As the world is getting smaller, its workforce is becoming more mobile.
In 2017, 66.2 million people travelled to live abroad, up from 52.8 million in 2013, according to research by Finaccord Ltd. That figure is expected to balloon to 87.5 million in 2021. In Canada alone, about 2.8 million people live and work abroad, according to the Canadian Expat Association.
Since employees account for more than 70 per cent of expats, according to the Finnaccord study, this growing trend will have many implications for Canadian employers, particularly when it comes to providing health benefits and helping expat workers adjust to life in another country.
With more companies sending people to work across the globe, it’s important to balance employees’ expectations and manage the inherent risks, including costs, says Shabnam Malik, a senior manager in the international assignment solutions group at PricewaterhouseCoopers Canada.
“The benefits have to be consistent across the board but, at times, it can be challenging because one benefit may be available to [employees] in Canada but may not be available to them in a host location due to some of that country’s restrictions.”
When designing benefits for expats, employers will have to consider the business practices in other countries, says Greg Fayarchuk, managing director for Canada at Buck Consultants. Some countries have unique benefits, he says, noting in the Philippines, for example, employees are entitled to a rice subsidy.
As a result, employers have to take cultural differences into account. “They want to make sure they’re doing it right and getting high value work from employees, so they have to make sure they’re calculating the right benefits at a local and regional level,” says Fayarchuk.
Even within Canada, there are differences to weigh when choosing a benefits plan. In Nunavut, employees receive an inflated salary and benefits because of the higher cost of living, he says.
On top of ensuring that benefits are fair among expats, employers also have to comply with foreign legislative requirements, says Jason McCormick, head of sales and service for Canada at Aetna Inc.
Expats won’t be allowed in the Middle East if their medical coverage isn’t compliant with the region’s laws, he says. In fact, in some Middle Eastern countries, it’s mandatory for a local insurer to be the underwriter of a foreign employee’s policy.
Generally, PwC navigates these foreign laws by transferring employees on long-term assignments into the host country’s benefits plan, says James Spearing, the company’s resourcing and recruitment leader in Canada. “We ensure that our people have no gaps in service because, with these pieces, we want to make sure that, from the health perspective, any insurances never lapse. We need to make sure employees are covered from the moment they get on the plane, during the travel and upon arrival.”
On the ground
Immigration is also a complex issue when employees go overseas. PwC provides its expats with compliant work papers and permits before the transition, says Malik, noting the company also helps expats navi-gate their host country’s unique tax laws.
But recent geopolitical events have complicated global mobility, says Malik. “What’s happening in Europe from Brexit and what’s happening in the U.S. with the tax reform — things are changing. So we have to make sure our global mobility policies are being updated. And it has to be very dynamic and flexible.”
It’s also important to carefully screen candidates, says Paul Wittes, director of global partners, trauma and privacy at Morneau Shepell Ltd. Besides the necessary skills for an overseas position, candidates should also be mentally prepared to go through a big lifestyle change, he notes. Employers can have a “star in the office,” says Wittes, but if these employees aren’t supported during their time abroad, employers run the risk of a work assignment running amok.
Deloitte Ltd. Canada has lengthy conversations with internal candidates before they’re sent on an international assignment, says Fatima Laher, national tax leader for the company’s global employer services group. “We don’t just say, ‘You’re going.’ There are a lot of discussions. We talk about a pre-assignment consultation, and it’s really about giving the individual the lay of the land in the context of what they can expect and what’s going to happen.”
Supporting employees and their families as they acclimatize to their new environment is also key to a foreign assignment’s success, says McCormick. “At one point, our employers would just buy an insurance policy that covered members and they would then be left to navigate those countries and medical systems on their own with no assistance from the insurance carrier or their employer,” he says. These days, employers are much more focused on their expats’ experience, he adds.
As well, employers are getting better at communicating the new benefits to employees so they’re comfortable navigating a foreign country’s medical system, says McCormick. “That’s where the trend is changing, to more of an environment where the insurance carrier is not only the provider of a financial solution, an insurance contract, but they are the provider of a member experience.”
Many companies are using mobile apps to engage with employees and their families, says Nancy Brown, sales director for Canada at the Empire Life Insurance Co.’s voyageur global benefits. Online resources are particularly important because they’re accessible to everyone, she says, citing family assimilation as a major reason assignments fail.
Employers can avoid this common trap by opening up communications channels, says Brown. “It’s not safe to assume that employees will share everything they learn from HR with their partner.”
At PwC, employees receive relocation support in the form of city and country guides, says Spearing. Expat families can also access relocation services such as temporary accommodation, school and home search and employment and language services.
“At the end of the day, the idea is to make assignments as hassle-free as possible,” says Malik. “It is kind of administrative-heavy and can be burdensome, but the success of any assignment would depend largely on whether the assignees are happy along with the family and their dependants.”
On the horizon
Millennial workers will shape the future trends in global mobility, according to Malik. “They’re more willing to relocate for job purposes but they’re also demanding more flexibilities,” she says. “So the trend in the market right now is to offer expat packages in which they get to choose benefits within the budget that is allocated them.”
It’s also now more common for assignments to last less than a year compared to the traditional three years or more, says Laher. “We’re seeing people becoming more mobile, travelling more for shorter periods of time and not uprooting their lives.”
For instance, more professionals are commuting regularly between Canada and the U.S. instead of moving south of the border, she says. “Especially with the real estate market, people are not willing to sell homes. If it’s viable, they are commuting, and that’s been fascinating for me because I’ve seen that change in the last three years.”
Jann Lee is an associate editor at Benefits Canada.