There is an increasing trend towards localization for expat employees; learn what other companies are doing and how you can consider a shift too.
In recent years the format of an expatriate's offer has shifted somewhat. Where previously employees may have been offered lavish expat compensation packages with home-country benefits, pensions and cost of living adjustments, more and more we are seeing companies move towards a host-based approach where expats are treated as locals from day one.
The shift towards localization has a number of drivers; for some companies it is to curb the ongoing assignment costs for their expats, particularly those on long term assignments. For others it is a desire to ensure fair and equitable offers for all employees within any one office. In many cases the assignee's desire to return home has changed, and it makes sense to convert their contract to local terms.
Putting aside the complex calculations involved in a home-based expat package, with ongoing tax adjustments, cost of living bonuses, home-country pension schemes and home leave flight allowances, with the rise of the self-initiated expat, many companies see no need to offer such benefits. Many of the teams we speak to highlight the desire from their employees for international experience. With this in mind, the compensation package is rarely the deciding factor for accepting an assignment, with most ranking experience and career growth ahead of the specific salary details.
Importantly, a host-based approach allows companies to simplify their payroll management, expense tracking and benefits allocations, by putting everyone on par. As with any approach, there will naturally always be exceptions, but for the most part being localized is now considered the norm, and for many employees the intangible benefits of the assignment far outweigh the lack of home-country expat perks.
Get in touch today to learn more about localization and how to ensure your employees still have a great experience going on assignment!