A recent survey of corporations employing a total of 2.2 million expatriates found technology companies are also converting expatriates who regularly move into "local plus" employees: They're given the same salaries as locals, plus a small housing allowance and possibly benefits such as education allowances for school-age children, annual trips home and career assistance for their spouses. That compares to full relocation packages that would often include deluxe housing, assistance preparing tax forms and paying local and U.S. taxes, settling-in services for the family, and a salary equal to what the employee would earn at home. More Competition
One factor driving the local plus trend is increasing competition among candidates based in countries with a lower cost of living. "What we've seen is a large shift over the last few years to mobility coming out of India," says Scott Sullivan, executive vice president of Brookfield Global Relocation Services, the Woodridge, Ill., firm that conducted the survey "Large multinationals in the hardware, software and services areas are doing a lot of third-country international relocations," Sullivan observes. "Indian technology specialists are being relocated to Western Europe and America because they're highly skilled, well-educated, lower-cost employees." Geoff Latta, executive vice president of ORC Worldwide, a New York City relocation consulting firm, estimates that 60 percent of international IT firms have cut back on the number of employees sent on overseas assignments. In part, they're able to draw on workers willing to accept local plus contracts, but the recession and postponement of capital expenditures for technology have also played a role. Cutbacks have been "in the number of assignments rather than ... the relocation package because in IT, the packages have not been overly generous," he says. Overall, Latta believes technology firms have reduced the value of international relocation packages by about 20 percent. The exceptions include employees with in-demand skills. "If you work on a very specific module of SAP, you'll receive a nice package to move around," says Alain Verstandig, president of NET EXPAT, an Atlanta relocation consulting firm. Indeed, companies differentiate between employees whose moves involve revenue generation and those whose moves don't. Relocations involving revenue-generating positions, such as technical experts who provide knowledge to particular projects, may have actually increased in some cases. Among non-revenue generating roles, only executives, such as chief financial officers, are still being relocated, the survey found. Layered Benefits Companies are also cutting costs by fine tuning mobility policies, adds Mary Ellen Myhr, a senior manager at Associates for International Research, a Cambridge, Mass. international human resources advisor. "Experienced people with lots of technical knowledge are on home-country-based packages," she says, "but more junior people, or individuals for whom the job is a great career opportunity, are either on a reduced package with lower housing allowances, less incentives and a more conservative cost-of-living allowance, or they might be placed on a local plus program where the starting point is the local salary." Shift in Focus The purpose of international assignments is also shifting. Three to five years ago, companies were making international transfers to areas where they couldn't find needed skills among the local labor pool. While that motivation remains today - for example, managerial talent is tough to find in China - there's more movement motivated by other factors. "Over the past two years, we've seen the use of assignments to build management expertise," Sullivan says. "Companies are sending people out to develop professionally and then bring that knowledge back to the head office or other locations. That's been a big change in the strategic approach companies are using for international assignments."