Employers Cut Costs for Ex-Pat Programs

September 16, 2009 (PLANSPONSOR.com) - International employers continue sending workers for overseas assignments, but in a less expensive way, according to a new study.

A KPMG LLP news release about its latest study about overseas assignments found that among the cost-saving measures taken were short-term assignments (STAs) (79%) and permanent transfers (45%), in place of long-term or standard assignments.

Employers are also changing various policy provisions to save costs. For example, to help determine the cost of living adjustment (COLA) calculation on their assignee packages, 31% of the organizations surveyed are using an “efficient purchaser index” — a sliding scale measurement of the ratio of the cost-of-living between the home and host locations, which assumes that an experienced assignee is a “smart shopper” and is able to purchase goods and services more economically than the average (newly arrived) assignee, the news release said.

Almost half (49%) of respondents indicate assignees take too much time to administer. Forty-seven percent of respondents outsource parts of their international assignment programs.

“As the decline in the global economy affected almost every area of business and most companies assessed the cost-effectiveness of their operations, international assignments were no exception,” said Achim Mossmann, managing director of Global Mobility Advisory Services in KPMG LLP’s International Executive Services (IES) practice, in the news release.

The study covered 470 HR executives. For a copy of the study report, contact Ichiro Kawasaki of KPMG LLP at ikawasaki@kpmg.com .