Expat Lite versus Local Plus – What’s the Difference?

A recent SIRVA report¹ shows that cost management and cost minimization remain top mobility challenges faced by companies today. International Long Term packages for mid/low tier employees are expected to increase by 35%, and International Permanent Relocations in the “local plus” category are expected to rise by 30%; but what is the difference between the two types of moves?

Alternatives to Traditional Relocation Policies

Traditional assignment or permanent relocation packages may not be appropriate for the situation given the nature and intent of the move or the profile of the employee, and may result in unnecessary or inadequate mobility spend.  “Expat Lite” and Local Plus packages are introduced to a mobility program framework to provide alternatives to the traditional Long Term and Permanent Relocation policy options (respectively).

Expat Lite Packages

Similar to a traditional Long Term package, expat lite packages are home based – the employee remains tied to the home compensation and benefits structure, and the intent is for the employee to return to the home location after one to three years in the assignment location (with an option to extend up to five years maximum).

Components of Expat Lite Packages

These packages are derived from the full long term package, with adjustments made in either the nature or level of support provided at the provision level.  For example, a long term package may include a reimbursement for spouse/partner support, which is removed for the expat lite package. Another option is an adjustment to how the support is calculated.  When calculating the cost of living allowance, the long term package may use a higher base salary for the calculation than the expat lite package.  The allowance is provided in both scenarios, albeit at a different level for each move type.

Variations in Support Packages

The degree of variation between support packages as well as the nature of variation will be based on company culture and appetite for differentiation.  Some organizations begin redesign activities, only to realize that their corporate culture and mobility approach will not support differentiation for the sake of differentiation; others argue that each move represents a different value for both the employee and the company, and therefore it makes sense to vary the support provided under each package.

Areas of Opportunity

Expat lite packages are most commonly applied for early-mid career employees who are deployed for talent development purposes or to fill an immediate resource gap/project need in the host location.

Local Plus Packages

Local plus packages align more closely to Permanent Relocations in that they are both host based – the employee ceases employment with their home location employer and transitions to the host/destination compensation and benefits structure – with an expectation that the employee will remain in the destination location indefinitely.

Components of Local Plus Packages

Unlike a permanent relocation package where company support is typically limited to limited compliance, physical relocation and temporary on-the-ground services, the “plus” elements of the package will include provisions pulled from a more traditional long term package.  The premise behind the “plus” is to offer additional incentives for an employee to relocate on a host-based package, which may be more cost effective in the long term for the company when compared to a long term assignment.

Additional Incentives

The additional support that is provided may include soft skill support such as cultural training or spousal/partner support, as well as allowance that facilitate the integration of the employee to the host location.  Examples include host housing allowance, cost of living allowance and dependent education assistance.  In most cases, these allowances are not paid indefinitely, but rather as a lump sum payment at the time of relocation or phased out over a two to three year period.

Areas of Opportunity

Similar to permanent relocation packages, local plus moves are most successful when the employee is moving from a low cost location to a high cost location (e.g., India to the US), and are typically used for employees in early/late career.

Alternative Policy Success Factors

Organizations have had great success in implementing alternative policy types, noting some critical success factors:

• Transparency is critical: Clear guidelines and eligibility criteria that dictate which employees fall into a particular move type and why are paramount to the success of alternate moves types
• Branding is important: While most in the relocation industry will recognize the term “expat lite,” most would much rather have the “full” version of support if the choice was applied to them.  It is important to brand the package not as the scaled back version of the long term package, but rather as a package that is rationalized to the value the opportunity presents for the employee and the organization.  And we recommend that you do not call it a “lite” package.  Some organizations have been creative by naming their policies based on color.  Policy naming conventions should align with corporate culture and should encourage (not deter) global deployments
• Policy framework should be defendable and stakeholder supported: It is critical to involve key stakeholders in any discussions regarding changes to your policy framework.  Any mobility framework should reflect how mobility is used today, as well as how mobility is expected to be used in the future.  By engaging stakeholders throughout the redesign process, you have an opportunity to not only build consensus, but also to vet support levels to facilitate buy in

¹ SIRVA: 2017 Mobility Report: Talent Mobility for Business Growth – Aligning Practices to Drive Organizational Impact (publication pending)