As mobility service providers, our responsibility to support the safe and comfortable movement of relocating employees doesn’t stop when they land in their destination locations. Employees are challenged to hit the ground running – as soon as possible – and much of this hinges on their ability to get around independently! For this reason, transportation is a crucial consideration for international assignees.
Providing an appropriate transportation benefit in the host country is of paramount importance for the employee and employer alike — addressing the question of transportation holistically can not only reduce the home country’s financial burden on the assignee but can also minimize company costs and drive higher assignment success rates.
The challenge? Most companies follow local country car/car allowance policies, making it challenging to generalize standard benefit practices. Moreover, transportation policies are benchmarked separately for many companies and are not included in the Global Mobility function. To dive deeper into the most common trends around this benefit type, we leaned on anecdotal experience of working with over 500 clients from various industries and the policies used to execute their mobility programs. Here are the top insights gleaned from this deep dive into our database:
Bureaucratic hurdles make it hard to apply this benefit consistently.
Worldwide, beyond language and cultural barriers and challenges of different traffic signage, regulations and unwritten rules of the road, there are bureaucratic hurdles to obtaining a driver’s license and leasing or purchasing an automobile.
In the United States, for example, obtaining a driver’s license is contingent upon having a social security number. There are often challenges and delays when applying for a license, which is needed not only to drive legally but also to lease or purchase a car. Further complicating matters, each state has its own requirements, with some states requiring foreign nationals to obtain an International Driving Permit (IDP) in addition to a valid license from their own country.
Within countries, transportation needs can also differ.
Within many countries, transportation needs will vary based on where you land geographically. In many larger cities with sophisticated mass transit options, such as New York or London, cars are unnecessary and may prove to be more inconvenient (and costly). In contrast, within suburban locations or areas with fewer mass transit options, a car is considered necessary to get around efficiently.
About half of all companies provide cars as part of the international assignment policy, irrespective of host or home country norms. Many other companies follow country-specific guidelines whereby the assignee uses a transportation allowance as they see fit, such as for public transportation or to lease or purchase a car. While practices vary from country to country, this allowance allows the company to deliver the benefit consistently and empowers the employee to choose their preferred mode of transportation based on their destination.
Leverage existing provider relationships to deliver this benefit most effectively.
Global mobility teams can (and should) leverage existing relationships through the company travel provider or procurement to lower costs and streamline the processing time for assignees leasing cars on assignment.
Many of our clients have fleets of cars available for their salesforce that are not currently available for assignees. With fleet programs, employers have complete control over employees’ vehicles. They own and manage all vehicles and manage employees’ insurance coverage and vehicle upkeep. Moreover, the overall costs of fleet cars are typically lower than individual leases, so companies save in the long run by using fleet cars.
This arrangement charges the monthly leasing fee directly to the company and the assignee’s business unit. The fleet program includes maintenance, usual and customary repairs, and insurance. The assignee pays all other expenses (tolls, fines, damages due to accidents, insurance deductible, fuel).
Think local first.
Country and region-specific norms will ultimately dictate the need for transportation support, so always consider this and local needs and customs when developing this policy benefit. A great place to start: the web! Many helpful online tools are available to help determine best practices by location — for example, World Trade Resources houses comprehensive data covering information on over 200 countries (www.worldtraderesource.com).
The ease of transportation—and the ability to get around freely and safely—is a critical component of an employee's assignment experience. Transportation is used daily, whether for commuting to work or school, errands, or leisure activities. Customary modes of transportation vary significantly from country to country and often within countries.
Companies are incumbent on consistently ensuring safe, efficient, and comfortable transportation as a vital component of any global mobility program. Since there is no one-size-fits-all transportation policy, transportation benefits should be flexible enough to meet these varied needs, and assignees should have appropriate expectations set before deployment to ensure the smoothest road ahead (pun intended)!
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