January 2010
Mercer’s Expatriate Management
Service Offerings to Expatriate
Compensation Managers
Sue Filmer, London
Yvonne Traber, Geneva
Olivier Meier, London
Mercer Limited is authorised and regulated by the Financial Services Authority
Registered in England No. 984275 Registered Office: 1 Tower Place West, Tower Place, London
EC3R 5BU
Managing expatriates
For many organisations the mobility of employees is an integral part of carrying out business. Indeed, the
very idea of a “home country” is disappearing for some as their organisations, like their markets, become
truly global. Workforces too are becoming increasingly multi-national as increasing numbers of individuals
with transferable skills and capabilities pursue international career opportunities.
In this environment companies find that they face significant challenges in managing their internationally
mobile employees. Of particular challenge to expatriate and compensation managers is the need to maintain
efficient international assignment policies and reward practices that are aligned to the business strategy, fit
within commercial constraints and match international employees’ reward and career aspirations.
Questions for consideration:
Mercer’s 2008/2009 Benefits Survey for Expatriates and Globally Mobile Employees
Mercer
What drives your company to send employees on
international assignments?
 Career and leadership development?
 Business expansion?
 Filling a position requiring technical skills?
 Fulfilling a project requirement?
Who are your expatriates?
 Seasoned executives?
 Skilled professionals?
 Rising talents?
Where are they coming from?
 Headquarters
 Operating companies
 Multiple locations
 International hires
 Nomads
Where are they going to?
 Home  host  home
 Location to location
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Managing expatriate talent and reward
Many companies struggle to manage cross-border mobility well. From an employee perspective the various
elements of the mobility process often appear disconnected and the experience of moving locations can be
frustrating. From a business perspective mobility decisions often appear opportunistic rather than managed
with strategic intent. To do international mobility well expatriate talent, reward and career management
strategies and policies need to be aligned and coordinated:
 Expat talent management is about ensuring the business has the international talent it needs to be successful by
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predicting the future demand - quantity, quality and location – and planning to match this with supply - internal and
external talent
Expat reward management is about providing an expatriate compensation package that is competitive and rewards
those who add value to the business whilst ensuring mobility costs make good commercial sense
Expat career management is about influencing the career decisions of targeted individuals that the business needs to
retain and develop for current and/or future business success using levers such as compensation, career planning and
proactive assignment lifecycle management
Done well, the business motivates and retains the international talents it needs for business success.
Expatriate talent, reward and career management includes:
The ROI is:
Talent and reward segmentation on performance, potential and skills
Effective and economic deployment of international talent
Providing genuine career alternatives and reward options to key talent
Minimising the avoidable loss of international talent
Ensuring positive career outcomes for international talent
Building the pipeline of future international talent
Mercer
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Linking expatriate reward and talent management
In many organisations reward management and talent management are two distinct functions. While talent
management is usually not part of the responsibility of expatriate and compensation managers, the talent
and career management aspects of expatriation have a significant impact on expatriate policies and
remuneration packages.
Typical Expatriate Managers issues:
How can I motivate
employees to accept
assignments in nondesirable locations and the
limit of financial incentives
e.g. expat allowances and
premiums?
How can the company
retain expatriates
particularly at the end of
the assignment?
How can we limit policy
benchmarking without taking
into account the career
aspects and opportunities, or
lack of opportunities, offered
by the company?
How do I develop policies
such as expat terms and
conditions that are in line
with desired expat
population segmentation
and talent management
objectives?
Understanding the talent management implications and being able to take them into account when
developing expat policies or producing mobility business cases is critical for expatriate managers.
In addition, the growing pressure on expatriate costs combined with a need to manage an increasingly
complex globally mobile workforce lead many companies to segment their expatriate policy and align
remuneration with talent segmentation.
Mercer provides its clients with a pragmatic response to the growing intricacy of expatriate talent
and remuneration issues though practical workshops, insight analysis and comprehensive advisory
services as well as benchmarking data, tools and technology.
Mercer
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Trends in the Management of
Expatriate Talent and Reward
Trends in the global professional workforce
Going forward, effective expatriate management will require a greater level of co-ordination and alignment
between business leaders, talent management, compensation and benefits, third-party providers and, of
course, the employee and his/her family. This will need to be achieved through consistent mobility/HR
policies and practices in all international locations, and effective and targeted communication.
Expatriate management trends seen in the last
12 months:
 More differentiation and segmentation of the
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expatriate population
Different policies depending on position level and
purpose of the assignment
Stronger differences according to industry sector
Increase of localizations
Increase of short term and project based
assignments
More interest for international pay structures for the
‘global nomads’ population
Less exceptions and greater transparency
Cost awareness, more control and clearer business
objectives
Better communication and monitoring
Expatriate management trends anticipated in the
longer term:
 Increasing numbers of internationally mobile employees
 A variety of assignment types, generations and employment
expectations who may have very different (personal and
career) objectives for taking an assignment
 One size expatriate talent and reward policies will not fit all
# of
Global
Professionals
DE
M
AN
D
SelfPropelled
Globally Mobile
Professionals
(Global Citizens)
Local Executives
with Global Skills
& Perspectives
Company-Sponsored Expatriates
1960 1970 1980 1990 2000 2010 2020 2030 2040
YEAR
Mercer
Source: IMD
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Segmentation to determine the primary purpose of mobility and the
appropriate compensation and benefits packages
There is a growing interest in expatriate segmentation. Expat segmentation enables a company to gain a deeper understanding
into the reasons why the business needs to move people around, who should be included as a member of the mobile workforce,
and the appropriate compensation packages. The most important criteria for segmentation should be the business drivers whilst
the length of an assignment is important but is a secondary consideration. Together they inform the development and
implementation of the co-ordinated talent and reward policies and practices.
High
Development Value
Low
International Learning
and Developmental
Experiences
Emerging / HiPo talents
Key Strategic
Individuals
Top strategic talents /
The Most Valuable Players
Opportunistic moves
Key experienced
professionals
Volunteers / Own personal
career & life objectives
Key skill / Resource
deployment
Primary driver: business-led resource planning and deployment
Low
High
Corporate
Value Focus
Host
Importance of expatriate assignment
Expatriate talent segmentation aligned with the mobility policy
Expatriate talent segmentation
Primary driver: corporate-led career pathways and succession management
Short term
assignee
Long term
assignee
Key Strategic
individuals
(MVP)
Key
Experienced
individuals
Global nomad
High Flyer
Expat +
Expatriate
Emerging Talent
Development
Local +
Volunteers
Local
Good segmentation
provides
Business
Value insights into:
Length of expatriate assignment
 Current and future expatriate populations
 International talent management and reward issues and solutions
 Minimising the attrition rate of key expatriate talent
 Total rewards strategy to ensure compensation alignment with mobility and talent management priorities
 Governance and processes required to effectively manage and reward the differing internationally mobile
talent pools
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The talent perspective
Why do your international talents choose to remain in your company?
Organisations are increasingly seeing their international talents as a distinct and highly valuable talent
group, and with this in mind ask themselves whether their international talents believe:
 International experience is valued by the business?
 International work is rewarded fairly?
 Taking part in international development leads to faster promotions or provides greater career choices?
 Appropriate levels of effort is put into retaining and motivating international talent?
Talent management is not easy, and international talent management brings additional challenges with it including:
 Having a reward proposition that encourages and facilitates mobility for key talent groups and provides
appropriate incentives to encourage employees to accept assignments
 Maintaining a global talent and career management infrastructure that is aligned with the global reward
strategy to provide a healthy pipeline of mobile talent that can be deployed across the global operations
 Career movement and on-going talent, performance and reward management of individuals across
organisational, geographic and cultural boundaries
 Providing regular, motivational and informed developmental and next-move career discussions with a
dispersed population to ensure skills and capabilities gained in one location are utilised, developed and
rewarded in subsequent assignments
 Offering consistent and competitive expatriate packages globally and having market benchmarking data that is
relevant to specific international talent categories
With an increasing top management focus on ensuring the retention of key international talent and the value
of the commercial return on international mobility, there is a growing interest in ensuring alignment between
the management of international talent and the reward of international talent.
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How can Mercer help clients?
Managing Expatriate Talent - how can Mercer help?
 Mercer can help you address your expatriate management challenges by working with you to:
 Develop the right international talent strategy, map, profiles, career paths and practices to
achieve the required business results
 Define the right compensation & benefit models adapted to the purpose of the assignments
 Design the right expatiate management processes and infrastructure
 Mercer’s international talent and compensation services fall into three categories:
The RIGHT
International
Strategy
Mercer
The RIGHT
International Policy
& Operational
Processes
The RIGHT
International
Knowledge &
Technology
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1. Expatriate management workshop to explore the challenges with
the current expatriate management policies and practices
Objectives
Mercer’s Expatriate Management Workshops are brainstorming sessions designed to analyse and
discuss in detail a company’s policy and practices. During the session Mercer’s mobility experts
provide benchmarking advice and facilitation to assist HR teams address specific expatriate
management issues or more generally to conduct an audit of the company’s situation.
Format
A half-day or a one day in-house session. A preliminary discussion with the HR team takes place
prior the workshop to clarify needs and expectations as well as to gather information about the
company practices and demographics.
Added value
Access to a pool of expert covering all aspects of expatriate management (including compensation,
benefits, talent management, healthcare, communication and HR processes) and offering a holistic
approach to expatriate management.
Mercer’s workshops provide HR teams with an opportunity to review and discuss in detail their
policies and practices before preparing a business case for management to support change or before
embarking on a major investment or project, e.g. new policy, centralisation/decentralisation,
outsourcing.
Pricing guide: Euro 2.5K half-day session / Euro 4.5K one-day session / Euro 7K two-day session
Mercer
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2. Analysis of the current expatriate policies and practices to arrive
at recommendations for improvement
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Data and
Diagnosis
 Understand future
business mobility
requirements
 Translate business
needs and key
workforce issues into
global mobility
imperatives
Proce
ss
integr
ation
egy
and
Inten
t
 Update/create mobility
strategy to better fit
future business needs
 Gather data on current  Conduct gap analysis
state from multiple
perspectives (e.g.,
business leaders,
assignees)
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2Strat
 Facilitate workshop to
validate strategy;
prioritize gaps to close
 Identify ROI measures
 Define required
process integration
 Determine specific
changes required to
drive desired mobility
strategy and assignee
experience
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Imple
menta
tion
 Create multi-year plan
for executing and
implementing
 Prioritize actions
 Design and model
options for integrating
mobility processes
 Outline service
delivery model, roles,
linkage, information
flow requirements
Pricing guide: Typical consulting fees Euro 15K-Euro 30K
Mercer
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3. Design and implementation of a new and integrated reward and
talent strategy, policy and practices for effective expatriate
management
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Assess the
business context
 Review of existing
Desig
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2
Diagn
ostic
analy
sis
 Employer perspective -–

n the
expat
riate
strate
gy
Production of the
Executive Interviews
expatriate talent and
expatriation, reward and
rewards strategy
talent strategies, policies,
 Employee perspective –
documents and data
Web based survey
 Draft rewards and talent
policies, processes and
 Workshops and interviews
 External perspective operating model
with stakeholder groups
Mercer intellectual capital
(e.g. management,
and surveys on market
 Secure board approval
assignees, reward team,
trends and practice
talent team, local expat
managers, etc)
 Assessment of
sustainable ongoing costs
 Establish issues with
current approach and
 Detailed
develop best future fit
recommendations
recommendations

Agree
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&
comm
unicat
e
chang
e
Agree the change
agenda
and iimplementation plan
 Communication to key
stakeholders
 Communication strategy
plan
Pricing guide: Typical consulting fees Euro 30K – Euro 50k
Mercer
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4. Mercer's suite of expatriate management tools to assist clients
with effective expatriate management
1
International
Comparisons /
Overview / trends
Host-based salaries
Paying expatriates
like locals
Global Insights Publications
Expatriation trend surveys
Local data services
PayMonitor
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 Total Remuneration
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Global Pay Summary
WBEG
Int. GEO Salary differentials
International Car Policies
Total Employment Costs
Managing China’s Hr
Environment
Managing India’s HR
Environment
Global Compensation
Planning report
International Assignment
Survey
Expatriate Benefits Survey
Mercer
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2
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Surveys
Local benefits surveys
Bespoke surveys
Job Pricing
International Position
Evaluation system
Home-based salaries
Adjusted salaries
Expat allowances
Expatriate reports
Global HRMonitor
 Cost-of-living reports
 Quality-of-living/hardship
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reports
Short-term assignment
allowances
Tax reports
Employee mobility
guides
Statutory Benefits reports
Employment conditions
reports
Balance sheet
calculations
Online calculators on
Global HRMonitor
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Other expat issues
Bespoke analyses
MercerPassport
ExpatMonitor
 Bespoke surveys
 Policy benchmarking
 Online cultural training
tools (MercerPassport)
 Expatriate
compensation
management tool
(ExpatMonitor)
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Mercer Limited is authorised and regulated by the Financial Services Authority
Registered in England No. 984275 Registered Office: 1 Tower Place West, Tower Place, London
EC3R 5BU