MERCER 2012 WORLDWIDE INTERNATIONAL ASSIGNMENT POLICIES & PRACTICES SURVEY KEY RESULTS: CANADIAN MULTINATIONALS FEBRUARY Roger Herod Mercer Chicago MERCER 1 February 19, 2016 Introduction Industrys largest and most comprehensive survey database on global mobility policies and practices Conducted from March 29 to July 13, 2012, gathering responses from 752 companies worldwide Covers trends in mobility program management, as well as a wide range of policies and practices for typical long-term assignments Survey database is evergreen: MERCER 2 February 19, 2016 Todays Agenda Key Trends Compensation Strategies Costly Decisions: Incentives COLA Housing Home Leave Key Policy Differences between Industries Assignment Metrics Conclusions KEY TRENDS MERCER 4 February 19, 2016 Demographics (Canadian Multinationals) Trends and expected increases in assignments 20102011 Trends 57% typical long-term assignments 50% short-term assignments 42% locally hired foreigners 38% commuters 29% rotators 20122013 Projections 74% short-term assignments 62% typical long-term assignments 56% developmental assignments 45% locally hired foreigners 35% permanent transfers MERCER 5 February 19, 2016 International assignment policy (Canadian Multinationals) Currently Reviewing or Planning to Review 66% Expatriate allowances (COLA, incentives) 60% Global international assignment policy 59% Short-term assignment policy 58% Expatriate benefits (housing, home leave, cars) 51% Localization policy 50% Expatriate tax policy COMPENSATION STRATEGIES MERCER 7 February 19, 2016 Remuneration approach (Canadian Multinationals) Which approach do you typically use for long-term assignments? Other than home-based balance sheet HQ-based balance-sheet approach 4% Home plus approach 9% Host-based approach 2% Host plus approach 4% International compensation structure 6% Other 15% MERCER 8 February 19, 2016 Remuneration approach (Canadian Multinationals) How do you typically deliver assignee remuneration? Split Pay MERCER 9 February 19, 2016 Localization (Canadian Multinationals) Are employers using local & local plus assignment packages? COSTLY DECISIONS that impact the BOTTOM LINE COSTLY DECISIONS INCENTIVES MERCER 12 February 19, 2016 Incentive premium Do you pay an incentive premium to LTAs? COSTLY DECISIONS COLA MERCER 14 February 19, 2016 Cost-of-Living (G&S) Allowance (Canadian Multinationals) Do you modify the index to exclude certain items / categories from the market basket? MERCER 15 February 19, 2016 Cost-of-Living (G&S) Allowance (Canadian Multinationals) Which items / categories do you modify or remove from the index? MERCER 16 February 19, 2016 Cost-of-Living (G&S) Allowance (Canadian Multinationals) Do you cap the amount paid for goods and services differentials/COLA? The median threshold salary was CAD 186,000 for Canadian companies COSTLY DECISIONS HOUSING MERCER 18 February 19, 2016 Housing assistance for Long Term Assignments: Homeowners and Renters For homeowners Do you provide home sale assistance? For renters Do you help employees cancel their leases before an assignment? MERCER 19 February 19, 2016 Expatriate Housing Policy for Long Term Assignments COSTLY DECISIONS HOME LEAVE MERCER 21 February 19, 2016 Home Leave Airfare Class, Home Leave KEY POLICY DIFFERENCES BETWEEN INDUSTRIES MERCER 23 February 19, 2016 Key Policy Differences Energy & Mining versus Other Industries Remuneration Approach Incentive Premiums Home Sale Home Leave Reimbursement MERCER 24 February 19, 2016 General Industries: N=31 Energy / Mining: N=16 Compensation & Tax Strategies Which of the following remuneration approaches do you typically use for long-term assignments? MERCER 25 February 19, 2016 General Industries: N=21 Energy / Mining: N=11 Incentives Do you pay an incentive premium to your typical long-term assignees? MERCER 26 February 19, 2016 General Industries: N=32 Energy / Mining: N=14 Housing Do you assist employees with the sale of their home before an assignment (e.g., reimbursement of selling costs, purchase of employees home)? MERCER 27 February 19, 2016 General Industries: N=45 Energy / Mining: N=14 Home Leave How do you deliver home leave benefit? ASSIGNMENT METRICS MERCER 29 February 19, 2016 Assignment Metrics Using metrics to track success/results N=48 Yes2.1% No97.9% MERCER 30 February 19, 2016 Assignment Metrics Using satisfaction surveys- Canadian companies MERCER 31 February 19, 2016 Assignment Metrics Using metrics to track success/results Are employees with international experience promoted more quickly? Is turnover for repatriated employees in the 2 years following return greater than for comparable employees who have not been on assignment? N=48 Yes, and its is reported in internal statistics4.2% Yes, but we do no have any internal statistics on that matter 2.92% No, our internal statistics show otherwise2.1% No, but we do not have any internal statistics on that matter 22.2% Dont know35.4% N=48 Yes0% No31.3% We do not keep statistics on that matter68.8% CONCLUSIONS MERCER 33 February 19, 2016 Some key findings from WIAPP Use as you plan for 2013 Review home housing support policies About 33% of Canadian companies no longer withhold a home housing norm; choose approach and align these policies with home sale assistance and property management policies Peer check incentive premiums About 40% of Canadian companies do not provide an assignment incentive, but this varies widely by industry so take a closer look and know where you need to be Look at short-term assignments One of the strongest upward trends, look at incentives, per diems, hardship allowances, and trips home for savings opportunities Evaluate home leave policies Take a close look at what you are actually spending as these policies can be costly, especially if you are providing business class or full fare economy tickets Use metrics to track expatriates Are there ways that you track what happens to expatriates once they repatriate? How many are promoted? How many are still with the company 2 or 3 years later? MERCER 34 February 19, 2016 Contact Information Roger Herod Principal Mercer Chicago