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Controlling the costs of international mobility
Due to development of international business, creation of subsidiaries, transfer of know-how, project management, the international mobility is growing in many forms : international responsibilities, travels abroad, short-term missions, expatriation, impatriation, commuting ...
International mobility having become commonplace has led companies to change their practices.
Now their main objective concerns the cost control.
Given the practices, changes are delicate but necessary to implement. We propose below a few tracks that should be considered :
Choice of status
The appropriate status takes into account various criteria : duration of the mission, level of responsibility, geographic area, individual expectations ... and cost control. The choice must be made on a case by case basis.
- Secondment is adapted to short-term missions (a few months, even up to 24 months under certain conditions). The employee still depends on the insurance coverage of his country of origin. This protective status is certainly the most expensive,
- Expatriation is suitable for long duration missions. The employee depends on the insurance coverage of the host country. This status is beneficial, but if the country of assignment does not offer adequate coverage, it may be necessary to provide a complementary insurance, despite of the cost of a double contribution. This policy is adapted in particular to key people, whose level of responsibility justifies the amount of costs incurred,
- Commuting is a kind of mobility which has grown significantly in recent years (the individual works during the week in another country and comes back on the week-end to his home country). It answers the expectations of the employee whose family wishes to remain in his country of origin. The cost for the company is favorable (no extra cost linked to the status, no compensation for loss of spouse employment, no relocation expenses), notwithstanding the cost of dual residence and traveling which can be substantial,
- Local status is increasingly favored by companies : inexpensive, because local practices are applied to the employees (sometimes with some specific measures), and simple to implement,
- Short-term mission is the international mobility practice the most widely used. One reason is that is does not create any additional cost, except travel expenses.
International mobility policy
A mobility policy provides a coherent and motivating rule for international transfers, taking into account the management practices of the company.
In perspective of cost control, trends are twofold :
- First, in Europe, we see the disappearance of the expatriation premiums, and, increasingly, the adjustment of remunerations to the local market,
- Secondly, the development of different levels of packages, with benefits and costs adapted to the various categories of people : executives, managers, others.
Tax optimization
The tax optimization tracks exist, even if they are not always used, regardless the size of the company. They deserve to be analyzed upfront, together with the choice of the status.
Examples :
- Regulations in some countries (e.g. in France or in Belgium) concerning people making short term or long-term trips abroad for their business,
- The split payroll concerning individuals paid in one of the country of assignment and in their country of origin.
Social optimization
The level of social coverage in the employment country is often deciding : if it complies with company policy, it is necessary to avoid additional coverage in the country of origin.
Another source of concern and optimization for the company and the employee is validation of periods for international careers. It allows extending the period of insurance used to calculate the pension rate eligibility for full pension, increasing the amount of benefits, and, possibly, anticipating the date of retirement.
Professionalization of services
Services (moving, training, relocation, assistance before / after departure ...) are one of the key cost issues. It is therefore necessary to manage services in a professional manner, in selecting the best suppliers in quality / cost.
Sources of optimization are multiple.
We can help you :
- to build or redefine your international mobility policy,
- to conduct an audit of your costs,
- to determine the individual remuneration packages,
- to fiscally and socially optimize your packages,
- to take over the administration of your expatriates.