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Making the most of your benchmarking reports

ECA’s MyExpatriate Market Pay Reports provide in-depth benchmarking information covering all aspects of a long-term international assignment package. The reports, which are free and exclusive to participants, can be used in a wide variety of ways to ensure your competitiveness in the market. By providing reliable, detailed country-specific benchmarking data they provide all the information you need to assist your internal decisions.
With the launch of the 2019 survey, here are some examples of how the reports help mobility teams around the world with the issues they face every day.

Is local-plus the best choice?

Although the traditional home-based salary approach remains the most popular method of calculating salaries for long-term international assignments, mobility teams around the world are increasingly interested in host-based approaches, such as local-plus.

A significant advantage of this approach is that it is simple to administer, and it provides greater equity among employees working in the same country.

Perhaps the main reason for the ever-growing interest in local-plus is the perception that as well as being easy to administer, it can also save money, which can seem very appealing to anyone under pressure to cut costs. It is not always so simple, however.

How to find the information needed

Host-based salary approaches such as local-plus are often considered to be potentially cost saving due to the expectation that local salaries are lower than their expat equivalents. Local salary graphs, available for selected countries, provide an at-a-glance guide as to whether this is actually the case.

Take, for example, a participant company with expatriate staff in Japan and Malaysia. The local salary graphs, which plot the average local salary alongside the expatriate results from the survey, would be used for a clear visual comparison and can act as a useful guide as to the relative levels of expatriate and local salaries.

The net salary amounts, on the vertical axis, are plotted by seniority, on the horizontal axis. The seniority, measured in ECA points, ECA’s job evaluation system, ensure that accurate comparisons are made according to job sector, nationality and other variables. Higher values in ECA’s points system reflect a greater relative worth of an employee to their respective company.

The average, upper and lower quartile expatriate salary levels are displayed as solid lines on the graph, with the red dashed line representing the average local salary level. The amounts used for the local salaries are from before the deduction of employee housing contributions, whereas the expat salaries already have these deducted. As we will see, accommodation is commonly provided in local-plus packages, which allows the two levels to be directly comparable.

local salary graphs

Local and expatriate salary comparison graphs for Japan and Malaysia

In this example, the results for each country are quite different, and show that implementation of a host-based system is not always easy. The graph for Japan is more straightforward, with the local average broadly around the expat lower quartile, albeit a little lower, while the graph for Malaysia shows that local salaries are far below their expat equivalents.

For these locations, the graphs suggest that changing salary approach would likely lower salary costs, more dramatically so in the case of Malaysia. However, convincing employees already on a home-based assignment package to accept such lower terms may be a difficult task.

With the local-plus approach, the ‘plus’ element covers the additional allowances and benefits provided to expatriate employees that local nationals do not receive. This can be to compensate for a low local salary level compared with the home, or to make up for any additional costs borne by expatriate employees compared to locals – for example ongoing home country housing commitments or language differences requiring international schooling for accompanying children.

The benefits sections of the reports contain detailed information on best practice in every published location. As well as overall market practice, it is possible to see the actual provision of benefits for those on a local salary in each country using the Total Package Listings download, which contains the full details of every job submitted to the survey and can be filtered according to your needs.

How does this help?

The data available can be used to ensure you find the balance between saving money and offering a package that is going to be acceptable to your assignees.

To continue with the example of Japan and Malaysia, the benefits sections of the reports for those countries show that almost 90% of participants cover the full cost of host country accommodation for their assignees. These figures are for the market overall, but you can also use the Total Package Listings to see the actual provision of assignment benefits for employees on local packages. 

A look at the host-based packages in the listings for these countries shows that very few job holders are left entirely responsible for their own accommodation, so this would suggest that the ‘plus’ element should include host country housing. The reports and listings can also be used to examine the provision of the other common assignment benefits to inform your decisions.

The challenge of a low host salary level, such as in Malaysia, could be overcome by providing an additional allowance for posts in that country, either on a permanent or transitional basis. Although salaries at that sort of level would result in significant savings, on their own they would also likely risk employees rejecting such moves.

Local-plus packages may not be appropriate for everyone. As demonstrated in this example, there can be wide variations in how suitable the approach might be according to host location, the seniority of the assignee, as well as nationality. However, the reports provide you with the data you need to justify whichever approach suits the goals of your organisation.

Handling assignee pushback – considering the whole package

One of the biggest challenges facing a mobility team can be dealing with assignee pushback regarding salaries. In these cases, robust and detailed data is vital to be able to investigate the issue and know exactly where your company stands compared to the market in your host locations.

Although the primary focus of complaints may be centred on the assignee’s salary, or even one element of the salary such as the cost of living adjustment or location allowance, it is vital to understand the whole picture and consider every element of the package.

How to find the information needed

One of the most popular features of the reports is the MySalary graph. All jobs submitted to the survey are included on the graph, with your own company’s jobs highlighted, meaning you can see at-a-glance exactly where your assignees salaries compare to the market.

As well as looking at the overall market, many companies make use of industry group comparisons. This could be for talent retention purposes, for example, as employees are more likely to move to another organisation within the same field. The MySalary graphs are dynamic, allowing you to compare against the industry groups of your choice at the click of a button.

Looking at another example, this time a financial services company receiving complaints from their assignees, the MySalary graph below shows that their employees’ salaries are slightly above the upper quartile, suggesting there is no justification for the grievances. However, by narrowing the focus to just fellow financial services job holders, the picture changes, and it indeed appears that their salaries are low compared to some of their industry peers – as can be seen in the graph below.

MyEMP chart

Example MySalary graph for the USA, filtered to show jobs in the Financial services sector. Your own company’s jobs are highlighted as red diamonds and other expatriates in the country as crosses.

Despite cash salary perhaps being the most visible part of the package as far as the employee is concerned, any benefits that are provided can have significant financial value. The benefits sections of the reports provide comprehensive data on market practice regarding the provision of the main assignment benefits, and can be consulted to check how your company compares to the overall market.

As we looked at in the above example, it is also possible to examine the full details of every job submitted to the survey by using the Total Package Listings, which can be used to establish the true position of your assignees’ total packages by comparing every element against your competitors’.

How does this help?

The salary data in the reports shows you exactly how your salaries compare to the market.
Although it is often the case that assignees focus on one particular area of their package that they feel is insufficient, in actual fact the other elements provided to them can make them better off than they initially realise.

 
Your assignee
Assignee Peer 1
Assignee Peer 2
Assignee Peer 3
Family size
M+2
M+1
M+2
M+2
ECA points
85
85
85
85
Net take home pay
105589
125907
160660
165664
Accommodation allowance
81600
58800
65400
54960
Utilities
 
 
 
 
Transport
 
 
 
 
Education
 
 
 
 
Bonus
45000
25000
12500
0

To demonstrate this, the extract from the listings above shows the jobs from the earlier example that are highlighted in the MySalary graph. As has already been established from looking at the graph, this company’s own job holder has the lowest net salary of the four. 

However, this employee receives a much more comprehensive benefits package than any of their peers, with the others having to meet costs for utilities, transport and education from their net salaries, effectively bringing the packages closer together. In addition, this company’s employee receives a significant bonus, so this company does indeed appear to have a competitive package overall.

Although this example demonstrates the competitiveness of this particular package, there will of course be cases when assignee pushback is justified. The data available in the reports allows you to look beyond basic salaries and consider all the variables that go into the assignment package, giving you an independent source to reference when communicating with internal stakeholders and resolving situations such as this.

Benchmarking accommodation allowances

Whilst ECA researches and publishes accommodation costs around the globe, many companies also want to benchmark the actual amounts provided by companies to their overseas workers. 

As already mentioned, any benefits provided can add significantly to the overall cost of the assignment, and accommodation is usually the most expensive of these, so benchmarking actual allowances can help companies to ensure they get it right. With a range of rental prices for every location, across different types of accommodation and property sizes, it is useful to see how your chosen approach compares to that of other organisations.

For assignees, the accommodation they are provided with not only holds financial significance, but also emotional significance. It is their home for the duration of the assignment, and it will also impact the entire relocating family. According to ECA’s Managing Mobility Survey, almost 20% of companies said that accommodation issues were a factor behind assignees failing to adapt to life in the host location and this can, at worst, result in assignment failure.

How to find the information needed

The Total Package Listings section of the MyExpatriate Market Pay Reports, introduced in the previous example, contains details of every aspect of all the jobs submitted to the survey. This includes the type of accommodation provision for each job holder, as well as the actual accommodation amounts, whether in the form of an allowance or benefit-in-kind.

Typically, accommodation allowances vary by family size, with the majority of companies also taking seniority into account. Naturally, there can also be wide variances in the cost of (and therefore the allowances for) suitable housing between cities in the same country.

The downloadable version of the listings is provided in Excel format, enabling you to filter and sort by the exact criteria you require. This flexibility means you only have to consider factors relevant to your own situation for an accurate benchmark.

It is possible to display the information in a basic chart to make it easier to visually compare allowances, this can be done yourself or as part of a consultancy project on accommodation costs should more detail be required.

Accommodation graph

Accommodation analysis graph for employees in Singapore who are accompanied by a partner but have no children

In the example above, the chart looks at accommodation allowances in Singapore for employees who are accompanied by a partner/spouse but do not have children. Each dot on the chart is an assignee accommodation allowance in the city, plotted by seniority, with job holders from the company doing the comparison highlighted in red. The company in question provides the same category of accommodation for all assignees, resulting in the very flat pattern shown on the graph. Immediately it is clear that due to this policy, their allowances are very competitive at the low end but become decreasingly so as seniority increases.

How does this help?

Analysing actual accommodation allowances provided to overseas staff in your host locations can give you some valuable insights.

Two of the main reasons for benchmarking accommodation allowance amounts are to ensure assignee satisfaction and to maintain competitiveness. Another common reason given by companies using the data in this way is to check the cost-effectiveness of assignments, and to gauge whether any policy adjustments are necessary as a result.

Accommodation policy varies widely from company to company, but the data provided in the MyExpatriate Market Pay Reports can inform your decisions.

Conclusion

Mobility teams face many challenges on a day-to-day basis and never know what the next issue may be or when it may arise. Taking part in ECA’s MyExpatriate Market Pay Survey and having the free reports on hand offers peace of mind along with the comprehensive and robust data, essential when facing these challenges, whatever they are. The examples above demonstrate how the data can be used for everything from reviewing and testing policies, and making cases to internal stakeholders, to investigating assignee pushback and assessing whether compensation is sufficient.

With flexible data that can be adapted for your organisation’s needs, and global coverage using a consistent methodology allowing for easy and transparent comparisons across all your assignment locations, the MyExpatriate Market Pay Survey’s free benchmarking data is an invaluable tool.

  FIND OUT MORE

The MyExpatriate Market Pay Survey is now open, and if you take part before 30 August you will receive free reports for every country you submit data for. More information, including a sample MyExpatriate Market Pay Report, is available in the Surveys section of the ECA website.

The webinar Know your market position – benchmarking assignee pay and benefits provides further practical advice on using ECA's MyExpatriate Market Pay Survey to benchmark your assignees' pay and benefits.

For those considering using local salaries, the National Salary Comparison and Net-to-Net Calculator can also help. The accommodation report and tool can assist with benchmarking accommodation costs.
 

  Please contact us to speak to a member of our team directly.

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