Life on assignment drives mobile employees’ ability to advance their careers. Providing an automobile or car allowance to enable assignees to drive themselves around their destination location is another story. How do you decide whether or not to offer this type of benefit and how do you define its scope?
Provisions are typically made based on country, assignment type and tier. For the star talent you want to deploy, having access to independent transportation can be the positive tipping point in the favor of accepting an international assignment. Host location norms matter above all else, putting safety and security first.
Considering the importance of this topic and the impact it can have on recruitment and retention, Weichert recently partnered with RES Forum to research best practices among transportation policies in use at multinational companies. Here are some results of that survey.
Provisions by Country
Just about half of all companies provide cars as part of the international assignment policy, irrespective of host or home country norms and less than 10% provide cars based on home country practices. Driving in another country can be quite a challenging experience, especially if the rules of the road are radically different. For some, an allowance to cover the costs of public transportation is the way to go. To ensure safety in potentially dangerous host locales, there are two approaches: an assignee can receive a home car allowance and car or be provided a car and driver. Where local norms include either a car and driver or transportation allowance, 49% of companies let their employees choose their preference.
Provisions by Assignment Type and Tier
Almost all respondents indicated that the type of coverage that is provided depends upon the length of the assignment. For short term assignments, it’s most cost effective to reimburse for car rental expenses. An annual car allowance that is paid via home country payroll is the preferred method for long term situations. Forty-four percent of all companies provide a car allowance or some form of transportation for all long term assignees, without adding the home or host country policy into the mix. Salary level is the other determinant for 30% of organizations. Corporate seniority also influences the application of the benefit where car or car allowance is standard but the offering is country specific. Only 2% of respondents said that their international assignees never receive a car or transportation allowance.
Offering an attractive transportation benefit to employees considering international assignment is just one way to distinguish your organization and there are many approaches. You want to use information provided by at least 3 sources to help you craft your policy and these include:
• Your relocation provider, experts with anecdotal data
• Cost of living data providers (such as Mercer)
• Host country human resource contacts
Generally, you’ll find a common recommendation from this triumvirate and the standard bearer is the host location norm. Think the “Goldilocks” approach: not too much, not too little, just right – with issues of safety preeminent.
To read the full research report and get the most up-to-date best practices, email email@example.com.