A CHANGE IN ECONOMIC DRIVERS

Expat packages have been through unprecedented pressure over the last few years. This trend has led to packages becoming far less financially attractive for the majority of potential employees.

At the same time, the number of working expat partners/spouses throughout the world has maintained its progression over the last 40 years. Today, 89%(1) of expat partners/spouses were working prior to expatriation. Their employment status has also risen, thanks to higher education, which has substantially increased their financial contribution to the family purchasing power. The era of the “trailing spouse” is definitively over.

Last but not least, a more open and global job market with fewer immigration issues which formerly prevented partners/spouses from working abroad (easing in India in 2012, the blue card expected in the EU soon) have made it realistic for an accompanying partner/spouse to work while abroad.

The combination of these three elements is reshaping international mobility and reinforces the role of the accompanying partner while abroad. FROM A DUAL CAREER TOWARDS A DUAL INCOME APPROACH A few years ago, corporations were choosing to support accompanying partners mostly to make sure that modern career oriented partners/spouses were happy abroad, as well as to ensure a positive impact on the expat. This led to 71%(1) of corporations putting in place some form of assistance to accompanying partners of assignees, although it is virtually never in terms of compensation for the loss of the partner’s salary. Over these last 5 years, and thanks to the changes described above, the percentage of international corporations offering spousal assistance has continued to increase despite the negative economic environment. So what has changed? The drivers. Behind supporting spousal assistance you now find a “dual income” strategy approach. By ensuring that a majority of their mobile employees were able to secure a second income for their family through their partner/spouse’s employment abroad, corporations have been able to maintain the attractiveness of their international mobility programs while continuing to decrease their costs in such areas as

mobility premiums, spendable income, and in some cases hardship allowances - an area where savings are generally made (2). Thanks to both more attractive expatriation conditions, and a related corporate image of “genuine employer” taking care of their expats, the dual income approach has generated a competitive advantage.

APPLICABILITY AND LIMITS TO KEEP IN MIND Is this applicable to all industries and all locations? Unfortunately not.

This dual income approach works best if:

The locations where you send expats are major cities and not small remote locations and compounds. The bigger the local employment market, the better!

You send the majority of your expats to medium or high income countries. The higher the potential additional partners/spouses’ income, the more substantial his/her contribution will be. The development of new economical giants like China, India and Brazil is increasing the list of these mid income countries.

The profile of your international staff and sociologically related partners/spouse belongs to age group 1 (25-35) or age group 2 (35-45) and are highly educated. This will increase the marketability of the partner/spouse, and their related potential additional income.

Partners/spouses are given the right type of support to find work, resulting in a success rate (3) above 50%.

The length of your assignments allows the partner/spouse to be recruited locally and grow. Assignments under 2 years are challenging in this respect.

So can you implement this dual income approach, completely or partially, within your organization as well? NetExpat would be happy to assist you and share related best practices. Contact us at studies@netexpat.com for more information.

(1) Source Permits Foundation Spouse Survey 2013. (2) Contact us for more information on the supporting financial assumptions (3) The success rate is defined by the percentage of expat partners/spouses

succeeding in securing paid employment

White Paper January 2015

The “DUAL INCOME” Approach The objective of this white paper is to share the latest developments in expat partner/spouse assistance, with a specific focus on a trend known as the “dual income” approach applied by a growing number of multinationals