Global Mobility Policies: How to write an effective Core / Flex Policy?

Core/ Flex Policies are back. They were very popular at the end of the 90s and during the early years of the millenium but had disappeared due to mixed feedback from expatriates. Core/flex policies are now back, and this time I think the time is right for them to be successful. Why? Primarily because the relationship between the employer and expatriates has changed, and the digital revolution facilitates the implementation of such policies.

The relationship has changed since the employer is now required to provide immediate support satisfying the needs of the employees for the duration of the assignment. We are no longer managing lifelong expatriates; it is all about efficiency under a pre-defined budget.

The digital revolution allows the capacity to manage more providers and an exchange of data among providers, thereby giving us an opportunity to offer more choices. In addition, the relocation software such as apps on the iPhone offers a new interesting way to communicate these choices.

So if we think that now the time is right to implement a core/flex policy, which guidelines should we follow?

• Audit: there is no way escaping it. You must first audit all policies in place and must also be well aware of current and future migration flows. You must know your expatriates.

• Spend some time exchanging with business units, HR departments (Talent / Comp and Ben, payroll) in order to determine which benefits will be core and which ones will be optional.

• Think about administration as well. Who will approve the flex options and manage the service providers?

• And lastly what about exceptions? No Global Mobility Policy is without exceptions and Core / Flex does not escape the rule, so who will autorise the exceptions?

It is important to manage the exceptions request to see if they are required, often leading to the need to consider changing the policy. Do not forget that even a Core / Flex Policy adapts itself.

Once you have identified your population, the flow and the objectives, you need to work on the main piece, which is Core versus Flex.

My experience tells me that there are more Core benefits than one might think. Beyond the obvious ones like tax, immigration, expense reimbursement and shipment of goods, you will probably need to set a minimum for intercultural training, spousal assistance, settling assistance and home finding support.

For instance, we could allocate benefits according to the following table:

As you can see from the table below, Core benefits may be linked to grading: a young graduate may not have the same core benefits as a Senior Executive. However, be careful not to create too much complexity by having a multitude of core benefits in the package.

Now that you have divided the benefits between core and flex, you need to figure out who will be the service providers. You may decide that you do not give the choice of all core benefits or select some tasks where you impose the provider (tax / immigration) but other elements of core benefits where you offer a choice of providers. For instance, for intercultural you may offer a choice among 2 or 3 providers.

Now that we have decided which benefits are core and which are flex and who are the providers, how do we offer the flex benefits?:

There are basically 3 possible solutions:

1) Numerical amount

2) A Value (Euro / USD / GBP) amount

3) A Points system mechanism

Under the numerical amount, the assignee gets a fixed number of core flex benefits (2, 3 or more) based upon his grading. He / she may choose among the multiple flex benefits offers regardless of the underlying cost.

Under the value system, the assignee gets a fixed budget (based upon grading) and can spend the relevant budget as he/she wishes among the multiple flex benefits. So, if he/ she purchases lower costs flex benefits, the number of flex benefits will increase.

The last system is a point system whereby the company has assigned a number of points to each flex benefit. It varies from the Value system since the number of points is not only related to cost. For instance, if the company has not included spousal assistance under the core benefits but wishes to push for it (as we know that a relocating employee’s partner’s inability to adapt to the new environment in the host location remains one of the largest causes of international assignment failure), the number of points assigned to spousal assistance could be reduced, thereby making this flex benefit a good value points benefits. We may even categorise all flex benefits under a colour code (Red, Yellow, Green) informing the assignee on the points value / cost of the benefits. A green code would mean that few points are spent compared to the cost of the benefit. We can easily visualise an app where all flex benefits are displayed with points for each and a colour code for value.

The last piece concerns communication. The policy should be easy to follow and clearly communicated including roles and responsibilities. As seen from above, it is easy to build a complex core / flex policy where assignees will be lost. It is very important to keep it as simple as possible.

In conclusion, Core / Flex policies applied with the right technology can offer a very interesting way for a company to manage its expatriates and their multiple requirements. However, my view is that it is highly complex to design and implement in order to make it a simple tool to use. Companies more inclined to succeed will be companies with a mature experience on multiples policies and the budget needed to make it work. See it as a Rolls-Royce of Policies and not as a simple cost-reducing way of managing expatriates. For a company starting in Global Mobility nothing beats a simple, single structured policy with a clear process and control for policies exceptions.