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Mercer 2011 Mobility Trends Webcast Americas
 

Mercer 2011 Mobility Trends Webcast Americas

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    Mercer 2011 Mobility Trends Webcast Americas Mercer 2011 Mobility Trends Webcast Americas Presentation Transcript

    • Mercer webcast April 2011 Latest Trends in International Assignment Policies and Practices James ONeill, Chicago Dan Mikes, Chicago www.mercer.com
    • Mercer’s 2010 Worldwide Survey of International AssignmentPolicies 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 CutsMercer webcast 1
    • Number of expatriates (2010) 1000 Average 860 Median 800 600 400 257 258 200 127 26 20 24 41 0 WW Americas AsiaPac EMEAMercer webcast 2
    • Changes implemented in last two years 60.0% Americas 2010 Americas 2008 50.0% AsiaPac 2010 AsiaPac 2008 EMEA 2010 40.0% EMEA 2008 34.8% 33.3% 31.3% 25.9% 25.6% 30.0% 25.3% 24.1% 24.0% 23.0% 22.8% 22.0% 21.7% 21.0% 20.0% 19.0% 18.0% 20.0% 14.0% 12.0% 10.0% 0.0% Decreased use of expatriates Heavier reliance on localizing Increased use of efficient cost- em ployees of-living allow ancesMercer webcast 3
    • Changes implemented in last two years 60.0% WW 2010 WW 2008 Americas 2010 50.0% 48.0% Americas 2008 44.0% 44.0% 42.0% AsiaPac 2010 AsiaPac 2008 40.0% 36.8% 34.3% EMEA 2010 32.8% EMEA 2008 31.3% 30.0% 20.0% 10.0% 0.0% None of the aboveAll potential choices were decreasing use of expatriates, reduced incentives offered, reduced vendor fees, heavier reliance on localizingemployees, increased use of efficient cost-of-living allowances, and changed tax policy.Mercer webcast 4
    • Global mobility policy elements under reviewWorldwide & Americas WW Americas EMEA Asia Pac 2010 2010 2010 2010 None 12.2% 12.7% 9.4% 10.8% Global policy development 39.1 42.6 40.6 33.3 Intraregional policy development 20.0 23.7 20.1 26.5 Policy development for assignments to HQ country 13.7 13.1 8.1 12.7 Short-term assignment policy development 34.3 40.4 39.7 35.3 Multi-tier policy development 28.3 35.1 28.2 32.4 Delivery of expatriate compensation 23.6 23.9 23.9 30.4 Expatriate localization 31.3 35.7 32.9 44.1 Implementation of cost-effective COLA 21.1 18.9 23.1 33.3 Foreign service and/or mobility premiums 20.1 17.4 17.5 14.7 Hardship premiums 21.8 13.1 19.7 24.5 Housing policies 26.9 29.5 28.6 31.4 Tax equalization 22.8 26.5 23.5 32.4 Car practices 15.2 15.1 15.0 21.6 Overall cost-effectiveness 45.8 50.1 44.0 43.1 Overall competitiveness 29.5 38.7 24.4 36.3 Program administration 29.9 34.6 26.1 35.3Mercer webcast 5
    • Use of expatriates70.0% WW 2010 70.0% Americas 201060.0% WW 2008 Americas 2008 55.0% 60.0% 52.0%50.0% 47.1% 47.4% 50.0%40.0% 40.0% 27.6% 28.6%30.0% 25.3% 25.0% 30.0% 25.0% 24.0% 23.0% 20.0%20.0% 20.0%10.0% 10.0%0.0% 0.0% Increasing Decreasing No Change Increasing Decreasing No Change70.0% AsiaPac 2010 70.0% EMEA 2010 AsiaPac 2008 61.0%60.0% 60.0% EMEA 2008 52.0%50.0% 44.1% 50.0% 46.8%40.0% 34.3% 40.0% 30.0% 28.8%30.0% 30.0% 24.5% 23.0% 21.6% 18.0%20.0% 20.0% 16.0%10.0% 10.0% 0.0% 0.0% Increasing Decreasing No Change Increasing Decreasing No ChangeMercer webcast 6
    • Assignment length trends70.0% WW 2010 70.0% Americas 201060.0% WW 2008 Americas 2008 54.4% 60.0% 52.0% 51.5% 48.0%50.0% 50.0%40.0% 40.0% 29.0% 28.0% 28.4%30.0% 24.8% 30.0% 16.8% 16.0%20.0% 20.0% 14.1%16.0%10.0% 4.0% 4.0% 10.0% 6.1% 7.0%0.0% 0.0% More short More long No change Dont know More short More long No change Dont know term term term term70.0% AsiaPac 2010 70.0% EMEA 201060.0% AsiaPac 2008 52.0% 60.0% EMEA 2008 51.0% 52.4%50.0% 50.0% 50.0%40.0% 40.0% 36.0% 27.5% 29.2%30.0% 26.0% 30.0% 21.0% 17.6%20.0% 20.0% 15.5% 11.0%10.0% 3.9% 10.0% 2.0% 3.0% 4.0% 0.0% 0.0% More short More long No change Dont know More short More long No change Dont know term term term termMercer webcast 7
    • Highest use of expatriates – top five locationsInbound100.0% 100.0% WW Americas75.0% 75.0% 63.7% 60.1%50.0% 41.3% 50.0% 43.0%25.0% 25.0% 18.0% 15.1% 15.1% 17.3% 17.0% 12.7% 0.0% 0.0% China USA India UAE Brazil China USA UAE India Brazil100.0% AsiaPac 100.0% EMEA 73.9% 75.0% 75.0% 57.3% 50.0% 46.9% 50.0% 21.6% 27.1% 25.0% 18.2% 18.2% 25.0% 21.9% 18.8% 13.6% 0.0% 0.0% China USA India Australia Japan China USA UAE India BrazilMercer webcast 8
    • Highest use of expatriates – top five locationsOutbound100.0% 100.0% WW Americas 84.4% 75.0% 75.0% 55.2% 50.0% 50.0% 29.4% 22.3% 25.0% 17.0% 25.0% 17.9% 14.1% 13.4% 12.1% 11.3% 0.0% 0.0% USA Japan India Canada Australia USA Canada India Australia China100.0% AsiaPac 100.0% EMEA75.0% 75.0% 46.9% 51.7%50.0% 40.6% 50.0% 29.7% 31.9% 21.9%25.0% 25.0% 18.1% 15.5% 14.7% 7.8% 0.0% 0.0% Australia USA India China Japan USA India Australia China CanadaMercer webcast 9
    • Compensation approach for global assignment 80.0% WW 71.3% 69.3% Americas 67.2% 70.0% AsiaPac EMEA 60.0% 52.3% 50.0% 40.0% 27.9% 30.0% 16.3% 14.5% 14.1% 20.0% 13.0% 12.2% 12.8% 7.0% 7.0% 6.6% 6.5% 5.8% 5.6% 5.6% 5.1% 5.1% 10.0% 4.7% 3.7% 3.8% 3.8% 3.5% 3.0% 2.8% 2.0% 0.0% Hom e based Headquarters Host based Higher of Hom e plus Host plus Other than balance sheet based balance approach hom e or host approach approach above approach sheet approach approachMercer webcast 10
    • Delivery of expatriate remuneration 46.5% 44.7% WW 40.5%50.0% Americas 34.6% 31.5%40.0% AsiaPac 27.6% EMEA 21.9% 21.9% 19.4%30.0% 19.0% 18.3% 16.5% 16.2% 14.6%20.0% 9.9% 6.2% 4.9% 2.5% 1.9% 1.5%10.0%0.0% Pays entirely in hom e Pays entirely in host- Pays in third-country Splits pay betw een Handles on a case-by- currency country currency currency hom e- and host- case basis country currencies Mercer webcast 11
    • Split pay 44.8% WW 44.4%50.0% Americas 34.8% 31.5%40.0% AsiaPac 26.8% 24.6% 22.9% EMEA 19.7%30.0% 17.2% 17.2% 15.5% 15.3% 14.8% 13.4% 13.3% 12.2% 10.0%20.0% 8.7% 7.8% 5.2%10.0% 0.0% Splits according to Splits based on Splits according to Splits based on tax Splits based on expatriate’s w ishes consultants’ com pany policy considerations governm ent recom m endations regulationsMercer webcast 12
    • Provision of incentive premium WW Americas 27.80% 36.70% 42.80% 48.50% 20.50% 19.50% 16.80% 13.50% AsiaPac EMEA On-going paym ent (foreign-service 37.10% prem ium ) 40.20% 36.90% 37.40% Lum p sum am ount (m obility prem ium ) Yes, other Does not provide 23.70% 17.50% 17.60% 18.90%Mercer webcast 13
    • Calculation of incentive paymentsForeign 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 $4,983Mercer webcast 14
    • Tax approaches100.0% WW 2010 100.0% Americas 2010 WW 2008 83.1%85.0% Americas 2008 80.0% 76.1%75.0% 75.0%50.0% 50.0%25.0% 25.0% 4.5% 5.0% 6.5% 5.0% 4.8% 4.0% 3.7% 4.0% 0.0% 0.0% Tax equalize Tax protect Laissez Faire Tax equalize Tax protect Laissez Faire100.0% AsiaPac 2010 100.0% EMEA 2010 AsiaPac 2008 EMEA 2008 72.4% 75.0% 70.0% 75.0% 65.0% 61.6% 50.0% 50.0% 25.0% 25.0% 13.8% 6.1% 8.0% 8.2% 6.0% 6.9% 9.0% 8.0% 0.0% 0.0% Tax equalize Tax protect Laissez Faire Tax equalize Tax protect Laissez FaireMercer webcast 15
    • Expatriate housing policiesAmericas, AsiaPac, and EMEA Americas 2010 80.00% Americas 2008 AsiaPac 2010 65.0% 60.4% AsiaPac 2008 55.3% 60.00% EMEA 2010 50.00% EMEA 2008 49.0% 44.60% 37.60% 33.00% 40.00% 31.0% 26.8% 20.0% 16.8% 15.8% 14.00% 12.00% 14.0% 20.00% 10.2% 8.0% 8.0% 5.70% 7.7% 6.9% 6.0% 3.00% 0.00% Com pany pays housing Com pany pays housing Com pany pays a housing Com pany m akes no costs but deducts hom e- costs and does not deduct differential contribution to foreign- country offset as a hom e housing offset housing costs em ployee’s contribution (free assignm ent housing)Mercer webcast 16
    • Expatriate housing policiesWorldwide 80.0% WW 2010 WW 2008 60.0% 46.0% 43.3% 41.4% 39.0% 40.0% 20.0% 11.0% 9.0% 6.3% 4.0% 0.0% Com pany pays housing Com pany pays housing Com pany pays a housing Com pany m akes no costs but deducts hom e- costs and does not deduct differential contribution to foreign- country offset as a hom e housing offset (free housing costs em ployee’s contribution assignm ent housing)Mercer webcast 17
    • Housing: further analysis (of Americas cut) Provides Home Sales Provides Property Provides Joint Provides Both Assistance¹ Management² Neither Distribution (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 differential 1% 2% 6% 4% (12%)Makes no contribution to host housing costs 0% 0% 1% 4% (6%)1) Provides home sales assistance, but not property management2) Provides property management, but not home sales assistance Mercer webcast 18
    • Housing: further analysis (of Americas cut) Conditional Provides Home Provides Property Provides Provides Both Distribution Sales Assistance¹ Management² NeitherPays 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 differential 8% 15% 47% 30% (12%) Makes no contribution to host housing costs 4% 7% 21% 68% (6%)1) Provides home sales assistance, but not property management2) Provides property management, but not home sales assistance Mercer webcast 19
    • Spousal support Provides Spousal Support 60.0% 56.5% 55.0% 53.1% 47.1% 46.0% 49.0% 39.0% 40.0% 32.0% 2010 2008 20.0% 0.0% WW Americas AsiaPac EMEAMercer webcast 20
    • Usage of efficient purchaser indices for COLA 66.70%80.00%70.00% 54.70% 49.20%60.00% 44.90% 43.50% 42.30% WW 36.60%50.00% 31.90% Am ericas40.00% AsiaPac30.00% EMEA 10.10%20.00% 7.40% 7.30% 2.30% 2.90% 1.00% 2.30% 1.80% 1.40% 1.40% 0.00% 0.00%10.00%0.00% From the start of From the start of After a transition Handles on a case- No the assignm ent the assignm ent period by-case basis w ith an additional protection allow ance Average number of months: • WW: 22.5 • Americas: 7.1 • AsiaPac: ID • EMEA: 20.3 Mercer webcast 21
    • Market basket items modification 70.0% 61.3% WW 60.7% Americas 60.0% 55.2% 53.5% AsiaPac EMEA 50.0% 38.7% 35.2% 40.0% 27.0% 30.0% 23.1% 21.1% 20.2% 16.7% 16.9% 20.0% 12.4% 11.5% 8.5% 6.4% 10.0% 0.0% Does not m odify m arket Transportation Furnishings Medical basketMain reason for modifying the market basket items is to avoid duplication of payment of items already included in policy.Mercer webcast 22
    • Transportation allowanceAmericas, AsiaPac, and EMEA Americas 2010 Middle Management and Above Americas 2008 AsiaPac 2010 45.0% AsiaPac 2008 39.0% 38.2% EMEA 2010 40.0% 36.0% 35.0% 35.0% EMEA 2008 33.50% 33.30% 35.0% 31.0% 30.9% 29.20% 30.0% 27.50% 30.0% 25.0% 18.60% 18.20% 17.0% 20.0% 15.0% 13.70% 14.0% 11.00% 15.0% 11.0% 11.0% 10.0% 9.7% 9.0% 9.0% 8.10% 6.90% 10.0% 7.0% 6.2% 6.0% 5.0% 0.0% Alw ays provide Provide, if expatriate had Provide, but only w hen Provide, but only in Not provide use of a com pany car at job requires a car countries w here it is the hom e location local practice for com parable positionsMercer webcast 23
    • Transportation allowanceAmericas, AsiaPac, and EMEA Americas 2010 Other Expatriates Americas 2008 AsiaPac 2010 40.70%45.00% 41.0% AsiaPac 2008 EMEA 201040.00% 36.0% EMEA 2008 33.30% 31.90% 31.40%35.00% 30.50% 31.0% 30.0%30.00% 25.0% 21.30%25.00% 21.0% 19.50% 20.0% 18.00% 18.0% 17.00% 16.70%20.00% 16.0% 15.0% 12.70% 13.0% 11.90% 12.0%15.00% 10.60% 8.0%10.00% 6.0% 4.40% 5.0% 5.00% 1.00% 0.00% Alw ays provide Provide, if expatriate had Provide, but only w hen Provide, but only in Not provide use of a com pany car at job requires a car countries w here it is the hom e location local practice for com parable positionsMercer webcast 24
    • Transportation allowanceWorldwide 45.0% Middle Management and Above 37.0% 40.0% 34.1% 35.0% 30.0% 29.6% 30.0% 25.0% 20.0% 15.7% 13.0% 12.6% 15.0% 11.0% 8.0% 8.0% 10.0% 5.0% 0.0% Always provide Provide, if expatriate had use Provide, but only when job Provide, but only in Not provide of a company car at the home requires a car countries where it is local location practice for comparable positionsMercer webcast 25
    • Transportation allowanceWorldwide 45.0% Other Expatriates 40.0% 31.7% 35.0% 31.0% 30.0% 30.0% 25.9% 25.0% 19.2% 18.5% 18.0% 20.0% 15.0% 15.0% 10.0% 5.0% 4.7% 5.0% 0.0% Always provide Provide, if expatriate had use Provide, but only when job Provide, but only in countries Not provide of a company car at the home requires a car where it is local practice for location comparable positionsMercer webcast 26
    • Questions and contacts Questions James O’Neill Chicago Please type your questions in the web Q&A and we will do our best to +1 312 917 9683 answer as many questions as we have time for. james.oneill@mercer.com 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 Dan Mikes your questions and then click on the ‘ASK’ button. Chicago +1 312 917 9441 daniel.mikes@mercer.com www.mercer.com/webcasts View past recordings and sign up for upcoming webcastsMercer webcast 27
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