CapRelo Blog

Controlling Global Assignment Costs

Posted by Amy Mergler on Thu, Dec 06, 2018

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Finding a balance between employee support and cost management when overseeing global assignments is a challenge, but it can be done. Most importantly, it's imperative to properly plan for assignments and actively manage expenses.

No two global assignments are identical, so rather than creating a one-size-fits-all solution, you may opt to evaluate some custom-fit solutions that take the bigger picture into consideration to create opportunities to save. In addition, you may consider these measures to help manage and reduce global assignment costs.

Assignment Cost Control Measures

  • Establish goals and select the appropriate candidate for the assignment. To avoid the cost of a failed assignment, one of the most important steps is to properly plan your business goals and objectives to screen candidates and identify the best talent for the assignment. Candidates can be assessed not only on their job skills, but also on their ability to manage and adapt to a different culture and environment.
  • Review your assignment program regularly. There may be areas in your program where minor adjustments can be made to reduce costs without negatively impacting employees. For each possible adjustment, analyze how it will impact the relocation process and how it will affect your employee's productivity during the assignment.
  • Regulate cost-of-living allowances. There may be a significant difference between the costs of living in originating and host countries. Set allowances that are applicable to their respective locations, and recalculate cost-of-living subsidies regularly to reflect financial fluctuations in the host country's economy. Use a salary cap when calculating the COLA to further contain costs.
  • Reevaluate host country housing guidelines. To control housing expenses, employ more conservative standards to determine guidelines for host housing using the most current data available. Remember to review and adjust the guidelines regularly to account for local real estate value and currency fluctuations.
  • Lower house-hunting trip reimbursements. International airfare, transportation at the location, as well as lodging and food can be expensive. Reduce these costs by limiting the number of days allocated for these trips. Unless necessary for school enrollment, limit trips to the employee and spouse/partner only.
  • Reassess the costs of language training, cultural training services, home-finding and familiarization trips. Though these services are often crucial to an employee's successful assignment, you may be able to do some research and compare providers to determine if there are more cost-effective ways to provide them, such as providing web-based language training. Pay attention to service quality and client satisfaction to ensure you make both cost-effective and responsible decisions.

Managing Global Assignment Costs

Topics: global assignment costs, managing costs, global assignments, global mobility, global relocation

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