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The value of benchmarking in testing times

In times of relative normality, one of the foremost challenges for global mobility professionals is ensuring that their expats are paid both fairly and cost-effectively. Spending too much or too little on expat remuneration can prevent the success of assignments and place global mobility programmes under significant pressure. In light of the Covid-19 pandemic and the financial strain that companies around the world are experiencing as a result, it is likely that this challenge will be exacerbated. It is therefore important that assignment administrators have access to the benchmarking information they need to make sure their expat pay levels remain fit for purpose. Here we look at how the country-specific benchmarking data provided by ECA’s free annual MyExpatriate Market Pay Survey, which is open now, can help them with this task.

Where do your expats stand in the market?

In order to identify whether expats are being paid appropriately, it is essential to know how pay levels look in the same market. The MyExpatriate Market Pay Survey’s interactive MySalary graph makes this possible by enabling participants to clearly compare the salaries of their expats with others working in the same host country.

Net salary values for each job submitted to the survey are plotted on the relevant host country’s MySalary graph against an appropriate seniority level for that expat, displayed in ECA points. This level is determined by mapping to an external job grading system or an estimation based on the survey data provided. As well as the plotted points for each expat, the graph shows the average, as well as lower and upper quartile values at each seniority level. A red diamond highlights the position of your own job holders, providing a clear, personalised view of where their salaries lie in relation to the rest of the market for expats in that country.

The dynamic functionality of the MySalary graph allows for more precise benchmarking insights too. Participants can filter the data based on industry group or the salary system used to calculate an expat’s remuneration, enabling comparisons that are more tailored and potentially even more useful to the objectives at hand.

 

In practical terms, there are various scenarios in which these insights might be used to inform the decisions of global mobility teams. For example, the graph can function as an excellent tool to ascertain whether a reduction in salaries for expats in a particular country could be a feasible cost-cutting measure; or alternatively, whether an expat’s complaints of being paid too little compared to their peers are justified.

The local salary graphs, included in the survey reports for countries where robust salary data on local employees is available, can prove similarly useful. These graphs demonstrate the difference between average expat pay levels in a host country and those of their local counterparts. Among their practical uses is the way in which they can help participants assess the viability of switching from a home-based to a host-based salary system – an increasingly common move as companies look to save money on their global mobility programmes.

The full picture on expat remuneration

There are often more elements to the typical long-term assignment package than just the salary. The allowances and benefits that many expats are paid can increase the cost of an assignment substantially. As such, the ability to benchmark these elements of the package can be just as valuable to administrators wanting to keep their assignments economical.

The downloadable ‘Total Package Listings’ file contained in each MyExpatriate Markey Pay Survey country report provides an in-depth and anonymous record of the full remuneration package received by each expat. Alongside their net salary, the listings include any bonus and allowance amounts for housing, utilities and transport that the company pays, as well as whether education and club membership are company-funded. Participants can compare their provision of these elements with the rest of the market and can filter not only by industry group and salary system, but also by criteria such as family size on assignment, expat nationality and assignment type to obtain a truly focused benchmark.

Home country Family size ECA points Net take home pay Accommodation Accommodation value
  France M+1 161 161624 Full allowance 64800
Your job holder France M+1 149 234599 Full allowance 60000
  Hong Kong M+1 129 139106 Company pays 25560
  India M+1 110 171264 Full allowance 27600
Your job holder Germany M+1 107 179436 Company pays 66000
  Switzerland M+1 98 88633 Full allowance 49800
  New Zealand M+1 93 116629 Employee pays ~
Your job holder Switzerland M+1 85 168933 Full allowance 60000
  Germany M+1 73 100695 Company pays 57300
Your job holder New Zealand M+1 68 71320 Full allowance 48000

 Your job holder

The provision and value of allowances and benefits can vary significantly between expats; some may see little or no increase to their package above the salary they receive, whereas others may have their total compensation doubled due to high accommodation or bonus payments. In these instances, comparing only an expat’s salary with that of their peers is likely to be misleading – it could cause an expat to incorrectly perceive that they are being underpaid, or perhaps allow the payment of unaffordable housing allowances to go unnoticed by assignment administrators. Benchmarking the full compensation package is key to resolving such situations and underlines the benefit to global mobility teams of having this data at their disposal.

In addition, the reports include sections outlining best practice in policy fundamentals and benefits provision for long-term assignments in each host country. These can be a useful starting point for companies looking to devise or redevelop a policy for assignments to a certain country, while those with established assignee operations may be interested to learn of areas in which their practices differ.

A vital resource in a turbulent period

The emergence and ongoing effects of the Covid-19 pandemic have resulted in considerable upheaval for the global economy and international travel, which, in turn, has caused unprecedented disruption to global mobility operations. Amid lockdowns, quarantine measures and disturbed working arrangements, international assignments have been cancelled, postponed or terminated and expats repatriated, either at their own request or that of their employer, or as mandated by governments.

However, significant uncertainty remains for the large number of assignments that have continued or are planned to resume soon. Global mobility teams are faced with the test of ensuring that these assignments remain on course to meet their objectives, at a time when economic pressures are forcing most companies to cut costs. In this context, benchmarking has a pivotal role to play.

The pandemic’s lack of precedent, its continuing influence and the varying extent of its impact on different economies all add further complication to the task of balancing assignment savings with keeping assignees happy. While administrators may previously have had confidence in their remuneration levels for expats, this may no longer be the case. For example, they might be considering the implementation of pay freezes or cuts for the first time and are worried that a misjudgement with these measures could upset assignees and endanger strategically-critical assignments.

Participation in this year’s MyExpatriate Market Pay Survey can help mitigate against such risks. By providing a vital understanding of the specific impact that the pandemic has had on expat pay levels in different host countries, our survey reports enable companies to evaluate how and where they can lower the cost of their global mobility programmes most effectively, without endangering their strategic goals. In this way, the benchmarking insights that the survey offers are perhaps more valuable than ever.

  FIND OUT MORE

ECA’s MyExpatriate Market Pay reports provide an in-depth and personalised guide with which to compare your current expatriate salary and benefits policies against 10,000 jobs across a wide range of industry groups in 130 countries around the world. The survey is open until 31 August and participants receive free country-specific benchmarking reports for each country that they submit data for.

  Please contact us to speak to a member of our team directly.

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