Are we paying expats too much to work overseas?

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New Zealand has around a million skilled workers based overseas – one of the highest proportions in the OECD – but only around 10% surveyed said that they would be comfortable raising a family back home on New Zealand wages.

With more and more companies sending Kiwi employees to overseas postings, PwC has issued a report claiming that we could be doing it all wrong.

Claire Hughes, director of PwC’s global mobility team, has said that many employers are overpaying their expats for overseas postings.

According to 2013 survey Every Kiwi Counts, conducted by Kea, more than half of Kiwi expats are earning in excess of $100,000 per year overseas.

“Many employers risk wasting considerable money sending the wrong people to the wrong places, overpaying for expats when local talent is available in-country or offering large financial packages when people are more motivated by the development opportunity,” Hughes said.

“Many businesses are also losing valuable talent at the end of their assignment, as they have no plan for their returning role.”

HRM spoke to Richard Westney, HR director Australasia at FNZ, who agreed with PwC’s suggestions that companies are potentially wasting huge sums of money on remuneration packages.

“I think it’s accurate that many employees would be equally grateful for the development opportunity and the monetary value of working overseas,” Westney said.

“People used to move overseas on huge packages and when they returned their employers couldn’t get them off them. Now, people initially just expect to have their basic expenses covered and a salary that is consistent with the local market. Overseas opportunities are no longer only open to the elite.”

PwC has reported that one in five employers plan to introduce ‘talent swaps’ between two countries within the next two years. Westney agrees that ‘talent swaps’ are becoming more prevalent.

“I think that talent swaps are a great idea – we do that here with workers in the Czech Republic,” he added.

“This is a cost neutral development method, and I think that it will become more popular in the future.”

Westney outlined three things in particular that HR can do to ensure that global mobility programs provide optimum benefits for their organisation:

Make sure that you have good external advisors for things such as relocation, tax advice and immigration. This is a long process, and there are no shortcuts.

Have a dedicated person within the mobility team who has experience with the issues which are likely to need addressing. This is specialist work, and HR is often expected to pick it up. “I think that this is where we’re falling down,” Westney said.

Have a good policy and process in place. It is important to remember that no two people are the same, so individuals need to be worked with case-by-case.

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