If you’ve heard the term “Expat Lite” thrown around, you may be wondering: 1. what exactly is that? and 2. is this something my company should include in our global mobility program? With many companies trying to reduce costs, relocation programs with international assignments are getting a second look with an eye towards savings, and Expat Lite has grown out of that. But are these programs good for both your bottom line and your overall global mobility program, or are they more trouble than they’re worth?
What Does Expat Lite Mean?
Basically, Expat Lite policies have reduced benefits from your standard relocation policies. While compensation and taxes are typically handled the same way, other program features are either decreased or removed entirely. For example, any or all of these features could be affected:
- Household goods – limit shipments to a lower weight than normal
- Housing – give a lower housing allowance, switch to a reimbursement format with a lower cap or provide smaller accommodations in lower-priced areas
- School/education – if dependents are included in the relocation, the assignee will pay for any private education on their own if they opt out of local schooling
- Cost of living adjustments – limit this to what a local would spend or to the costs in the more moderately priced areas
When building an Expat Lite policy, look at these and the many other areas of your full relocation policies and see which ones make the most sense for reduction. Try to strike a balance that makes relocation still appealing while also helping your bottom line.
Will Expat Lite Work for My Company?
Obviously, saving money is an appealing prospect, but don’t jump into a program like this too quickly without first considering possible consequences. Ask yourself these questions:
- Will offering these reduced benefits lose us great candidates? How does this align with our culture?
- Does this mean we’re relocating people who aren’t necessarily the best for the job?
- Are we going to upset employees if they compare their benefits to those of their colleagues?
If the answers are yes, you may want to avoid Expat Lite entirely. Or you could set out with a plan of action to make sure those answers are no.
What to Consider
Don’t try to sell an Expat Lite policy to someone you would typically give full benefits. This should be used as supplementary – in other words, if you’re looking to move someone lower on the company hierarchy or increase the number of relocations overall. Candidates who are excited to relocate abroad or are actively seeking such a relocation may be right for an Expat Lite policy.
Also, don’t choose a candidate just because they’ll accept the less expensive policy. In the end, this could cost you more money if they fail and you have to start all over with someone new. Along the same lines, make sure the reduced benefits aren’t setting your assignee up for failure – features like cultural counseling or candidate assessment are important to make sure the assignment is a good fit. An employee may think they’ll be fine with a lower cost of living or housing budget, but that might not be the case once they’re in place. All of this should be considered ahead of the relocation.
Finally, if you’re going to introduce an Expat Lite policy into your program, create concrete guidelines as to who will be offered which type of program and why. If you’re up front about it and make sure your employees understand that this is an objective process, they will be less likely to resist or resent the offer of a reduced benefits package.
Weighing the Pros and Cons
Now that you have an understanding of what Expat Lite is and how it could affect your global mobility program in both good and bad ways, you should consider if it makes sense for your company. This is a good time to consult your relocation provider, who will be able to help you clearly outline such a policy and provide you with a personalized assessment and recommendations. It may be that Expat Lite just isn’t a great option for you, or there could be opportunity there. Either way, make sure you approach it with your eyes open and a clear plan of action.