%

75.0%

100.0%

China USA UAE India Brazil

EMEA

9Mercer webcast

Highest use of expatriates – top five locations Outbound

55.2%

13.4%17.0% 14.1%

29.4%

0.0%

25.0%

50.0%

75.0%

100.0%

USA Japan India Canada Australia

WW84.4%

11.3%

22.3%

12.1%17.9%

0.0%

25.0%

50.0%

75.0%

100.0%

USA Canada India Australia China

Americas

46.9%

7.8%

29.7%

21.9%

40.6%

0.0%

25.0%

50.0%

75.0%

100.0%

Australia USA India China Japan

AsiaPac

51.7%

14.7%

31.9%

15.5%18.1%

0.0%

25.0%

50.0%

75.0%

100.0%

USA India Australia China Canada

EMEA

10Mercer webcast

Compensation approach for global assignment

69.3

%

7.0%

3.8%

2.8%

71.3

%

13.0

%

12.8

%

3.8% 6.

5%

3.0%

2.0%

52.3

%

16.3

%

27.9

%

5.8% 7.0%

4.7%

3.5%

67.2

%

6.6%

14.1

%

5.6%

5.1%

5.1% 5.6%

12.2

%

3.7%

14.5

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Home basedbalance sheet

approach

Headquartersbased balance

sheetapproach

Host basedapproach

Higher ofhome or host

approach

Home plusapproach

Host plusapproach

Other thanabove

WW AmericasAsiaPacEMEA

11Mercer webcast

31.5

%

16.2

%

6.2%

1.5%

27.6

%

18.3

%

19.4

%

16.5

%

4.9%

44.7

%

14.6

%

19.0

%

21.9

%

2.5%

34.6

%

21.9

%

1.9%

40.5

%

9.9%

46.5

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Pays entirely in homecurrency

Pays entirely in host-country currency

Pays in third-countrycurrency

Splits pay betweenhome- and host-

country currencies

Handles on a case-by-case basis


Delivery of expatriate remuneration

12Mercer webcast

Split pay

34.8

%

7.8%

15.3

%

14.8

%

12.2

%

13.3

%

44.8

%

15.5

%

17.2

%

17.2

%

5.2%

31.5

%

19.7

% 26.8

%

13.4

%

8.7%

22.9

%

10.0

%

24.6

%

44.4

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Splits according toexpatriate’s w ishes

Splits based onconsultants’

recommendations

Splits according tocompany policy

Splits based on taxconsiderations

Splits based ongovernmentregulations


13Mercer webcast

Provision of incentive premium

WW

16.80%19.50%

36.70%42.80%

Americas

27.80%

20.50%

13.50%

48.50%

AsiaPac

40.20%

17.50%23.70%

37.10%

EMEA

37.40%

18.90%17.60%

36.90%

On-going payment(foreign-servicepremium)Lump sum amount(mobility premium)

Yes, other

Does not provide

14Mercer webcast

Calculation of incentive payments

Foreign Service Premium WW Americas AsiaPac EMEA

Percentage of base pay 62.0% 73.5% 57.5% 58.8%

- Average % 17.3 14.2 14.7 15.5

Flat amount 11.3% 2.9% 7.5% 2.4%

- Average amount ID $3,010 ID ID

Mobility Premium WW Americas AsiaPac EMEA

Percentage of base pay 44.2% 53.3% 23.1% 37.2%

- Average % 11.8 11.5 ID 10.4

Flat amount 11.7% 9.8% 0.0% 16.3%

- Average amount $6,386 $7,438 ID $4,983

15Mercer webcast

Tax approaches

76.1%80.0%

6.5%4.5% 5.0%5.0%

0.0%

25.0%

50.0%

75.0%

100.0%

Tax equalize Tax protect Laissez Faire

WW 2010

WW 2008 83.1%85.0%

4.8%3.7% 4.0%4.0%

0.0%

25.0%

50.0%

75.0%

100.0%


Americas 2010

Americas 2008

72.4%70.0%

8.2%6.1% 6.0%8.0%

0.0%

25.0%

50.0%

75.0%

100.0%


AsiaPac 2010

AsiaPac 2008

61.6%65.0%

13.8%6.9% 8.0%9.0%

0.0%

25.0%

50.0%

75.0%

100.0%


EMEA 2010

EMEA 2008

16Mercer webcast

Expatriate housing policies Americas, AsiaPac, and EMEA

44.6

0% 50.0

0%

33.0

0%

14.0

0%

3.00

%

16.8

%

60.4

%

6.9%

15.8

%20.0

%

65.0

%

8.0%

8.0%

26.8

%

55.3

%

10.2

%

7.7%

31.0

%

49.0

%

14.0

%

6.0%

12.0

0%

5.70

%

37.6

0%

0.00%

20.00%

40.00%

60.00%

80.00%

Company pays housingcosts but deducts home-

country offset asemployee’s contribution

Company pays housingcosts and does not deduct

a home housing offset(free assignment housing)

Company pays a housingdifferential

Company makes nocontribution to foreign-

housing costs


17Mercer webcast

Expatriate housing policies Worldwide

41.4

% 46.0

%

39.0

%

11.0

%

4.0%

9.0%

6.3%

43.3

%

0.0%

20.0%

40.0%

60.0%

80.0%

Company pays housingcosts but deducts home-

country offset asemployee’s contribution

Company pays housingcosts and does not deduct

a home housing offset (freeassignment housing)

Company pays a housingdifferential

Company makes nocontribution to foreign-

housing costs

WW 2010

WW 2008

18Mercer webcast

Housing: further analysis (of Americas cut)

Joint Distribution

Provides Home Sales Assistance¹

Provides Property Management² Provides Both Provides

Neither

(8%) (21%) (40%) (30%)

Pays host housing costs and withholds norm 4% 12% 23% 6%

(44%)

Pays host housing costs and does not withhold norm 3% 8% 10% 16%

(37%)

Provides housing differential1% 2% 6% 4%

(12%)

Makes no contribution to host housing costs 0% 0% 1% 4%

(6%)

1) Provides home sales assistance, but not property management

2) Provides property management, but not home sales assistance

19Mercer webcast

Housing: further analysis (of Americas cut)

Conditional Distribution

Provides Home Sales Assistance¹

Provides Property Management² Provides Both Provides

Neither

Pays host housing costs and witholds norm 9% 26% 52% 14%

(44%)

Pays host housing costs and does not withhold norm 9% 21% 27% 44%

(37%)

Provides housing differential8% 15% 47% 30%

(12%)

Makes no contribution to host housing costs 4% 7% 21% 68%

(6%)

1) Provides home sales assistance, but not property management

2) Provides property management, but not home sales assistance

20Mercer webcast

Spousal support

Provides Spousal Support

47.1%53.1%

32.0%

56.5%

46.0% 49.0%39.0%

55.0%

0.0%

20.0%

40.0%

60.0%

WW Americas AsiaPac EMEA

20102008

21Mercer webcast

Usage of efficient purchaser indices for COLA

36.6

0%

54.7

0%

44.9

0%

1.80

%

2.90

% 10.1

0%

42.3

0%

31.9

0%

0.00

%

1.40

%

1.40

%

66.7

0%

43.5

0%

0.00

%

2.30

% 7.30

%

49.2

0%

1.00

% 7.40

%

2.30

%0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

From the start ofthe assignment

From the start ofthe assignment

with an additionalprotectionallowance

After a transitionperiod

Handles on a case-by-case basis

No


Average number of months:

• WW: 22.5

• Americas: 7.1

• AsiaPac: ID

• EMEA: 20.3

22Mercer webcast

Market basket items modification

61.3

%

55.2

%

38.7

%

11.5

%

12.4

%

53.5

%

35.2

%

16.9

% 21.1

%

60.7

%

23.1

%

6.4%

20.2

%

8.5%

16.7

%

27.0

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Does not modify marketbasket

Transportation Furnishings Medical


Main reason for modifying the market basket items is to avoid duplication of payment of items already included in policy.

23Mercer webcast

Transportation allowance Americas, AsiaPac, and EMEA

Middle Management and Above38

.2%

6.2%

9.7%

30.9

%

15.0

%

39.0

%

7.0%

10.0

%

30.0

%

14.0

%

33.3

0%

6.90

%

13.7

0%

27.5

0%

18.6

0%

35.0

%

11.0

%

9.0%

36.0

%

9.0%

29.2

0%

18.2

0%

11.0

0%

33.5

0%

8.10

%

31.0

%

17.0

%

11.0

%

35.0

%

6.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Always provide Provide, if expatriate haduse of a company car at

the home location

Provide, but only whenjob requires a car

Provide, but only incountries where it is

local practice forcomparable positions

Not provide


24Mercer webcast

Transportation allowance Americas, AsiaPac, and EMEA

Other Expatriates30

.50%

4.40

%

11.9

0%

31.9

0%

21.3

0%

30.0

%

5.0%

15.0

%

31.0

%

18.0

%

18.0

0%

1.00

%

16.7

0%

31.4

0% 33.3

0%

21.0

%

6.0%

12.0

%

36.0

%

25.0

%

17.0

0%

10.6

0%

19.5

0%

40.7

0%

12.7

0%

20.0

%

8.0%

16.0

%

41.0

%

13.0

%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

Always provide Provide, if expatriate haduse of a company car at

the home location

Provide, but only whenjob requires a car

Provide, but only incountries where it is

local practice forcomparable positions

Not provide


25Mercer webcast

Transportation allowance Worldwide

Middle Management and Above

34.1

%

8.0%

15.7

%

29.6

%

12.6

%

37.0

%

8.0%

13.0

%

30.0

%

11.0

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Always provide Provide, if expatriate had useof a company car at the home

location

Provide, but only when jobrequires a car

Provide, but only incountries where it is local

practice for comparablepositions

Not provide

26Mercer webcast

Transportation allowance Worldwide

Other Expatriates

25.9

%

4.7%

19.2

%

31.7

%

18.5

%

30.0

%

5.0%

15.0

%

31.0

%

18.0

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Always provide Provide, if expatriate had useof a company car at the home

location

Provide, but only when jobrequires a car

Provide, but only in countrieswhere it is local practice for

comparable positions

Not provide

27Mercer webcast

Questions

Please type your questions in the web Q&A and we will do our best to answer as many questions as we have time for.

To submit a question simply click on the Q&A link at the top of your screen. A box will appear on the screen in front of you. Simply type in your questions and then click on the ‘ASK’ button.

Questions and contacts

www.mercer.com/webcastsView past recordings and sign up for upcoming webcasts

James O’NeillChicago+1 312 917 9683 [email protected]

Dan MikesChicago+1 312 917 [email protected]

www.mercer.com

mercer 2011 mobility trends webcast americas

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