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Labour and workforce issues often lead to companies relocating staff to different locations. But how can HR ensure that expectations of expatriates are in line with company provisions? Akankasha Dewan speaks with Joanne S.Y. Chan, compensation and benefits director for East Asia Pacific at Alstom Asia, to find out.
Over time, employers worldwide have realised the vital role relocation plays in growing businesses. Relocation not only allows companies to take advantage of high growth markets, but also enables them to acquire a diverse range of talent from other countries.
However, managing international assignments for assignees has become more complex and comprehensive, especially because it requires HR managers to adhere to different demands and needs of international assignees.
Such was the problem Joanne S.Y. Chan, compensation and benefits director for East Asia Pacific at Alstom Asia, faced when the company required international talent to fulfil its growing targets.
“Alstom has been in the country for twenty years and we were responsible for both the North-South and East-West MRT lines. Eight years ago, we started construction of the Circle Line MRT, when the company was growing rapidly,” she says.
“At the time, the nation did not have adequate rail expertise so we had no choice, but to get talent from somewhere else. We were buying and borrowing, more than building, when it came to skills. We didn’t have the time to build the expertise we needed, owing to the rapid growth.”
We were buying and borrowing, more than building, when it came to skills. We didn’t have the time to build the expertise we needed, owing to the rapid growth.”
With a lot of expatriates coming in, Chan recounts different types of packages were being used for different employees, depending on the negotiation process and the demand for their expertise.
“As a result, we soon had many different pay and practices in place, and there was a need to take corrective action towards internal equity.”
Streamlining the process
In its attempt to come up with a more methodical approach towards crafting expatriate packages, Chan’s team put in place a local-plus policy in 2009. It was aimed towards standardising the terms and conditions of expats’ employment contracts. It served both as a way to control costs and maintain the company’s internal equity.
“The basic principle was they could come to Singapore without getting the full-fledged expats’ bells and whistles. Most MNCs, including us, offer these bells and whistles as part of the global mobility policy to the senior-most layer,” Chan says.
“But here we had a way to provide mobility to our middle and lower level staff, without a full package, but by helping them through co-sharing of costs for a certain period of time.
“We offered to co-share the housing and schooling costs with them for a period of four years after they moved, on a decreasing schedule. Over four years, the benefits would go away.”
A key strength of the package was the pay scales for employees relocating to Singapore were similar to their home countries.
“We are lucky that pay levels in Singapore are comparable to the developed world, and it also has a lower tax regime. So despite the currency exchange, net-to-net basis, we hardly had any issues matching pay.”
Here we had a way to provide mobility to our middle and lower level staff, without a full package, but by helping them through co-sharing of costs for a certain period of time.
Chan says the policy is still in place.
“In fact, we refreshed it last year. After implementing it for four years, we had some feedback on loopholes or where things are not clear. So we tightened them, reviewed some amounts to make sure they are still reasonable, but the basic principles remain the same.”
The loopholes were mainly administrative in nature, such as the usage of different terminology in different contracts. To ensure clarity for all employees, Chan’s team is now putting in place a standard template for all staff.
Clear communication about the details of the policy is also something the company actively practises.
“This policy is communicated on a case-to-case basis for those who fit the profile of what we are looking for.”
Chan admits when her team first implemented this policy, there was a fear employees would resign once their benefits expired after four years. But thankfully, this proved not to be the case.
In fact, the programme has helped in boosting the company’s retention rates.
“Where our employee population was earlier only focused on the trains business, we have got more people who are coming in for other types of businesses and career movement,” she says.
“It has also helped us control costs, while putting a signal out that we encourage career mobility and we want to help our employees to do that. In that sense it has been successful. It was then used as a model for other countries to build their own local-plus policies, such as in Malaysia, China and Switzerland.”