effective strategies in expatriate cost management brian friedman 14 july 2009

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  • Effective Strategies in Expatriate Cost Management

    Brian Friedman

    14 July 2009

  • What makes assignees expensive ? Allowances35%

    Property costs35%

    Relocation Costs15 %

    Professional services10 %

    In-house costs

  • Policy Review Who is an expat

    Selection / Governance procedures

    Traditional Policy

    Local Plus

    Expat Lite

    Flexpat policy

  • Allowances Benchmark allowances

    COLA

    Zero based allowances

    Gainshare allowances

    Flexpat

  • Property - the elephant in the room Review housing allowances Location, location, location Dont show property over budget Gainshare with assignees Hotels, serviced accommodation, rentals Bulk deals Fees v commission Incentivise DSPs Shared Accommodation Deductibles

  • Removals / Shipping Plan in advance not last minute

    Shared Loads

    Back Loads

    Volume limits

    Incentivise assignee

    Incentivise service provider

  • Banking and Currency Review banking arrangements

    Understand charges and commissions

    Consider a specialist FX dealer

    Consider caps and collars

    Hedge liabilities

    Review assignee remittance costs

  • Schooling Use of education consultants / guides

    State v Private / Day v Boarding

    Home v Host

    Bulk discounts

    Gainshare with assignee / vendor

    Deductibles

  • Tax / Social Security Compliance No 1 priority

    Risk Management

    Quarterly Review of savings

    Gainshare

    Review Tax Equalisation policy

    In-house v- Outsource

  • Travel Policy Class of travel / Choice of airline

    Frequency

    Family members

    Destination

    Gainshare

    Flexpat

  • Immigration Compliance / Risk Management In-house v outsource

    Get your service provider to train you

    Choice of service provider

  • Pension / Insurances International Pensions

    Healthcare / Medical

    General Insurance

    Emergency home leave

  • Vendor Partnerships Partnerships create the win-win

    Service Level Agreements / Gainshare

    Keeping the relationship fresh

    Over-runs and out of scopes

    Centralised v Local billing

    When to RFP / RFI and Transition management

  • In-house v Outsourcing What to outsource (and when and where)

    Use of contractors and home workers

    Never outsource responsibility

    Use experts to train in-house staff

    Loan staff

  • Non essential services Is anything non-essential

    Review what is absolutely necessary

    Nice to haves v must haves

    Is the pain worth the gain ?

  • Technology Use technology to reduce cost

    Use technology to enhance service

    Use technology to manage process

    Use technology to connect assignees

  • Volunteers Trailing Spouses

    Buddy Programmes

    Intercultural training

  • Ten easy ways to save money

  • Focus on the ROI of the assignmentEstablish a definition of success

  • Dont tell the assignee he is the only candidate !!!!!

  • Have a policy. And stick to it

  • Focus on the family not just the assignee

  • Dont separate costs into multiple budgets

  • Avoid Allowance Overload

    Try a Flexpat approach

  • Always have deductibles

  • Localise, localise, localise

  • Talk to your service providers

  • Gainshare with the assignees

  • The best companies make assignments a pre-condition for reaching board levelRead the Mckinsey study

  • Expatriate and Vendor Cost Management

    14 July 2009