International firms hit out at overgenerous expat packages

Published:  7 Nov at 6 PM
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As the costs of providing generous packages for expats working abroad soar, many international companies are concerned that the benefit culture is spiralling out of control.

Multinationals across the world, forced to cut their costs due to sluggish economic conditions, are increasingly concerned that their branch office overseas are wooing expat workers with unaffordable benefits packages. They say that decisions are being taken without reference to head office protocol or corporate guidelines.

Even given that the cost of hiring and retaining top talent happy to relocate to unfamiliar countries is always high, multinationals are pulling in their horns and blocking local offices from offering high-value deals to secure the best and brightest against the competition. A survey has shown that companies are now taking back control from their local offices for the sake of saving money in hard times.

According to leading global benefits strategist Amol Mhatre, multinationals need sustainable benefits package designs backed up by a formalised governance structure. This way, he adds, the management of operational and financial costs is easily handled.

At the present time, expats are already seeing cuts to their housing and family health benefits as there are many more people looking to work overseas due to conditions in their home countries. Vic Webb, a British expat employed in Singapore, states that the days of local managers making decisions about remunerations for the workforce are over, with head offices now overseeing local budgets and enforcing cost-cutting.

However, he adds, new arrivals in Singapore are so pleased to have found a job in Asia that they are unconcerned about lower benefits. The survey also noted that 88 per cent of employers accept that staff benefits will need to be slashed due to high levels of cost.
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