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Costing assignments

ECA can now provide a comprehensive set of benefits data for the one-off and annual costs associated with international assignments, taking the pain out of cost estimates. Ema Boccagni reports.

In a recent ECA policy survey, 41% of participants stated that cost containment was the biggest challenge in managing their mobility programme. Increased pressures to predict and justify the cost of both individual assignments and global mobility programmes has brought the need for more accurate forecasting and recording of the full costs involved with expatriation.

Cost estimates form part of the arsenal IHR can use to keep a check on costs, illustrate to management the full potential costs to the business of transfers, improve budgeting and develop better management reporting.

But many people find it challenging, if not impossible, to gather all the information they need to assess the full range of potential costs across such a large number of benefits, allowances and tax liabilities. This is where ECA’s new range of data can help.

To provide an accurate estimate, all costs incurred as a result of the assignment need to be considered. In costing an assignment it is important to make the list of potential costs as exhaustive as possible. In addition to the most obvious costs, such as salary, accommodation and schooling; items such as look-see visits, cultural awareness courses and language training need to be included as these are important extras that can add-up.

For a realistic cost estimate of the entire assignment you should look at the hypothetical costs in the posting year, the intermediate year(s) and the repatriation year separately, as some costs will only be applicable in certain years. For example, one-off costs such as look-see visits or work permits will only appear in the first year, while annual salary costs and other assignment benefits, such as host housing and schooling allowance, will be provided every year the assignee is abroad.

ECA’s cost estimates (available as part of ECAEnterprise or individually through our bureau service) incorporate the full suite of annual and one-time expenses, including salary, allowances, benefits and relocation costs so you don’t have to guess. If you do have your own data, you can choose to use that – and if you want to, you can add in bonus and pension details for added accuracy.

After all costs have been itemised, tax and social security calculations are done for the full assignment. You now have an accurate prediction of the full cost to the business.

Extract from an ECA Cost Estimate
Extract from an ECA Cost Estimate

Cost estimates from ECA

ECA can provide comprehensive cost estimates as part of its Assignment Management System, ECAEnterprise, or individually as a bureau service. For more information please get in contact with your ECA representative.

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