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EXPATRIATE MANAGEMENT IN ASIA 2013 EMEA EXPATRIATE MANAGEMENT CONFERENCE 11-12 APRIL 2013 - LISBON Phil Stanley Singapore
EXPATRIATE MANAGEMENT IN ASIA
2013 EMEA EXPATRIATE MANAGEMENT CONFERENCE 11-12 APRIL 2013 - LISBON
Phil Stanley
Singapore
MERCER 1 April 12, 2013
The Demise of the Expatriate Employee?
MERCER 2 April 12, 2013
Worldwide
55%
67%
48%
31%
30%
49%
14%3% 3%
Long-Term
Assignments
Short-Term
Assignments
Locally-Hired
Foreigners
Increasing Use No Change Decreasing Use
Asia Pacific
51%
70%
51%
38%
29%
49%
11%1%
Long-Term
Assignments
Short-Term
Assignments
Locally-Hired
Foreigners
Increasing Use No Change Decreasing Use
The Demise of the Expatriate Employee? Majority of organizations are increasing their use of expatriate staff
Source: Mercer’s 2012 Worldwide Survey of International Assignment Policies and Practices
MERCER 3 April 12, 2013
GLOBAL MOBILITY THEN GLOBAL MOBILITY NOW
• Limited duration assignments
• Primarily from HQ
Limited duration assignments plus:
• Permanent/Indefinite transfers
• Talent from developing countries
• “Global Nomads”
• Local / Direct foreign hires
• Localization
• How to define “home”?
However, Defining “Expatriate Employee” Now More Challenging
MERCER 4 April 12, 2013
Getting “from here to there” requires more policies and tools
Mobility Pattern Policy Tools
There and back Long-Term Assignment Balance Sheet
Staying there Localisation Net to Gross Analysis Local or Local Plus
Moving there Permanent Transfer Net to Gross Analysis Local or Local Plus
Already there Locally Hired Foreigner Local or Local Plus
From there Returnee Local or Local Plus
Short Term Assignment Per Diem There and back (quick)
MERCER 5 April 12, 2013
29%26%
21%24% 23%
19%16%
13% 13%8%
8%
7%
9%6%
4%7%
5%
2% 2%
3%
63%67%
70% 70%73% 74%
79%85% 85%
89%
China Indonesia Singapore Thailand Philippines Hong Kong Japan Taiwan South Korea Malaysia
International Assignment Local Plus / Hybrid Local
Employee Populations - Executives Type of Employment Package
Source: Mercer 2012 Total Remuneration Survey, All Industries
MERCER 6 April 12, 2013
6% 5% 4% 4% 5% 4% 2% 3% 1% 2%
3% 4% 4% 3% 2% 2%2% 1% 2%
91% 91% 92% 93% 93% 94% 96% 96% 97% 98%
Singapore Indonesia China Hong Kong Malaysia Thailand Philippines Taiwan Japan South Korea
International Assignment Local Plus / Hybrid Local
Employee Populations - Management Type of Employment Package
Source: Mercer 2012 Total Remuneration Survey, All Industries
MERCER 7 April 12, 2013
When is Local Plus used?
Location Direct/ Local Foreign Hire
Localised
Expatriate
International
Permanent
Transfer
Returnee Fixed-term
Assignment
China
Hong Kong
Singapore
Prevalent Less common / limited Never or rarely provided
(Senior positions)
Most Prevalent
MERCER 8 April 12, 2013
Components of a Local Plus Package
Expatriate Allowances or Benefits China Hong Kong Singapore
Cost of Living / Goods & Svcs Allowance
Mobility / Foreign Service Premium
Hardship Allowance
Housing
Education
Home Leave
Social Security / Pension Enhanced MPF or supplemental
CPF or cash in
lieu
Medical Enhanced or Int’l Plan
Local Local
Usually cash, typically a reduction from “full”
expatriate housing amount
Prevalent Less common / limited Never or rarely provided
MERCER 9 April 12, 2013 Source: Mercer Total Remuneration Survey, All Industries – Singapore
Singapore Local vs. local plus comparison
0
100,000
200,000
300,000
400,000
500,000
600,000
52 53 54 55 56 57 58 59 60 61 62 63
IPE Position Class
(SG
D)
Local Base Salary Local Plus Base Salary Local Total Cash (Comp 3) Local Plus Total Cash (Comp 3)
27%
33%
51% 30%
47%
42%
Total Cash Median - Local Plus vs Local
Base Salary Median - Local Plus vs Local
MERCER 10 April 12, 2013
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
52 53 54 55 56 57 58 59 60 61 62 63
IPE Position Class
(HK
D)
Local Base Salary Local Plus Base Salary Local Total Cash (Comp 3) Local Plus Total Cash (Comp 3)
Hong Kong Local vs. local plus comparison
36%
60% 18%
37%
22%
45%
Total Cash Median - Local Plus vs Local
Base Salary Median - Local Plus vs Local
Source: Mercer Total Remuneration Survey, All Industries –Hong Kong
MERCER 11 April 12, 2013
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
52 53 54 55 56 57 58 59 60 61 62 63
IPE Position Class
(RM
B)
Local Base Salary Local Plus Base Salary Local Total Cash (Comp 3) Local Plus Total Cash (Comp 3)
Shanghai Local vs. local plus comparison
143%
141% 64%
76%
33%
48%
Total Cash Median - Local Plus vs Local
Base Salary Median - Local Plus vs Local
Source: Mercer Total Remuneration Survey, All Industries –Shanghai
MERCER 12 April 12, 2013
Is Housing Assistance Necessary?
MERCER 13 April 12, 2013
Typical Expatriate (Non Local) Housing Costs Asia has some of the highest housing costs in the world
Source: Mercer’s Expatriate Accommodation Costs Reports – September 2012
Average Monthly Rental Cost
3 Bedroom Moderate Unfurnished Apartment
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Hon
g Kon
g
Tok
yo
Lond
on
Mos
cow
New
York
Singa
pore
Sha
ngha
i
Mum
bai
Syd
ney
Seo
ul
Sao
Pau
lo
Los Ang
eles
Man
ila
Rom
e
Cop
enhag
en
Ban
gkok
Dub
ai
Jaka
rta
Mex
ico City
Bue
nos Aire
s
Vienn
a
Fra
nkfurt
(US
D)
MERCER 14 April 12, 2013
Local Plus – Housing Assistance Singapore
Average Monthly Housing Allowance/Benefit
5,300
3,000
1,800
830
0
1,000
2,000
3,000
4,000
5,000
6,000
Executive (all levels) Management (21 & 22) Management (23 & 24) Professionals (all levels)
Job Level
(SG
D)
Source: Mercer Total Remuneration Survey, All Industries – Singapore
MERCER 15 April 12, 2013
Local Plus – Housing Assistance Hong Kong
Average Monthly Housing Allowance/Benefit
36,150
18,200 17,000
11,850
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Executive (all levels) Management (21 & 22) Management (23 & 24) Professionals (all levels)
Job Level
(HK
D)
Source: Mercer Total Remuneration Survey, All Industries – Hong Kong
MERCER 16 April 12, 2013
Local Plus – Housing Assistance Shanghai
Average Monthly Housing Allowance/Benefit
20,000
11,850
8,0006,000
0
5,000
10,000
15,000
20,000
25,000
Executive (all levels) Management (21 & 22) Management (23 & 24) Professionals (all levels)
Job Level
(RM
B)
Source: Mercer Total Remuneration Survey, All Industries – Shanghai
MERCER 17 April 12, 2013
Considerations for Locally-Hired Foreigners/Expats
• What are your key talent competitors doing?
• Let exceptions be guided by principle so you avoid precedents that limit
your future options
• How will practices vary by location? Tax environment?
• Consider all-purpose allowances rather than specific allowances
• Social security and benefits can be tricky
• Trends are evolving steadily, carefully
• Avoid extremes; the aim is to strike the right balance
MERCER 18 April 12, 2013
Questions?
PHIL STANLEY | +65 6398 2595 | [email protected]
