Human Resources: Savings Initiatives in Expatriate Programs Continue

New York (July 28, 2009) — In a follow-up survey to ORC Worldwide’s 2008 study, Flash Survey: Cost Savings Initiatives, employers reported ongoing plans to reduce costs in the international arena. “In the continuing uncertain economic situation, human resources managers struggle to deploy the right talent for the right assignment at the right cost – without adversely affecting the success of the assignment goals by cutting back on essential programs,” according to Geoffrey Latta, executive vice president for ORC Worldwide’s international compensation practice area.

“Many employers are in the process of reevaluating their expatriate programs with an eye toward taking strategic action.” Respondents reported the following top areas of policy change: compensation and incentives (cited by 34.3 percent), localization (32.4 percent), housing (28.4 percent), cost-of-living allowances (26.5 percent), and home leave (22.5 percent). To meet their budgetary goals, HR managers are taking steps such as reducing nonessential international travel, reviewing the need for each assignment before authorization and deployment, tightening control of policy exceptions, projecting costs, and others. “However,” Latta adds, “the changes appear to acknowledge the need to keep expatriates and family members satisfied with the overall package.

This trend is evident in the high percentages of respondents who, for example, are not restricting pre-assignment visits (and orientation programs) to expatriates only or eliminating incentive premiums.” Who has been hit the hardest by the recession? Not surprisingly, manufacturing has taken the heaviest blow. An analysis of participants revealed that the heavy machinery and vehicle manufacturing industry reported the highest percentage of companies decreasing their expatriate population. At the other extreme, the least affected industry proved to be life sciences.

When asked about average expatriate staff reduction, the banking, finance, and insurance industry led the way. “This year continues to be difficult for all business enterprises, particularly those with global operations, whose mobility programs are essential to the company’s long-term strategic objectives,” says Latta. “HR managers, as always in times of economic downturns, balance the need to implement cost-efficient programs without jeopardizing their ability to mobilize – and motivate – skilled resources wherever needed.”

ORC Worldwide, a human resources consulting firm, delivers HR management expertise and information to organizations around the globe. Headquartered in New York City, ORC Worldwide has offices in Chicago, Dallas, Dubai, London, Los Angeles, Melbourne, Munich, Paris, San Francisco, Sacramento, Singapore, Tokyo, Washington, and Wellington. For more information about the survey, please visit orcworldwide.com <http://www.orcworldwide.com/> or contact samantha.blackhurst[at]orcww.com.

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