The SIRVA India Mobility Report. Volume 1, 2012

Transcription

1 2012 Volume 1

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3 The SIRVA India Mobility Report Volume 1, 2012 Copyright SIRVA Pty Ltd SIRVA is a registered service mark and the SIRVA LOGO DESIGN is a service mark of a subisdary of SIRVA, Inc

4 About SIRVA Aleading worldwide provider of relocation and moving solutions, SIRVA operates in more than 150 countries with over 2,300 mobility specialists and provides more than 230,000 relocations per year to corporations, government employees, and individual consumers. The company delivers all aspects of relocations end-to-end within its own network, including services in international HR consulting, international compensation, visa and immigration, assignment management, destination services, expense management, and household goods moving and storage. SIRVA has an unrival commitment to thought and industry leadership, and is currently engaged in a range of related projects including: Roundtable discussions on global mobility policies and practices at a variety of conferences and seminars, i.e. visa and immigration, assignment management. Sponsorship of the Australian Human Resource Institute (AHRI) Convention, global mobility special interest groups, HR Directors Forums and the Worldwide Employee Relocation Council Benchmarking mobility policies and practices, assisting organisations in reviewing and redesigning their global mobility infrastructure Conducting research on mobility policies and practices for emerging locations, i.e. China, India Integrating and developing higher performing organisations through cultural awareness and diversity Delivering global mobility trends to our clients SIRVA University, a learning platform for organisations SIRVA Relocation is also the Australian representative for ORC mobility products. Mercer acquired ORC Worldwide in With services designed to reduce risk exposure and relocation costs, streamline administration and improve employee satisfaction SIRVA delivers: International HR Consulting International compensation data products ORC products and services Visa and Immigration Assignment Management Cross-Cultural and Intercultural Programs Destination Services, including orientation, home, education search Expense Management Household goods moving and storage Housing Reports and services Insurance and Claim Management Move Management 4 The SIRVA India Mobility Report - Vol. 1, 2012

5 The SIRVA India Mobility Report Table of Contents Section A Introduction 6 Report structure 7 1. Assignment Analysis Location demographics Assignees represented by industry in Tier 1 and Non Tier 1 locations Assignment types represented across industries in Tier 1 and Non Tier 1 locations Assignment types and definitions Mobility patterns current and planned Policies and Practices Policy differences between international and domestic assignments Policy differences between industries Policy elements for International Assignments Cost projections Orientation Cross cultural transition program Language training Partner career support Remuneration approaches Cost of Living allowance Remote or Hardship allowance International assignment premium Incidental or Relocation allowance Housing assistance Home leave travel Rest and Recreation leave Private transportation Education assistance Transportation of household goods, pets and storage Home and education search services Repatriation Policy elements for Domestic Assignments Cost projections Orientation Remuneration approaches Remote or Hardship allowance Incidental or Relocation allowance Housing assistance Private transportation Education assistance Transportation of household goods, pets and storage Home and education search services Home sale and purchase assistance Assignment Management HR and Mobility challenges Acknowledgements About the Research Leader 41 Section B 1. About the SIRVA India Mobility Report Participants of the research Industry reports Participants of the research Banking/Financial Services 47 IT/Telecom 58 Manufacturing / Petrochemical 75 Miscellaneous 93 The SIRVA India Mobility Report - Vol. 1,

6 Introduction SIRVA Relocation has created this unique India Mobility Report to address the lack of readily available benchmark information on international and domestic mobility policy and practices. The report also addresses local insights pertinent to challenges faced by international assignees or business managers and explanation of some of the policy elements which are crucial when interpreting and implementing mobility policy and practices in India. With heightened activity in India, this data and information is vital for HR and business managers to make informed decisions when supporting and leading mobility strategies for their companies and employees. India, the second fastest growing economy, is expected to accelerate its GDP by an annual average rate of 8.3% over the next five years. This growth can be sustained, at least in the medium term, with its favourable demographic profile of a young and rapidly growing population (1). As reported by McKinsey Global Institute, India requires thriving cities if that dividend is to pay out. McKinsey estimates that there will be a nett increase of 270 million people in the working age population, and cities could generate 70 percent of new jobs created to 2030, produce more than 70 percent of Indian GDP, and drive a near four-fold increase in per capita incomes across the nation. Additionally, 68 cities will have a population of one million people or more up from 42 cities today. (2) Expansion into Non Tier 1 cities is inevitable and evolving at a faster pace, while India is still waking up to its urban realities and opportunities. Although the reality is that some urban cities or Non Tier 1 locations are attractive in terms of better quality of life, growing affluence levels, improved physical connectivity, more purchasing power. The consumer base is also large and growing but the infrastructure for expatriate living is not ideal. (3) immigration processes, new social security rules, taxation regime, cultural differences, security concerns and a highly disorganised real estate market have created a particularly challenging human capital and workforce environment. Additionally, India s broad ethnic and linguistic diversity (with more than 300 known languages; 24 of these spoken by at least one million people) creates further challenges in both international and domestic assignments. English enjoys the status of subsidiary official language but is the most important language for national, political, and commercial communication; Hindi is the most widely spoken language and primary tongue of 41% of the people; there are 14 other official languages. Major challenges as reported by participants include the changing business and talent environment, coupled with high cost of assignments, lack of qualified resources to manage these assignment programs and increasing tax and immigration compliance, the sourcing and deployment of talent has become a critical issue for all organisations. The SIRVA India Mobility Report, a central source of information about the trends of key policy and practices components of international and domestic assignments across industries in India, will assist to strengthen leadership development, facilitate a diffusion of talent, link business and mobility strategies and address these global mobility imperatives vital to achieving a true competitive advantage. The report provides a detailed reference tool benchmarked by a number of variables (industry sector, policy type, locations) to help organisations comprehend not only the evolving mobility policy and practices in India, but its complexity in the application of these policies and practices. India has been investing heavily in creating opportunities for global organisations to launch new operations in the country. Generally in these organisations, foreign workers are engaged in key and higher level positions. However, the complexity associated with the employment of foreign workers with 6 The SIRVA India Mobility Report - Vol. 1, 2012 (1) Global Forecasting Service, Economist Intelligence Unit (2) McKinsey Global Institute India s urban awakening: Building inclusive cities, sustaining economic growth (3) An Increasingly Affluent Middle India is harder to ignore India Knowledge@wharton

7 Report Structure The SIRVA India Mobility Report represents an up-to-date analysis of data provided by 10 industries spanning short term, long term and permanent one-way assignments for both international and domestic moves across Tier 1 and Non Tier 1 locations in India. Several industries were consolidated into four groups using a best-fit approach and to preserve the confidentiality of participating companies, where there were three or less participants for a single industry. The industry groups are consolidated as shown in the following table: Industry type reported Banking/Financial Services IT/Telecom Manufacturing/Petrochemical Miscellaneous Industries consolidated Banking, Financial Services IT, Telecom Manufacturing, Petrochemical Agriculture, Pharmaceutical, Professional Services, Publishing SIRVA Relocation wishes to acknowledge and thank the 22 leading companies that contributed to this new report. Their contribution to this unique SIRVA research initiative provides the foundation for valuable policies and practices benchmark for HR and business professionals. Research contributions closed in mid-2011, ensuring this report provides recent information for HR professionals to compare their mobility policies and practices across all major industries as well as against assignment type and crucially, across Tier 1 and Non Tier 1 locations. The SIRVA India Mobility Report is an ongoing living research initiative that enables participants to update policies and practices online. SIRVA Relocation will publish biennial comprehensive updates to the Report to: Ensure ongoing insights into variances of assignment types and policy applications Establish a template for tracking and exploring emerging policy trends and administration practices Provide a reference point from which to develop strategies that challenge traditional thinking versus flexible and fit-for-purpose application of policy The results of this research have been divided into two sections: 1. Section A provides: analysis of the key findings across all industries, for assignment policies, separated against international and domestic assignments analysis of the key findings across all industries, for assignment practices and management challenges local insights pertinent to the various policies and practices elements explanation of various policy elements to provide clarification and overcome interpretation concerns. 2. Section B provides detailed reports for each of the four consolidated industry sectors across: International: Tier 1 and Non Tier 1 locations Domestic: Tier 1 and Non Tier 1 locations Terminology When reading the information and interpreting the data, please note that the percentages are calculated based on the companies who responded to each particular question. Not every question is relevant to all of the companies, so percentages will vary between questions. All percentages are rounded to the nearest whole number. The SIRVA India Mobility Report - Vol. 1,

8 Contact Details Lorraine Jennings Senior Manager, IHR Consulting Services Asia Pacific and Middle East SIRVA Relocation Australia Nigel Smith General Manager SIRVA Relocation Australia The SIRVA India Mobility Report - Vol. 1, 2012

9 Section A The SIRVA India Mobility Report Volume 1, 2012 The SIRVA India Mobility Report series is the first ever mobility policy and practices benchmark spanning major industries, various assignment types and, crucially Tier 1 and Non Tier 1 locations. It assists businesses with the creation of their India mobility strategies and promotes informed decision-making.

10 1. Assignment Analysis 1.1 Location demographics The following table represents the locations that participating companies reported working in during A total of seven Indian Tier 1 cities were represented, while participating companies reported that they had operations in 12 Non Tier 1 cities. Tier 1 Bangalore Chennai Hyderabad Kolkata Mumbai New Delhi Patna Non Tier 1 Bhopal Bhubaneswar Chandigarh Dehradun Gandhinagar Itanagar Jaipur Jammu Lucknow Panjim Raipur Ranchi There is no established definition of Tier 1 and Non Tier 1 locations. Research indicates that the status of Indian cities comprises two ranking systems A and B used by the Government of India to allocate compensatory city allowances and House Rent Allowances for employees who are mobile. The category A cities comprises national capitals and category B further ranks cities dependent on population and business infrastructure. This concept is not dissimilar to SIRVA Relocation s definition. SIRVA Relocation, through its research, has created the following criteria to explain the differences between Tier 1 and Non Tier 1 locations from an expatriate living perspective: Tier 1 Non Tier 1 Tier 1 or top-tier cities are classified as national capitals or recognised national economic hubs, which have experienced exponential growth. For historical and geographic reasons, these cities have better infrastructure as well as stronger, most enduring links with the outside world. The primary distinction to determining whether a location is designated Tier 2 or Tier 3 or beyond has been broadly based on economic considerations, including: Level of annual GDP per capita Whether a city is located in a region of strategic development Level of business infrastructure Growing domestic demand and government spending Some of the Non Tier 1 locations have seen a much faster rate of growth than Tier 1 cities. In addition, from an expatriate standard infrastructure perspective, Tier 2 locations have limited expatriate standard infrastructure including international-standard housing, schooling and health care, while Tier 3 locations would have minimal or no expatriate-standard infrastructure in place. 10 The SIRVA India Mobility Report - Vol. 1, 2012

11 1.2 Assignees represented by industry in Tier 1 and Non Tier 1 locations International All participants reported presence in Tier 1 locations. The Manufacturing/Petrochemical sector shows the highest representation of assignee population in Non Tier 1 locations, followed by the IT/Telecom and Miscellaneous sectors. Representation of industries in Tier 1 and Non Tier 1 - International Percentage of companies Tier 1 Non Tier 1 Tier 1 Non Tier 1 Tier 1 Non Tier 1 Tier 1 Non Tier 1 Banking/ IT/Telecom Manufacturing/ Miscellaneous Financial Services Petrochemical Industry Sector Domestic All participants reported presence in Tier 1 locations. The Manufacturing/Petrochemical and Miscellaneous sectors show the highest representation of assignee population in Non Tier 1 locations, followed by Banking/Financial Services. Representation of industries in Tier 1 and Non Tier 1 - Domestic Percentage of companies Tier 1 Non Tier 1 Tier 1 Non Tier 1 Tier 1 Non Tier 1 Tier 1 Non Tier 1 Banking/ IT/Telecom Manufacturing/ Miscellaneous Financial Services Petrochemical Industry Sector The SIRVA India Mobility Report - Vol. 1,

12 1.3 Assignment types represented across industries in Tier 1 and Non Tier 1 locations International Of the participating companies, 41 percent of companies reported international long term assignments in Tier 1 locations, followed by 35 percent of companies reporting international short term assignments and 24 percent of companies reporting international permanent one way assignments. The Banking/Financial Services sector was not represented in international assignments in Non Tier 1 locations, while companies from the IT/Telecom and Manufacturing/Petrochemical reported using only long term and short term assignments in Non Tier 1 locations. The following graph provides a snapshot of the industries and assignment types in Tier 1 and Non Tier 1 locations against international assignments. Assignment types represented across industries in Tier 1 and Non Tier 1 location - Internatonal Percentage of companies Tier 1 Tier 1 Non Tier 1 Tier 1 Non Tier 1 Tier 1 Non Tier 1 Banking/ IT/Telecom Manufacturing/ Miscellaneous Financial Petrochemical Services Short Term Long Term Permanent Short Term Long Term Permanent Short Term Long Term Permanent Short Term Long Term Permanent Domestic Companies across all industries reported an even spread of domestic short term, long term and permanent one-way assignments in Tier 1 locations. While IT/Telecom did not report representation in domestic assignments in Non Tier 1 locations, there is an even spread across the remainder of the industries for short term, long term and permanent one-way assignments in Non Tier 1 locations. The following graph provides a snapshot of the industries and assignment types in Tier 1 and Non Tier 1 locations against domestic assignments. Assignment types represented across industries in Tier 1 and Non Tier 1 location - Domestic Percentage of companies Tier 1 Non Tier 1 Tier 1 Tier 1 Non Tier 1 Tier 1 Non Tier 1 Banking/ IT/Telecom Manufacturing/ Miscellaneous Financial Services Petrochemical 12 The SIRVA India Mobility Report - Vol. 1, 2012

13 The following chart indicates percentage of companies in Tier 1 and Non Tier 1 against international and domestic assignment types: 60 Percentage of companies in Tier 1 and Non Tier 1 against assignment types - International Percentage of companies Tier 1 Non Tier 1 Short Term Long Term Permanent One Way Percentage of companies Percentage of companies in Tier 1 and Non Tier 1 against assignment types - Domestic Short Term Long Term Permanent One Way Tier 1 Non Tier 1 The SIRVA India Mobility Report - Vol. 1,

14 1.4 Assignment types and definitions International The following table provides a snapshot of definitions against international assignment types: Typical assignment types Definition Short Term up to 12 months Short term assignments, typically 12 months Short term developmental or project based assignments Generally unaccompanied Assignees remain employees of their home location Home based remuneration package Periodical return home, especially if unaccompanied, typically between 8-12 weeks, dependent on location and business arrangement Host tax compliance, if applicable Return home at end of assignment or continue on with another assignment Long Term three to five years Long term assignments, typically three to five years Accompanied Assignments typically initiated by the company Assignees remain employees of their home location Home based remuneration package with host deliverables, i.e. housing and car Assignees are typically tax equalised Return home at end of assignment or continue on with another assignment Permanent one-way Permanent transfer or fixed term contract of locally hired foreigners, i.e. from various global locations, some of whom are settled in India with very little intention of returning to their home location. Also returning Indians with western qualifications and experience Accompanied Assignments initiated by the employee or the company Employment status transfers to the host location when the home location is terminated Individuals are employed on local-plus or hybrid status with standard host local terms and conditions as base package, with added allowances geared toward relocation benefits which are usually phased out after three to five years. The added allowances typically consist of a relocation allowance and cost associated with moving, i.e. travel and household goods shipment. Some companies include a cost of living and hardship factors, dependent on location All associated tax costs are borne by the individual Transitioned to local terms between 2-5 years 14 The SIRVA India Mobility Report - Vol. 1, 2012

15 Domestic While domestic assignments have been in place for a number of years in India, many organisations, until recently, have not had a formalised approach to the various assignment types. The following table reflects definitions against domestic assignment types: Typical assignment types Definition Short Term up to 12 months Short term assignments, typically 12 months Short term developmental or project based assignments Generally unaccompanied Assignees remain employees of their home location Periodical return home, especially if unaccompanied, typically between 8-12 weeks, dependent on location and business arrangement Typically no tax implication Return home at end of assignment or continue on with another assignment Long Term three to five years Long term assignments, typically three to five years Accompanied Assignments typically initiated by the company Assignees remain employees of their home location Typically no tax implication Return home at end of assignment or continue on with another assignment Permanent one-way Transfer of an employee for an indefinite period Accompanied Assignments initiated by the employee or the company Employment status transfers to the new location The top 5 popular worldwide locations from which assignees are assigned to India: 1) USA 2) UK 3) Australia 4) Hong Kong 5) China The top 5 popular destinations for assignments into India: 1) Mumbai 2) Bangalore 3) New Delhi 4) Chennai 5) Hyderabad The SIRVA India Mobility Report - Vol. 1,

16 1.5 Mobility patterns current and planned Overall, 78 percent of companies reported that they had between 0-50 employee moves, or relocations, while five percent of companies reported moves and another five percent reported over 600 moves, demonstrating that companies favour where possible the use of internal resources in projects whether it is to provide training, establish new projects or oversee progress. Additionally, 33 percent of all moves across industries are due to business need, while 26 percent of moves are to introduce a knowledge expert to the project, and 22 percent of moves can be attributed to specific projects. Only six percent of moves are the result of the employee s own decision, and 12 percent of moves are for career advancement. The types of international and domestic assignments (short term, long term and permanent one-way) varied between industries and geographical areas, with Banking/Financial Services leading the use of international long and short term assignments in Tier 1 locations, while Manufacturing/Petrochemical companies report higher use of international long term assignments in Non Tier 1 locations. IT/Telecom and Manufacturing/Petrochemical sectors are most likely to use domestic Tier 1 assignments, while Manufacturing/Petrochemical companies also lead the use of domestic Non Tier 1 assignments. International Nearly 76 percent of all companies reported between 0-50 international assignments. Additionally, four percent of companies reported assignments, eight percent reported assignments and eight percent reported 600+ assignments. Fifty percent of the participants reported that they expect mobility patterns to increase within the next two years, while 47 percent of participants believe that mobility patterns will remain the same and only three percent believe that mobility patterns will decrease combined across Tier 1 and Non Tier 1 locations. The graph below provides the breakdown of international assignment patterns across Tier 1 and Non Tier 1 cities over the next two years: Expected changes in Tier 1 and Non Tier 1 cities over the next two years - International Remain The Same Increase Tier 1 Non Tier 1 Decrease Percentage of companies The graph below provides the breakdown of international assignment patterns across assignment types over the next two years: Expected changes in assignment types over the next two years - International Remain The Same Increase Short Term Long Term Permanent One Way Decrease Percentage of companies 16 The SIRVA India Mobility Report - Vol. 1, 2012

17 Domestic Eighty-three percent of all companies reported between 0-50 domestic assignments, eight percent of the companies reported assignments and eight percent reported assignments. Sixty-nine percent of the companies expect mobility patterns to remain the same within the next two years, while 31 percent of participants believe that mobility patterns will increase, as the graph below suggests. The graph below provides the breakdown of domestic assignment patterns across Tier 1 and Non Tier 1 cities over the next two years: Expected changes in Tier 1 and Non Tier 1 cities over the next two years - Domestic Remain The Same Increase Tier 1 Non Tier Percentage of companies Expected changes in assignment types over the next two years - Domestic Remain The Same Short Term Long Term Permanent one way Increase Percentage of companies The SIRVA India Mobility Report - Vol. 1,

18 2. Policies and practices The SIRVA research reveals that companies are predicting an increase in international and domestic assignments across Tier 1 and Non Tier 1 cities. It is also fair to assume that participants may have classified some Non Tier 1 cities as Tier 1 cities because of its exponential growth in recent times. As Non Tier 1 locations expand with sound infrastructure for transportation, hospitality, health care, education and recreation, it can be envisaged that extensive residential and commercial infrastructure will be required to cater for the growth equivalent to adding more than two Mumbais or one Chicago every year (1). On the other hand, even with India s continuing economic growth and abundance of skilled talent, emergent employment practices are making it difficult to predict how organisations will train and manage employees in the next few years. For example, in the May 2011 edition of McKinsey Quarterly, it was revealed that India-based support centres are seeing fewer expats: more organisations are engaging locals to run such facilities, after sending the managers to the company s developed-market operations for necessary training. (1) Regardless whether India is able to keep up with the growth and urbanisation, businesses will continue to expand and companies will continue to build out in Non Tier 1 cities. With this in mind, organisations will need to be proactive in designing and formalising a framework of international and domestic mobility policies and practices relevant to their industry. It is encouraging to note that the McKinsey data validates the SIRVA research where the largest markets will include transportation, communication and health care industries, based on the predicted growth by assignments and industries. 2.1 Policy differences between international and domestic assignments Policy elements are comprehensive for international assignments across Tier 1 and Non Tier 1 locations compared to domestic assignments. The India domestic mobility market is only just starting to emerge and will mature over time. Companies are using the international framework to develop the domestic framework of mobility policies and practices. The following table provides the differences in policies and practices between international and domestic assignments. Policy elements International Domestic Cost projection Most companies complete a cost projection from capturing relocation costs, salary and benefits and the total employment cost for the duration of the assignment, inclusive of repatriation Focus for some companies is across the areas of total cost of relocation and total employment cost Orientation Orientation trips range between 1 and 7 days and case-by-case Orientation trips range between 1 and 5 days and case-by-case Cross Cultural Transition Program Most companies report providing crosscultural training delivered by external consultants either face-to-face or via an online tool Not applicable Language Training The majority of companies provide language training Not applicable 18 The SIRVA India Mobility Report - Vol. 1, 2012 (1) McKinsey Global Institute India s urban awakening: Building inclusive cities, sustaining economic growth

19 Policy elements International Domestic Remuneration Package The majority of companies link base salary to the home location. Most companies report using a home based balance sheet approach to remuneration Local remuneration and benefits structure applies Cost of Living allowance Just over half of companies provide a Cost of Living allowance for international assignments, generally calculated as a percentage of gross base salary Not applicable International Assignment Premium Around 50 percent of the companies provide a premium allowance. Companies pay variables, i.e. 10 percent and 20 percent of base pay and case-bycase Not applicable Remote or Hardship allowance Around half of the companies provide a hardship allowance Twenty-six percent of companies provide a hardship allowance. Some companies add the allowance to the salary build-up Incidental or relocation allowance Most companies provide some form of incidental or relocation allowance, typically calculated by family size or percent of base salary Relocation allowance typically dependent on family size or 10 percent of base salary Housing norm Fifty-two percent of companies deduct a housing norm Not applicable Housing assistance Majority fund full cost of housing for short term assignments Partial rental support for long term assignments. Utilities Actual cost is reimbursed Not applicable Housing sale and purchase assistance domestic permanent one-way only Not applicable Transaction costs are reimbursed, i.e. legal, real estate agent fees, government charges, etc. Home leave travel One to two trips per year dependent on host location Not applicable The SIRVA India Mobility Report - Vol. 1,

20 Policy elements International Domestic Rest and recreation leave (R&R) Costs that several companies cover include accommodation, travel and incidental expenses. The typical length of leave provided is 5-7 days, including travel time, dependent on location and travel time between locations Not provided Private transportation Eighty-two percent of participants provide some form of transportation, i.e. car allowance, car and driver, dependent on position, local policy, cocontribution, reimbursement Dependent on position. Education assistance Sixty-three percent of participants do not provide education assistance. Of those that do, the assistance is generally capped at a predetermined dollar amount Not provided Air freight assistance Limited air freight assistance provided dependent on assignment type Case-by-case Transportation of household goods long term assignments only Single/couple: 20 foot container Family: 40 foot container Case-by-case Household goods only, no luxury items Transportation of cars 1-2 cars One car Transportation of pets 1-2 pets Case-by-case Storage and insurance of household goods Storage and insurance is provided Insurance is provided Partner career support Repatriation Forty percent of companies provide a lump-sum payment, while others fund a career assistance program All customary services are provided for short and long term assignments Not provided Not provided 20 The SIRVA India Mobility Report - Vol. 1, 2012

21 2.2 Policy differences between industries All of the policy elements are standard across industries, but the application of each varies between companies with a range of benefits on offer. Examples of such variances are provided below, and a comprehensive overview of policy elements by industry type can be found in Section B. Manufacturing and the Petrochemical industries have had domestic assignments for a number of years and it is apparent that the foundation for policies and practices are mature compared to other industries. Examples of the policy differences between industries across international and domestic include: Policy elements Orientation Partner career support International Domestic International and domestic International and domestic Differences between industries Companies in the Manufacturing/Petrochemical and Miscellaneous industries provide orientation visit ranging from 1-7 days dependent on location. Banking/Financial Services and IT/Telecom provide 1-5 days Majority of companies provide a capped lump sum or Career Support programs within the Banking/ Financial, IT/Telecom and Manufacturing/ Petrochemical industries. Miscellaneous provides a lump sum arrangement Remuneration International Assignment Premium Cost of Living Allowance (COLA) Remote or hardship allowance Rest and Recreation (R&R) Incidental or Relocation allowance International International International International and domestic International International and domestic Some companies in the Miscellaneous and Manufacturing/Petrochemical industry delivers remuneration in the host location Banking/Financial Services, Manufacturing/ Petrochemical pay a premium that ranges from percent of base pay or a premium based on family size The COLA is reviewed by Banking/Financial Services if the fluctuation difference is between 2-5 percent; IT/Telecom between 5-10 percent Companies in the Manufacturing/Petrochemical industries pay a host-based hardship allowance compared to the other industries that use a mix of home and host-based approach Banking/Financial Services, Manufacturing/ Petrochemical industries provides between 5-7 days including travel; IT/Telecom up to 5 days Incidental allowance is paid by Banking/Financial Services, IT/Telecom and Manufacturing/ Petrochemical industries The Manufacturing/Petrochemical industry has the most consistent approach with Banking/Financial Services offering varied and conservative allowances The SIRVA India Mobility Report - Vol. 1,

22 Policy elements Housing norm International Domestic International Differences between industries Housing norm is not deducted by the Banking/ Financial Services industry, compared to some companies in the other industries who apply a housing norm Housing assistance Domestic IT/Telecom and Manufacturing/Petrochemical industries provide a range of assistance from funding full cost of housing to differential only Home leave travel International Companies in the Miscellaneous and Manufacturing/Petrochemical industries provide one trip per year compared to the other industries who offer two trips per year Private transportation International and domestic Banking/Financial Services and Manufacturing/ Petrochemical have a variety of options ranging from shared car, car and driver, car allowance to leased car arrangements Education assistance International and domestic Companies in the Manufacturing/Petrochemical and Miscellaneous industry provide a variation of assistance that range from capped amount to reasonable uncapped amount Assignment management International and domestic IT/Telecom, Manufacturing/Petrochemical and Miscellaneous outsource to Big-Four accounting firms and relocation companies, compared to the Banking/Financial Services who outsource to relocation companies 2.3 Policy elements for international assignments Eighty percent of participants policies and practices are formulated at their head quarters outside India, with 4 percent of policies driven out of the Asia Region and 16 percent have country-specific policies. Policy elements in this section cover international short, long and permanent one-way assignments Cost Projections One of the key challenges for global mobility and finance departments is to accurately budget and accrue costs for international assignees. This is a necessary process when done correctly as it allows organisations to anticipate the full cost of international assignments for each fiscal year. 22 The SIRVA India Mobility Report - Vol. 1, 2012

23 The graph below details the type of information companies include in a cost projection. Elements included in a Cost Projection Total Employment Cost Total cost of relocation (inclusive of travel, relocation services, transportation of household goods, storage, etc.) Salary and Allowances Relocation Services (home/education search, orientation, cross-cultural briefing) Percentage of companies Total employment cost is a detailed estimate of total expenditures, when relocating an assignee to a specific host location for the duration of the assignment. The estimate usually includes: salary, bonus, allowances, housing, travel, relocation, tax equalisation costs, taxable elements, other assignment-related costs and any mandatory ongoing payments in the home country and all repatriation costs. Organisations may include all or part of the above elements in their cost projections. Research indicates that majority of companies complete a cost projection prior to relocating employees. briefings, transportation of household goods etc and taxable components in the cost projection. Twenty-four percent of companies calculate the total cost of relocation and nearly 20 percent the cost of relocation services Orientation Sixty percent of companies across industries reported that they provide orientation, or pre-assignment trips, for their employees. The following graph depicts the variations that are apparent in orientation trips across all industries for international assignments. Forty percent of companies include the total employment cost, comprising salary and allowances, orientation, cross-cultural Orientation Trips across Tier 1 and Non Tier 1 - International Case by case 7 days 5 days 3 days Banking/ Financial Services IT/Telecom Manufacturing/ Pertrochemical Miscellaneous 1 day Percentage of companies The SIRVA India Mobility Report - Vol. 1,

24 2.3.3 Cross cultural transition program Fifty-seven percent of companies provide cross-cultural training delivered face to face by external consultants, 22 percent deliver cross-cultural training online and 9 percent provide library of information across all international assignments. Fifty percent of companies have made it mandatory for assignees to attend some form of cross-cultural briefing and 56 percent provide the training prior to departure. Cross-cultural transition is essential for the successful integration of assignees and families, in their host location, from a professional, social and family transition perspective Language training English is the official business language in India with the majority of professional workers in India speaking English, there are fifteen official languages with Hindi being the most widely spoken language. Language training is readily available across most Tier 1 and commercialised Non Tier 1 locations. Thirty-seven percent of companies provide ongoing language training support, while 21 percent of companies provide 40 hours of language training per individual, particularly for long term assignments Partner career support Dual careers and a more professional workforce is increasing, which is a further factor companies consider when providing the partner career assistance to ensure the assignment is successful. Forty percent of companies provide a lump sum payment for partner support. Thirty percent of companies do not provide partner support, while 15 percent provide a career assistance program for partners. Five percent of companies provide partner support equivalent to a percentage of the employee s salary. Working restrictions apply for the accompanying spouse and appropriate employment visa must be endorsed by the Indian immigration authorities. This situation may result in the inability of the spouse to continue in a chosen career. Language differences in the host location may also prevent the spouse from entering the workforce even if work permits and visas can be granted. Depending on individual circumstances, dislocation from the workforce may result in long term career implications Remuneration approaches Forty-eight percent of companies across industries use a home-based balance sheet approach for remuneration for long term assignments, while 27 percent use a build-up of salary and allowances, also termed as Local-Plus for long term and permanent one-way assignments. Over 40 percent of companies deliver remuneration in the home currency and 32 percent of companies split remuneration between the home and host currencies. Five percent choose to deliver remuneration via a third-country currency. Twenty-three percent of companies expect that base salary will be changed when an employee is sent on assignment, while 45 percent do not expect base salary to change. Forty-five percent of companies review base salary changes on a case by case basis. The most common remuneration approach for assignees into India from worldwide locations on long term assignments is the balance-sheet approach. The balance sheet approach maintains the individual s salary structure in the home location and provides allowances to assist the individual to continue a similar standard of living to that enjoyed at home. There is a second approach that is applied to: non-indian foreign workers employed locally in India, i.e. China or US citizen returning Indians with western experience who may be employed locally in India Indians who may be foreign residents, who are employed to work in India, on a temporary long term assignment or for an indefinite period of time, largely as a request by the individual and/or mutual agreement with the company The second approach typically applied to the above categories can be summarised as the Local-Plus approach. The Local-Plus philosophy implies a significant change in the individual s status, in particular the employer may be the Indian entity, local compensation and benefits approach applies, with some expatriate allowances (housing and education). These expatriate allowances are transitioned out over a period of time. While companies have trialled this approach on a case-by-case basis, it is often difficult to implement this approach in India due to local compensation and benefits package being lower to what the individuals may be used to. Equity amongst local employees may be an issue if the individual earns more than a local employee in a similar position in a Local Plus approach. Eighty percent of companies link superannuation to the home country, while 10 percent link it to the host location and five percent have other arrangements Cost of Living Allowance (COLA) or Goods and Services Differential (GSD) The traditional COLA is typically used via a build-up or balance sheet. The COLA is paid to compensate the additional cost required to purchase the market basket of goods and services in the host location, e.g. it is the difference between the costs of goods and services in the home and host locations (except housing and utilities). It is designed to maintain the purchasing power of the home location. This allowance will increase, decrease or cease dependent on the exchange rate movement and pricing changes in the home and host locations. This allowance is dependent on salary level and family size and is derived from statistical analysis. The majority of the 57 percent of companies who provide COLA do so for long term assignments. 24 The SIRVA India Mobility Report - Vol. 1, 2012

25 The following base salary compositions are used by companies when calculating COLA: Total remuneration Base salary only Net base salary Gross base salary Fixed remuneration with variable components Percentage of companies Review and adjustments to COLA for long term assignments are as follows: Reason for adjustment Annual review Half-yearly review Quarterly review Ad-hoc review Percentage of Companies 36% 36% 16% 8% Of the companies that review and adjust COLA periodically do so to account for foreign exchange rate fluctuations if it is between +/- 2, 5 and up to 10 percent Remote or Hardship allowance Remote or hardship allowance is provided in recognition that employees have to make some adjustment to difficult conditions in an unfamiliar and remote environment, including isolation, distance from main cities, extreme weather conditions, lack of available amenities and poorly serviced locations, while performing their duties in remote areas. Sixty percent of companies provide a hardship allowance in locations where it is applicable. Companies in the Manufacturing/ Petrochemical and Banking/Financial Services industries are far more likely to provide a hardship allowance than companies in the IT/Telecom industry. Sixty-three percent of companies enlist a Cost of Living provider to determine the amount of hardship allowance applicable to employees, while 26 percent use an internal benchmark, which may be a percentage of the employee s base salary. Sixty-four percent of companies provide the same hardship amount or percentage for all employees, regardless of their home location. Fourteen percent of companies apply a lesser amount of hardship allowance to employees who originally resided in lesser developed countries. The following table provides hardship percentages paid by companies: Location Tier 1 Cities Non Tier 1 Cities Hardship percentages 20-25% 25% The SIRVA India Mobility Report - Vol. 1,

26 2.3.9 International Assignment Premium The International Assignment Premium is an allowance paid to the assignee to encourage acceptance of an overseas assignment. This allowance attempts to acknowledge the difficulties associated with adjusting to another culture, way of living and being separated from family, friends and a familiar environment. Twenty-four percent of companies provide a premium that is equal to 10 percent of an employee s base salary. Four percent of companies apply a premium of 20 percent of an employee s base salary, while 20 percent of companies evaluate the application of an international premium on a case by case basis Incidental or relocation allowance Incidental or relocation allowance is a one-off allowance paid in the host country to cover the cost of miscellaneous items purchased in the host location for long term assignments. The allowance typically contributes towards housing security bond payment, education bond, renewal of driving license, etc. Relocation allowance is provided across all industries, with companies reporting the following approaches to determining the amount or type of assistance provided: Incidental or relocation allowances across all industries - International 10% base salary 20% base salary Not provided Other Various amounts (depending on famly size) Percentage of companies Thirty-two percent of companies provide varying amounts of incidental or relocation allowance, based on family size. Eight percent of companies provide an allowance that is equal to 10 percent of the employee s base salary, and eight percent provide an allowance equal to 20 percent of the base salary. Forty-four percent of companies reported a range of other relocation allowance approaches, which included one-off payments that range from INR 70,000 to INR 560,000. The Manufacturing/Petrochemical sector has the most consistent approach with Banking/Financial Services offering varied and conservative allowances Housing assistance Housing norm Fifty percent pay the full cost of housing at the host location, without deducting a housing norm. Sixteen percent of companies deduct a housing norm and pay the full housing cost at the host location. Seven percent pay the positive differential only. Initial temporary accommodation Initial or temporary housing is described as housing provided on arrival at the new location. Fifty-nine percent of companies provide initial temporary accommodation at the new location for one month across all assignments. Housing allowance Thirty percent of companies engage a cost of living provider to determine the housing allowance, while 25 percent of companies consult a relocation company. Almost a quarter of companies use an internal source to determine housing allowance and the remaining 21 percent use a Real Estate agent. 26 The SIRVA India Mobility Report - Vol. 1, 2012

27 The majority of companies fund the full cost of housing for short term assignments. Twenty-four percent of companies reimburse the actual expenses incurred by an employee for housing costs, while 21 percent of companies provide a capped allowance amount based on family size and 18 percent cap the amount according to the employee s position for long term assignments. Housing rental data, collected in Q1 2012, is provided below across apartments/houses, various levels and dwelling size for a representative selection of Tier 1 cities. (1) Please note : The numerical arrangement in India is founded on sets of two decimal points instead of three. This method of computation brings in dividers into figures in positions suitable to the two-number combination. For instance, the value INR 1,10,000 is read as one lakh and ten thousand rupees. Bangalore All figures in Indian Rupees (INR)/per calendar month Housing type Inexpensive Medium High Apartments 2 BR 20,000-25,000 25,000-30,000 30,000-60,000 3 BR 25,000-30,000 40,000-50,000 50,000-70,000 4 BR 60,000-80,000 80,000-1,50,000 1,50,000 & above 5 BR NA NA NA Houses 2 BR 25,000-35,000 35,000-50,000 50,000 & above 3 BR 50,000-75,000 1,50,000-2,00,000 2,00,000 & above 4 BR 1,10,000-2,00,000 3,00,000-4,00,000 4,00,000 & above 5 BR NA NA 4,00,000 & above Chennai All figures in Indian Rupees (INR)/per calendar month Housing type Inexpensive Medium High Luxury Apartments 2 BR 50,000-75,000 80,000 1,00,000 1,00,000 1,20,000 NA 3 BR 80,000-1,00,000 1,00,000 1,20,000 1,20,000 1,50,000 1,50,000-1,75,000 4 BR 80,000-1,20,000 1,20,000-1,50,000 1,50,000 1,75,000 2,00,000 & above 5 BR NA NA 1,75,000& above 2,00,000 & above Houses 2 BR 50,000-80,000 80,000-1,00,000 NA NA 3 BR 1,00,000-1,25,000 1,25,000-1,50,000 1,50,000-1,75,000 1,75,000-2,00,000 4 BR NA 1,30,000-1,75,000 1,75,000-2,50,000 2,50,000 & above 5 BR NA NA 2,00,000 & above 2,50,000 & above Contributing Sources (1) (IOS Relocation India) - The SIRVA India Mobility Report - Vol. 1,

28 Delhi All figures in Indian Rupees (INR)/per calendar month Housing type Inexpensive Medium High Luxury Apartments 2 BR 35,000-60,000 45,000-80,000 80,000-1,75,000 1,50,000-2,50,000 3 BR 45,000-80,000 80,000-1,50,000 1,25,000-2,50,000 2,00,000-3,00,000 4 BR 1,50,000-2,00,000 2,00,000-2,50,000 2,50,000-3,00,000 4,00,000 & above 5 BR 2,00,000-2,50,000 2,50,000-3,25,000 3,25,000-4,00,000 5,00,000 & above Houses 2 BR NA NA NA NA 3 BR 1,50,000-1,75,000 1,75,000-2,00,000 2,00,000-2,50,000 2,50,000-3,00,000 4 BR 2,00,000-2,50,000 2,50,000-3,00,000 3,00,000-3,50,000 4,00,000 & above 5 BR 2,50,000-3,00,000 3,00,000-3,50,000 3,50,000-4,25,000 6,00,000 & above Hyderabad All figures in Indian Rupees (INR)/per calendar month Housing type Inexpensive Medium High Apartments 2 BR 5,500-6,500 6,500-9,000 9,000-12,000 3 BR 7,000-9,000 9,500-14,000 15,000-20,000 4 BR NA 15,000-20,000 22,000-30,000 Houses/ Villa - Kondapur 2 BR 7,500-10,000 11,000-15,000 15,000-20,000 3 BR 9,000-11,000 15,000-18,000 22,000-28,000 4 BR NA NA 35,000-65,000 Houses/Villa Banjara Hills/Jubilee Hills 2 BR NA NA 25,000-35,000 3 BR 30,000-40,000 35,000-50,000 50,000-65,000 4 BR NA 50,000-70,000 70,000-1,50,000 Kolkata All figures in Indian Rupees (INR)/per calendar month Housing type Inexpensive Medium High Luxury Apartments 2 BR 25,000-35,000 35,000-50,000 50,000-75,000 75,000-1,00,000 3 BR 40,000-55,000 55,000-70,000 70,000-1,00,000 1,00,000-2,00,000 4 BR 50,000-75,000 75,000-1,00,000 1,00,000-2,00,000 2,00,000 & above 5 BR NA NA NA NA 28 The SIRVA India Mobility Report - Vol. 1, 2012

29 Mumbai All figures in Indian Rupees (INR)/per calendar month Housing type Inexpensive Medium High Luxury Apartments South Mumbai 2 BR 3 BR 4 BR 50,000-80,000 1,75,000-2,50,000 2,25,000-3,00,000 80,000 1,20,000 2,50,000-3,00,000 2,75,000-4,00,000 1,20,000 2,00,000 3,00,000-5,00,000 4,00,000-7,00,000 2,00,000-3,00,000 5,00,000-6,00,000 7,00,000-1,20, BR NA NA 4,00,000-9,00,000 9,00,000 & above Apartments North Mumbai 2 BR 35,000-45,000 45,000-70,000 70,000-1,25,000 1,25,000-1,75,000 3 BR 1,75,000-2,50,000 2,50,000-3,00,000 3,00,000-5,00,000 5,00,000-6,00,000 4 BR 5 BR Apartments Central Mumbai 2,25,000-3,00,000 NA 2,75,000-4,00,000 NA 4,00,000-7,00,000 4,00,000-9,00,000 7,00,000-12,00,000 9,00,000 & above 2 BR 25,000-35,000 35,000-40,000 40,000-45,000 NA 3 BR 75,000-1,00,000 1,00,000-2,00,000 2,00,000-3,50,000 3,50,000-4,00,000 4 BR 1,60,000-2,50,000 2,75,000-3,50,000 3,75,000-5,00,000 5,00,000-6,50,000 5 BR 3,25,000-4,25,000 4,25,000-5,00,000 5,00,000-7,00,000 7,00,000-8,00,000 Utilities Housing insights Fifty-five percent of companies, including over 70 percent of companies in the Banking/Financial Services sector, reimburse the actual cost of utilities for employees. Twenty-five percent of companies include utilities reimbursement in the overall housing allowance. Electricity bills can range from INR 5,000 20,000 per month based on actual usage. Air conditioners when used can substantially increase the cost of electricity. Obtaining a rental property in India can be laden with complexities and bureaucracy as one of the most expensive elements in an international assignment package, organisations need to get right. Utilities such as telephone, electricity, internet and cable TV are paid by the tenants. Telephone, internet and cable TV are not necessarily provided by the landlord these items are negotiated with the lease arrangements. Gas is purchased in gas cylinders and refilled. Some locations have piped gas. Water charges are usually the responsibility of the landlords. In addition to the housing allowances, there are a number of variables involved when securing a rental property in India, which inevitably leads to budget blow-outs if unprepared. Many organisations are not aware of these additional costs. The SIRVA India Mobility Report - Vol. 1,

30 The following table displays housing variables for some Tier 1 cities. Cities Security Deposit Stamp Duty/Registration Solicitor s Fees Bangalore 10 months rent Not mandatory INR 10,000-50,000 Chennai 10 months rent 2%, not mandatory INR 10,000-50,000 Delhi 3-12 months rent and Prepayment of rent 3-6 months 2%, not mandatory INR 10,000-50,000 Hyderabad 6-9 months rent Not mandatory INR 10,000-1,00,000 Kolkata 1-6 months rent and Prepayment of rent 11 or 22 or 33 months INR 3,000-9,000 dependent on length of lease INR 10,000-50,000 Mumbai 1-6 months rent and Prepayment of rent 12 or 24 or 36 months INR 5,000-15,000 dependent on length of lease INR 10,000-50,000 While some expatriates ship their furniture, it can also be purchased or rented. If the furniture is rented, it has to be returned at the end of the rental or assignment period. Alternatively, if purchased the expatriate will have to either arrange to sell it or ship to their home country Home leave travel Home leave travel is provided to assignees and their accompanied family on long term assignments to stay connected with their home location. Annual leave is typically taken during this time. Twenty-nine percent of companies provide one home leave trip each year and 19 percent of companies provide two home leave trips each year. Forty percent of companies allow employees to travel anywhere while on home leave trips, but the cost of travel is limited to that of a home/host return fare. Thirty-four percent of companies provide home travel only. Sixty-four percent of companies apply annual leave entitlements as per the home location entitlements, while 23 percent of companies link annual leave to the host location and 14 percent apply the higher of the entitlements for the home or host location Rest and Recreation leave The purpose of Rest and Recreation (R&R) is to allow periodical travel of eligible employees and their accompanied family as a reprieve from locations where conditions are difficult. The eligibility and frequency of R&R is generally determined by the hardship and remoteness of the location from the closest city or R&R destination. Fifty-five percent of companies do not provide R&R entitlements, regardless of location. Forty-five percent of companies provide rest and recreation leave in selected locations that are remote or where there is hardship or danger. Sixty percent of companies reported that the number of days for R&R varies according to location. Seventeen percent of companies provide three days rest and recreation, including travel time. Twelve percent of companies provide seven days R&R, including travel time. Sixty percent of companies provide the travel costs for employees while on leave, while 30 percent of companies cover the cost of accommodation. 30 The SIRVA India Mobility Report - Vol. 1, 2012

31 Private transportation Forty percent of companies recommend that their employees do not drive in the host location, and 24 percent of companies do not allow driving in India, particularly for westerners. Thirty-six percent of companies do not have a policy about employees driving whilst on assignment. Companies that offer some form of transportation have a number of variances in its applicability, such as: Private transportation assistance across all international assignments Car allowance Car and driver Dependent on position Other: local policy, co-contribution Reimbursement of car expenses 22% 26% 10% 22% 2% Education assistance Education for primary, middle and secondary school age children in international schools can be frustrating if not addressed during the planning phase of the relocation. Firstly, due to limited selection of international schools, most cities may only have one or two schools that cater for expatriate needs, and secondly, long waiting lists are in existence especially at the lower grades. Host curriculum (UK, Germany, Japan, etc.) is available in the major cities of Mumbai and New Delhi. All international schools have English as the first language, while assignees can choose a second language for their children from a range of language offerings, i.e. French, German, etc. Host location Education assistance is provided for long term assignments. Sixtythree percent of participants indicate no contribution to dependent children s educational expenses. Of the participants that provide assistance, 21 percent of companies provide a capped contribution and 16 percent provide a reasonable, but uncapped contribution. Home location Twenty-seven percent of companies provide an uncapped reasonable assistance and 18 percent provide assistance that is capped, where assignees preference has been to retain their children at the home location Transportation of household goods, pets and storage All companies pay for employees household goods to be moved to the host location where furnished accommodation is not provided. If fully furnished accommodation is provided, the employee has the option of storing household goods for the duration of the assignment, with the exception of sports cars, wines, antique collections and other luxury items. This policy is standard for long term assignments; however, as relocations increase companies are using the traditional long term policy to modify the permanent one-way moves into India Air freight Thirty-three percent of all companies across industries and assignment types review their assistance for air freight on a case by case basis. Twenty-four percent of companies provide 25-50kg and 21 percent of companies provide 51-70kg. Short term assignees, in particular, have flexible arrangements due to the temporary nature of their assignment, as sea freight is typically not an option Sea freight All companies across industries provide sea freight assistance for long term and permanent one-way assignments, dependent on family size. Of the companies who provide assistance, 75 percent of companies report the provision of boarding fees and 25 percent of companies provide assistance for travel at semester breaks. Single/couple Family 20 foot container 40 foot container The SIRVA India Mobility Report - Vol. 1,

32 Pets Forty-five percent of companies do not provide transportation of pets. Twenty-five percent of companies provide assistance for the transportation of two pets and 15 percent provide transportation for one pet only. Another fifteen percent of companies provide assistance for the transportation of pets on a case by case basis. To ensure safe and successful relocation of pets, the key is to plan ahead and understand the medical, quarantine and immigration regulations for India. The three most common documents that are required for pet relocation to India include a Vaccination Certificate, Veterinary Certificate and a No Objection Certificate in addition to any immigration paperwork Storage and insurance Storage and insurance is provided for long term assignments only. Eighty-six percent of companies pay for the storage and insurance of furniture and household goods at home location. Nine percent of companies provide varying degrees of assistance Home and Education search services While the question on the provision of home and education search was not included, the following benchmark is provided across all industries for long term and permanent one-way assignments: Family Size Single/Couple Family with pre-school and school-aged children Tier 1 / Non Tier 1 Locations 2 day home search 2-3 day home search 1 day each child if different schools Repatriation All companies provide standard support when repatriating employees, similar to relocating employees on assignments, same policies and practices apply in reverse, for example: shipment of household goods and pets, etc. incidental allowance which assists in the purchase of any goods and services on arrival at their home location, typically between 5-10 percent of base pay some companies provide assistance with lease breaks, negotiating timeframe for departure with real estate agents, formalising final payments, facilitating refund of security bond, completion of condition report, handing over the property, etc. Repatriation is one of the most important phases of the assignment process. But due to the fact that it occurs at the conclusion of the official assignment and has no specific timeframe, it is often overlooked. Upon repatriation, the opportunity to assess the success of the assignment will arise. Mismanagement of the process or failure to identify and address repatriation issues may result in the employee becoming disillusioned and subsequently deciding to leave the company. Thirty percent of companies provide a repatriation briefing (also known as reverse cultural transition). Fifty-five percent of companies do not track their employees post-repatriation, with companies from the Banking/Financial Services and Manufacturing/Petrochemical industries more likely than others to track employees. One third of companies believe their rate of attrition two years post-repatriation is higher than 10 percent. Twenty-two percent of companies believe their rate of attrition is 1-5 percent and 11 percent of companies place their rate of attrition at 5-10 percent. Another one third of companies do not have available data to measure the rate of attrition. 32 The SIRVA India Mobility Report - Vol. 1, 2012

33 The following response was reported by participants in relation to elements that they perceive to be important when repatriating employees: Retention Measurement of return on investment Guaranteed job on repatriation Cultural Readjustment Career succession planning Percentage of companies 2.4 Policy elements for domestic assignments Domestic assignments in a formalised approach are relatively new to India and predicted to increase predominantly in Non Tier 1 locations. Growth in business and lack of readily available talent in Non Tier 1 locations has seen the emergence of domestic assignments with the creation of recruitment strategy to attract, recruit, retain and deploy employees whilst also continuing to develop local talent. Hence the drive to research and report on India domestic mobility. The data provides organisations with a benchmark and framework of policy and practices. Policy elements in this section cover domestic short, long and permanent one-way assignments within India Cost projections Cost projection is a standard practice for international assignments. Some companies have reported that a similar approach for domestic moves is being adopted. Total cost of relocation and total employment cost are areas of focus for some companies Orientation Fourteen percent of companies provide a three-day orientation trip, while 28 percent of companies provide a range of orientation trips, including up to five days per employee for long and permanent one-way assignments. Orientation Trips across Tier 1 and Non-Tier 1 - Domestic Case-by-case 5 days 3 days 1 day Banking/ Financial Services IT/Telecom Manufacturing/ Pertrochemical Miscellaneous Percentage of companies The SIRVA India Mobility Report - Vol. 1,

34 2.4.3 Remuneration approaches Remuneration packages for domestic moves across India follow the local remuneration and benefits structures applicable for India across all assignments Remote or Hardship allowance Twenty-six percent of participants provide remote or hardship allowance for all assignment types, all from the Manufacturing/ Petrochemical sector. In some instances, hardship allowance is added to the salary build-up to compensate employees in remote locations. Cost of Living providers are used to determine the hardship allowance Incidental or Relocation allowance One third of companies provide a relocation allowance that is dependent on family size. Seventeen percent of companies provide a relocation allowance that is equal to 10 percent of the employee s base salary. Others use a capped allowance based on family size. Incidental or relocation allowances across all industries - Domestic 10% base salary Not provided Other Various amounts (depending on family size) Percentage of companies Housing assistance Initial temporary accommodation Fifty-nine percent of companies provide initial temporary accommodation at the new location for up to one month across all assignments. Seven percent provide two weeks across all assignments. Rental assistance The majority of companies fund the full cost of housing for short term assignments, via an ongoing payment of rental allowance or a per diem for the duration of the assignment. Fifty-nine percent of companies remunerate employees for long term assignments. Out of the companies that provide assistance, 28 percent reimburse actual expenses, 17 percent provide a capped allowance, 14 percent based on family size and the rest of the companies use a variety of methods, including position of the relocating employee. Eleven percent of companies reimburse the employee for housing costs for permanent one-way assignments where there are no sale and purchase considerations. Out of the companies that provide assistance, 22 percent fund the security deposit and 11 percent fund total rent for an unspecified period. Sixty-one percent of companies determine the housing allowance from internal sources, while the rest of the companies consult a relocation company or use a Real Estate agent. Utilities Seventy-six percent of companies reimburse the actual cost of utilities. Majority of companies include utilities reimbursement in the overall housing allowance. Housing insights Refer to the international section for a detailed overview of the housing insights applicable across many major cities, which are also relevant for domestic assignments. 34 The SIRVA India Mobility Report - Vol. 1, 2012

35 2.4.7 Private transportation The majority of companies provide some form of reimbursement of expenses for private transportation on initial arrival at the new location. In instances, dependent on position, an employee may be entitled to a car or car and driver Education assistance Fifty-seven percent of companies contribute a reasonable, uncapped amount, toward education assistance for dependent children in the host location. Nineteen percent of companies provide a capped amount of assistance Transportation of household goods, pets and storage Air freight The provision of air freight assistance varies on a case by case basis for 31 percent of companies, while three percent provide 0-25kg of air freight and three percent provide 51-70kg of air freight. Short term employees, in particular, have flexible arrangements due to the temporary nature of their assignment Household goods Seventy-two percent of companies provide some form of assistance for the transportation of household goods: Assignment Short term Long term Entitlement Reasonable freight due to the short nature of the assignment Reviewed on case by case basis Reviewed on case by case basis or dependent on family size Household goods only transported, no luxury or large items Permanent one-way Reviewed on case by case basis or dependent on family size Household goods only transported, no luxury or large items Vehicles Twenty-four percent of companies provide assistance for the transportation of one car only Pets Transportation of pets is provided on a case by case basis Storage and insurance Storage is usually not provided. Insurance is provided by companies who support household goods moving Home and Education search services While the question on the provision of home and education search was not included, the following benchmark is provided across all industries for long term and permanent one-way assignments: Family size Single/Couple Tier 1 / Non Tier 1 locations 1 day home search Family with pre-school and school-aged children 2 day home search 1 day each child if different schools The SIRVA India Mobility Report - Vol. 1,

36 Home sale and purchase assistance Permanent one-way assignments The mobility policies and practices for home sale and purchase in India are only just emerging. The demography of India is changing. There is a strong middle class of young Indians with higher education in well-paid jobs, and while the economic activities has had a positive impact on the economy, research indicates that this group of Indians have commenced moving out of home (which is traditionally not the case) to purchase their first property, and are relocating to Non Tier 1 locations where there are better opportunities compared to the main cities. The permanent one-way assignments to Non Tier 1 locations will be dominant and sale and purchase of houses will become the new norm in domestic relocations. Using the following benchmark data, companies can start to consider an appropriate framework relevant to their line of business. The following details on policy elements will assist in considering an approach for home sale and purchase: Housing valuation Housing valuation is used to establish a sale price range, which determines home sale and purchase benefit. Housing valuation is derived from various sources. Forty percent of companies provide assistance to determine the housing value for sale or purchase. Housing valuations are conducted through Real Estate agents or Real Estate Valuers. Intention to sell or purchase Twenty percent of companies require the employee to advise of intention to sell or purchase a home within three months of the transfer date. Twenty percent reported that there is no specified period for the advice to be given by an employee. The sale of an employee s home must be completed within 12 months of the notification to move in order to receive assistance. Assistance provided for sale and purchase For those companies that provide assistance for sale and purchase, all transaction costs for sale and purchase are reimbursed on production of receipts, e.g. mortgage establishment fees, legal, real estate fees, registration, stamp duty and government fees. 36 The SIRVA India Mobility Report - Vol. 1, 2012

37 3. Assignment Management The majority of the companies researched are headquartered outside India, therefore the assignment management models are typically formulated at the headquarter location. Of the participating companies, 52 percent report managing all services in-house, 30 percent to relocation companies, 15 percent to the Big Four Deloitte, Ernst & Young, KPMG or PricewaterhouseCoopers and the remainder are serviced inhouse across all assignment types. Taxation, Visa and Immigration and Destination services are outsourced to companies with subject matter expertise. Vendor management, payroll and international compensation services are serviced in house as shown in the graph below. Assignment Management Global Mobility - Policy Development Taxation Visa and Immigration International compensation sevices Payroll services In-House Outsourced to Big 4 Outsourced to other Outsourced to Relocation Company Destination Services Vendor management Percentage of companies Over the next two years, 18 percent of companies believe they will have to change their approach to managing assignments as the volume of employee moves increases to address cost minimisation, development of a consistent policy and the implementation of a preferred supplier arrangement to outsource management of assignments. The SIRVA India Mobility Report - Vol. 1,

38 The following policy and practice for all assignment types are likely to change over the next two years as reported by participants across all industries: Permanant One-way Policy Long Term Policy Short Term Policy Introduction of Localisation Policy Processes to support policy changes International Domestic Partner Career Support Mandatory Cross-Cultural Programs Cultural Adaptability Assessment Assignment Management Percentage of companies 38 The SIRVA India Mobility Report - Vol. 1, 2012

39 4. HR and Mobility Challenges The top five challenges in managing an expatriate internationaland domestic program as reported by participating companies are: 1. Increasing cost of assignments 2. Managing repatriations to ensure reintegration and security of job at home 3. Measuring return on investment 4. Appropriateness of policy and practices in the changing India environment 5. Establishing mobility infrastructure in new locations The following table summarises the verbatim comments from companies : Cost Policies and practices Cost effective assignments Cost containment Compensation cost escalation Establish footprint in new locations Linkage of assignment drivers to appropriate policy level Assignment benefits Double taxation Rationalisation requirement for a few benefits which were substantially above the market Talent growth and development Attracting professional talent to remote locations of India Retention of talent Succession Planning Monitoring development of candidates who have participated in international mobility Housing Prompt identification of suitable housing Housing Management of assignments Cost and supplier scalability Recording and tracking movements both short and long term Outsourcing of compensation services Managing immigration and compliance Shipment delays Repatriation Managing repatriations Repatriating assignees to a role in the home country Reintegration The SIRVA India Mobility Report - Vol. 1,

40 5. Acknowledgements SIRVA Relocation acknowledges the outstanding contribution comprising of some of the best practitioners in the industry today: Julia Radchenko Julia Radchenko is International HR Manager for Australia, responsible for providing international HR and compensation services to clients. Julia worked closely on international and domestic HR policies and practices research for the second volume of the China Mobility Report, and is currently involved in similar research projects for Australia and India. Julia provides consulting advice and assistance to clients, including international compensation, analysis of cost of living data, cross-cultural support, policies and practices benchmarking and development. She also manages the Mercer s ORC mobility products for clients in Australia. Prior to joining SIRVA, Julia had six years of HR generalist, compensation and consulting experience, having worked internationally with various consulting firms. She has a degree in Social Psychology (with Honours) and is currently completing a Graduate Diploma of Business in Human Resources Management. Nithya Abraham Nithya Abraham is an International HR Analyst who specialises in international compensation and benefits within global mobility. She is responsible for providing International HR and compensation services, consulting advice and cross-cultural support to SIRVA clients. As SIRVA Australia is the representative for Mercer s ORC mobility products, Nithya also manages and services those clients. Nithya has closely worked on international and domestic HR policies and was involved extensively in the research for the first volume of SIRVA s India Mobility Report. Prior to working at SIRVA, Nithya has worked at IBM as compensation and benefits analyst and has a number of years experience in superannuation and customer service industries. She has a degree in Science and a Diploma in Business specialising in Human Resources Management. She has an analytical mind set, a passion for numbers and finds challenges irresistible. 40 The SIRVA India Mobility Report - Vol. 1, 2012

41 6. About the Research Leader L orraine Jennings Senior Manager, IHR Consulting Services Asia Pacific & Middle East SIRVA Relocation Lorraine Jennings is an International Human Resource expert who specialises in global mobility and organisational and cultural diversity. Her passion as a practitioner is to challenge traditional thinking and prepare organisations for 21st century global mobility challenges. In her position as senior regional manager of IHR Consulting Services and as a member of SIRVA s Global Consulting Team, Lorraine is based in Melbourne and supports the strategic deliverables for international HR advisory through thought leadership and client-driven consulting across Asia Pacific. Lorraine leads SIRVA s major research project aimed at creating policy and practices benchmarks for corporate HR practitioners in the Asia Pacific region. Lorraine also leads cross-cultural and intercultural management programs and is responsible for continued development of these offerings. With over 15 years experience in global human resources, Lorraine has worked in senior HR roles in multinational organisations that include BP-Amoco, Boeing, Deloitte, Western Mining and TRUenergy. She has been instrumental is modelling change management initiatives through the implementation of sustainable, cost-effective, integrated and outsourced global mobility models for a number of large corporations. Lorraine has also been responsible for leading HR initiatives including Competency/Skills Matrix Framework for business and technical professionals, facilitating 360-degree feedback, succession planning and career/personal development. Lorraine s expertise extends to global mobility infrastructure benchmarking and development, employment benefits, HR audits/due diligence, driving service excellence through practical and systematic business improvement across various outsourcing solutions. She has served blue chip clients such as AXA, BHP Billiton, Citigroup, Commonwealth Bank Australia, Foster s Brewing Group, National Australia Bank, Orica, PETRONAS, Santos and Shell. Lorraine is a featured speaker at events organised by the American Chamber of Commerce Beijing and Shanghai, Australian Human Resources Institute, National Foreign Trade Council IHR Forum (US), the Singapore Human Resources Institute, SIRVA University (US) and various other HR forums across the Asia Pacific region. Lorraine has been published in HR Monthly, an Australian Human Resources Institute publication, and also by the Singapore Human Resources Institute among other mobility magazines globally. Lorraine has a Business Degree with a major in HR and a Post- Graduate Diploma of Business (HR Management). She has lived and worked in the Asia Pacific region and can speak several languages. She is a member of the Australian Human Resources Institute and the Australian Relocation Network. The SIRVA India Mobility Report - Vol. 1,

42

43 Section B The SIRVA India Mobility Report Volume 1, 2012 The SIRVA India Mobility research has enabled detailed reports for each of the ten industries against Tier 1 and Non-Tier 1 cities, international and domestic assignments, consolidated into Banking/Financial, IT/Telecom, Manufacturing/Petrochemical and Miscellaneous. The detailed reports serve as an industry benchmark which assists businesses to compare their mobility policies and practices, across all major industries, as well as specifically against any of the four individual industry sectors; and position themselves in a structured way to ensure a sustainable and competitive mobility framework. Please note that the data is reported separately for international and domestic assignments where applicable.

44 1. About the SIRVA India Mobility Report Key drivers of the research SIRVA Relocation undertook the India Mobility research for a number of reasons: Lack of readily available benchmark data and trends on mobility policy and practices for international and domestic assignments in India Shortage of skills in growth areas and expansion of Non Tier 1 cities will require the deployment of people into Tier 1, and particularly into Non Tier 1 locations Critical benchmark data to create competitive remuneration strategies vital for attracting, recruiting and retaining employees. The objectives of the SIRVA India Mobility Report Provide benchmark comparative data on international and domestic mobility policy and assignment management practices differentiated according to: o Key assignment types o Variances in entitlement between Tier 1 and Non Tier 1 locations o Industry sectors Provide HR professionals with an elementary framework with which to stay current, and track changes in, mobility policy components for Tier 1 and Non Tier 1 locations across multiple industry sectors Better understand variances in assignment types and policy applications Enable a further exploration of emerging policy trends and administration practices Challenge traditional thinking versus flexible and fit for purpose policy Enable HR professionals to seek out alternative approaches to policy for Tier 1 and Non Tier 1 locations and identify potential strategies for more effectively managing cost and assignments Understand critical HR and mobility challenges faced by companies in India Provide biennial updates Key features of the SIRVA India Mobility Report The SIRVA India Mobility Report is a framework that provides policy and practices benchmark incorporating the following core elements: International assignments into India and domestic assignments within India for the following move types: o Short term (up to 12 months) o Long term (up to five years) o Permanent one way moves Assignment policies in India is further differentiated according to whether the location is a Tier 1 or Non Tier 1 location The benchmark data is published in one overall report, under section A, inclusive of four separate industry sector reports, under section B. Methodology of the research The SIRVA India Mobility Report was created by SIRVA Relocation and comprises more than 100 questions that were completed online, directly relating to mobility policy elements and the assignment management process. Twenty-two companies participated across 10 industry sectors that were combined to form four industry types to preserve the confidentiality of companies where three or less responded for a single industry. The industries represented are Banking, Financial Services, IT, Telecom, Manufacturing, Petrochemical, Agriculture, Pharmaceutical, Professional Services and Publishing. 44 The SIRVA India Mobility Report - Vol. 1, 2012

45 2. Participants of the Research Named in alphabetical order: Alliance Bernstein L.P. ANZ Support Services India Pty Ltd Bayer Crop Science Ltd BP India Services Private Limited Citibank HSBC IBM India Insurance Australia Group Intel Technology India Private Limited Logica The McGraw-Hill Companies Morgan Stanley National Australia Bank Limited PepsiCo India Reckitt Benckiser Sasol Synfuels International India SMEC Holding Ltd SPX Corporation SunGard TESCO Hindustan Service Centre Pty Ltd Tyco Electronics Corporation UBS The SIRVA India Mobility Report - Vol. 1,

46 3. Industry Reports Miscellaneous 18% Banking / Financial Services 36% Manufacturing / Petrochemical 23% IT/Telecom 23% 46 The SIRVA India Mobility Report - Vol. 1, 2012

47 Banking/Financial Services Eight companies participated. International assignments Seven companies reported international relocation assignments. All seven companies reported presence in Tier 1 locations. No companies reported presence in Non Tier 1 locations. Domestic assignments Two companies reported domestic relocation assignments. Two companies reported presence in Tier 1 locations. One company reported presence in Non Tier 1 locations. Minimum of three companies are required for reporting purposes and to maintain the confidentiality of participants. Please Note: Data for domestic assignments cannot be reported as less than three responses were received. The SIRVA India Mobility Report - Vol. 1,

48 International Banking / Financial Services Policy Components Tier 1 Short Term Long Term Permanant One Way Home countries of assignees Host locations in India Australia, Hong Kong, Hungary, Japan, New Zealand, Singapore, Taiwan, Switzerland, United Kingdom and United States Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi and Ranchi Cost projections - All companies complete cost projections - Five companies calculate projections for the total employment cost (which includes taxable components) - Four companies project the total cost of relocation, including travel, relocation services, transportation of household goods and storage - Two companies project the cost of salary and allowances - Two companies project the cost of relocation services - including home/education search, orientation and cross-cultural briefing Orientation - Not provided - One company provides a three day orientation - Two companies provide a five-day orientation - Two companies provide a seven-day orientation - One company provides a 10-day orientation for families with two or more people - One company review the need for orientation visits on a case by case basis - One company provides a 10-day orientation for families with two or more people - One company reviews the need for orientation visits on a case by case basis Cross-cultural transition program - Out of seven companies, three conduct candidate and family cultural adaptability assessments - Three companies engage external consultants to deliver cross-cultural training face-to -face and two companies provide online learning - For two companies out of these five, attendance at cross-cultural training is mandatory - One of the companies provides the cross-cultural training on arrival in the host location, while four companies provide training prior to departure 48 The SIRVA India Mobility Report - Vol. 1, 2012

49 International Banking / Financial Services Tier 1 Policy Components Cross-cultural transition program (cont d) Short Term Long Term Permanant One Way - Out of seven companies, two companies provide career planning and mentoring programs for international assignees - Two companies provide a security briefing for international assignees by external security specialist firms and three companies conduct security briefings in-house Language training - One company provides 40 hours of language training per individual, while one company provides ongoing language training support Partner Career Support - Not provided - One company provides a Career Assistance program - Three companies provide a lump sum payment for career assistance Remuneration Remuneration approach - Seven companies use a build-up of salary and allowances Remuneration approach - Seven companies use a home based balance sheet Remuneration approach - Four companies use a Local Plus (Host Plus) approach to remuneration Determination of base salary - Six companies link assignees base salary with their home salary - One company aligns base salary with the home country if the country they are travelling to is a lower paid country. If they are travelling to a higher paid country, then base salary is linked to the host salary Determination of base salary - Companies determine the base salary on case by case basis - Five companies do not expect the base salary to be changed when sending their employees on assignment - Two companies determine whether base salary will be changed on a case by case basis Delivery of remuneration - Three companies deliver remuneration using home currency, two companies use host currency and two companies split remuneration between home and host currency - All companies report that superannuation and/or pension for international assignments is linked to the home location Delivery of remuneration - All companies reported that they deliver remuneration in their host currency for permanent one way assignments The SIRVA India Mobility Report - Vol. 1,

50 International Banking / Financial Services Policy Components Tier 1 Short Term Long Term Permanant One Way Cost of Living Allowance (Goods and Services Differential) - Out of seven companies, only two provide a cost of living allowance Calculation of Cost of Living Allowance - Seven companies provide a cost of living allowance Calculation of Cost of Living Allowance - Not provided Calculation of Cost of Living Allowance - Not reported - One company uses a fixed remuneration with variable components (i.e. incentives and bonuses) to calculate the cost of living allowance - Not reported - Four companies calculate the allowance based on net base salary (excluding taxes) - One company calculates the cost of living allowance using the gross base salary (taxes included) - One company calculates the allowance based on goods and services spend in the home location compared with the cost of the same services in the host location - Four companies apply a modified index (removing certain elements so as not to overcompensate for items that are paid for separately) - Three companies do not have a defined policy and evaluate the need for a modified index on a case by case basis 50 The SIRVA India Mobility Report - Vol. 1, 2012

51 International Banking / Financial Services Policy Components Tier 1 Short Term Long Term Permanant One Way Cost of Living Allowance (Goods and Services Differential) (cont d) Review of Cost of Living Allowance - Two companies review and adjust the cost of living allowances annually; three review half-yearly while another two companies review the allowances quarterly - Three companies review exchange rate fluctuations on a quarterly basis, two reviews annually and two review half-yearly - One company makes an adjustment quarterly if the difference is +/- 2% - Three companies adjust the exchange rate and cost of living allowance if the difference is more than 5% - Two companies do not adjust the exchange rate outside the cost of living review, while one company reviews it on a case by case basis Remote or Hardship allowance - Not provided - Six companies provide hardship allowance Source of Hardship allowance - All companies calculate the allowance using a Cost of Living provider Approach to Hardship allowance - Six companies apply the same hardship amount/ percentage regardless of the assignee s home location - One company applies a lesser hardship amount/ percentage for assignees from less developed countries - Not provided The SIRVA India Mobility Report - Vol. 1,

52 International Banking / Financial Services Policy Components Tier 1 Short Term Long Term Permanant One Way International assignment premium - Not reported - Two companies apply an international assignment premium of 10% - One company applies a 20% premium Please note for Permanent One Way assignment, premium may be added as a part of build-up or local plus package Incidental or Relocation Allowance - Not provided - One company provides an allowance of 3% of the home base salary - One company provides an incidental or relocation allowance of 10% - Other reported amounts include: USD 5000, USD 9000 and USD10, 300 Housing assistance Application of housing assistance: - Five companies pay the full housing cost at the host location Determination of housing allowances: Application of housing assistance: - Three companies pay the full housing cost at the host location, without applying a housing norm deduction (in the home location) Initial Accommodation: Five companies provide unspecified initial temporary accommodation at the new location - Five companies reimburse the actual expenses associated with housing costs - Two companies use a Cost of Living provider to determine the housing allowance - Two companies use an internal source to calculate the allowance - Four companies deduct the housing norm (at home) and pay the cost of housing at the host location Determination of housing allowances: - Three companies use a Cost of Living provider to determine the housing allowance - Two companies use a Real Estate consultant - Three companies use a Relocation company. - One company uses an internal source to calculate the allowance 52 The SIRVA India Mobility Report - Vol. 1, 2012

53 International Banking / Financial Services Policy Components Housing assistance (cont d) Tier 1 Short Term Long Term Permanant One Way - Two companies use a Real Estate consultant - Two companies use a Relocation company Utility cost: - Five companies reimburse the actual cost of utility - Three companies provide a capped amount based on family size and position - One company includes utility reimbursements in its housing allowance Home Leave travel - Not provided - Six companies provide one trip home each year - Five companies provide travel to the home location only - Two companies provide travel anywhere, but the cost is limited to that of the return fare to the home location - Not provided Rest and Recreation leave (R&R leave) - One company provides rest and recreation leave in selected locations, where there is hardship, remoteness or danger present - Five companies provide rest and recreation leave in selected locations, where there is hardship, remoteness or danger present - Not provided Duration: - One company provides three to seven days leave, including travel time Duration: - Two companies provide three to seven days leave, including travel time - Three companies leave entitlements vary according to location The SIRVA India Mobility Report - Vol. 1,

54 International Banking / Financial Services Policy Components Tier 1 Short Term Long Term Permanant One Way Rest and Recreation leave (R&R leave) (cont d) Cost: - Five companies cover the travel costs associated with rest and recreation leave - Three companies cover the accommodation costs Private transportation - Two companies provide a car and driver - Three companies provide a car and driver - Not provided - Two companies provide private transportation depending on the assignee s position - One company provides private transportation depending on the assignee s position - One company provides a shared car for all assignees - One company provides a car lease and driver if it is considered essential, although this is not part of the standard policy - Four companies recommend that assignees do not drive in the host location - Two companies do not allow assignees to drive in the host location Education assistance - Not provided Education assistance at host location: - Seven companies provide education assistance in the form of tuition fees - Three companies cover the cost of textbooks, stationery and uniforms - Not provided - Three companies cover the cost of transportation 54 The SIRVA India Mobility Report - Vol. 1, 2012

55 International Banking / Financial Services Policy Components Tier 1 Short Term Long Term Permanant One Way Education assistance (cont d) - One company provides assistance for extra curricular activities Education assistance at home location: - Three companies provide a capped amount of education assistance for dependant children in the home location (if they choose to stay in home location) - Two companies provide a reasonable amount of assistance, not a capped amount - Five companies provide assistance for boarding fees and one company provides assistance for travel at semester breaks Transportation of household goods, pets and storage Air freight: - One company provides 0-25kg air freight Air freight: - Two companies provide 25-50kg of air freight Air freight: - One company provides 25-50kg of air freight - Two companies provide 25-50kg of air freight - Two companies provide 51-70kg of air freight - One company provides 51-70kg of air freight - One company provides 51-70kg of air freight - One company provides air freight assistance on a case by case basis - Two companies provide air freight assistance on a case by case basis - Two companies provide air freight assistance on a case by case basis Transportation of cars: - Not provided Transportation of household goods Single: 20 ft container Family: 40 ft container Transportation of household goods Single: 20 ft container Family: 40 ft container Transportation of cars: - One company provides assistance for the transportation of one car Transportation of cars: - One company provides assistance for the transportation of one car The SIRVA India Mobility Report - Vol. 1,

56 International Banking / Financial Services Policy Components Transportation of household goods, pets and storage (cont d) Tier 1 Short Term Long Term Permanant One Way Storage and insurance of household goods: - Seven companies pay for the storage and insurance of furniture and household goods Transportation of pets: - Not provided Transportation of pets: - Three companies provide assistance for the transportation of two pets - Two companies provide assistance for the transportation of one pet Repatriation - Not provided Generally companies provide - Not provided standard support when repatriating employees: - Shipment of household goods and pets, etc - Incidental allowance which assists in the purchase of any goods and services on arrival at their home location, typically between 5-10 percent of base pay - Assistance with lease breaks, negotiating timeframe for departure with real estate agents, formalising final payments, facilitating refund of security bond, completion of condition report, handing over the property Perception of Repatriation - Seven companies believe that retention of employees is important in the repatriation of employees 56 The SIRVA India Mobility Report - Vol. 1, 2012

57 International Banking / Financial Services Policy Components Tier 1 Short Term Long Term Permanant One Way Repatriation (cont d) - Six companies believe that career/succession planning is important - Three believe that measurement of the return on investment in important when it comes to repatriation - Two companies reported that cultural readjustment is important - Two reported that guaranteed job on repatriation is important Post-repatriation attrition - Four companies track their assignees postrepatriation, while three do not - Two companies reported that the rate of attrition post-repatriation is around 10% The SIRVA India Mobility Report - Vol. 1,

58 IT/Telecom Five companies participated. International assignments Five companies reported international relocation assignments. Four companies reported presence in Tier 1 locations. Two companies reported presence in Non Tier 1 locations. Domestic assignments Three companies reported domestic relocation assignments. Three companies reported presence in Tier 1 locations. No companies reported presence in Non Tier 1 locations Minimum of three companies are required for reporting purposes and to maintain confidentiality of participants. Please Note: Data for International Non Tier 1 assignments cannot be reported as less than three responses were received. 58 The SIRVA India Mobility Report - Vol. 1, 2012

59 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Home countries of assignees Czech Republic, France, Israel, Japan, Korea, Netherlands, Sweden, United Kingdom, United States Host locations in India Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi Cost projections All companies complete a cost projection prior to relocation The cost projection for all reported companies include the total employment cost which consists of the following elements: - relocation services - home/education search - orientation - cross-cultural briefing - salaries and allowances - travel - transportation of household goods - storage - taxable components Orientation - One company provides a one-day orientation trip for assignees - Two companies provide a five-day orientation trip for assignees - Two companies provides a five-day orientation trip - One company provides a one-day orientation trip for assignees Cross-cultural transition program - Three companies conduct candidate/family cultural adaptability assessments - Three companies provide a cross-cultural transition program, two companies also provide a library of information and online learning - For those companies that provide cross-cultural transition programs, two require compulsory attendance The SIRVA India Mobility Report - Vol. 1,

60 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Cross-cultural transition program (cont d) - Two companies deliver the cross-cultural training program prior to assignee s departure, one company provides training on arrival and one company delivers the program in both the home and host locations - One company provides security training delivered by an external security specialist firm while one company provides security training through a relocation company Language training - Language training is provided between 20 to 40 hours - One company also provides ongoing language training support Partner career support - Not provided - Two companies provide a lump sum amount for partner support - One company provides a Career Assistance Program Remuneration Remuneration approach - Four companies use a remuneration approach that comprises a build up of salary and allowances Remuneration approach - Four companies use a home based balance sheet remuneration approach Remuneration approach - Two companies use a Local Plus (Host Plus) remuneration approach Determination of base salary - Four companies link the base salary for international assignees to the home salary - One company links the base salary to a global reference salary - One company expects base salary to be changed when sending their employees on assignment - Two companies determine whether base salary will be changed on a case by case basis Delivery of remuneration - Three companies deliver remuneration for international assignees in their home currency while one company delivers remuneration in a split between home and host currency Determination of base salary - Companies determine the base salary on case by case basis Delivery of remuneration - All companies reported that they deliver remuneration in their host currency for permanent one way assignments - Four companies link superannuation to the home location, while one company links it to either the home or host location depending on assignment type 60 The SIRVA India Mobility Report - Vol. 1, 2012

61 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Cost of Living Allowance (Goods and Services Differential) - Out of four companies only one company provides a Cost of Living Allowance for international shortterm assignments - Four companies provide a Cost of Living Allowance for international assignments Calculation of Cost of Living Allowance - Three companies calculate the Cost of Living allowance using the gross base salary (including taxes) - Two companies reported not providing Cost of living Allowance - One company bases the allowance on net base salary (excluding taxes) - Three companies use a modified index to remove certain elements so assignees are not overcompensated for items paid separately Review of Cost of Living Allowance - Three companies review and adjust the cost of living allowances halfyearly; one company reviews annually - Three companies review exchange rate fluctuations half-yearly and one company review quarterly - Two companies adjust exchange rate and cost of living allowances if the difference is more than 10%, while one company makes adjustments if the difference is more than 5% The SIRVA India Mobility Report - Vol. 1,

62 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Remote or Hardship allowance - Out of four companies, two pay a hardship allowance - Out of four companies, two pay a hardship allowance - Not reported Source of Hardship allowance - One company uses a Cost of Living provider to calculate the hardship allowance while one company uses third party provider analysis and inputs - Not provided Approach to hardship allowance - Two companies provide the same hardship amount/ percentage regardless of the home location - One company reviews the hardship allowances on a case by case basis - One company calculates the hardship allowance based on the home and host locations International assignment premium - Not reported - Two companies review the need for a premium on a case by case basis - Two companies do not pay an international assignment premium Please note for Permanent one way the international assignment premium may be added as a part of build-up or local plus package Incidental or Relocation Allowance - Not reported - Two companies provide varying amounts depending on family size - One company provides an allowance equal to one months gross salary - One company provides a relocation allowance on a case by case basis 62 The SIRVA India Mobility Report - Vol. 1, 2012

63 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Housing Assistance Application of housing assistance: - Three companies pay the full cost of housing at the host location - Two companies compensate housing as a capped amount based on family size and position while one company reimburses the actual cost of housing Determination of housing allowances: - Three companies determine the housing allowances using Cost of Living providers, while one company uses internal sources - Two companies use Real Estate consultants to determine housing allowances - Two companies use a relocation company to determine housing allowances Application of housing assistance: - Three companies pay the full cost of housing at the host location, without a deduction of the housing norm at home while one company applies a housing deduction for long term assignments - Two companies compensate housing as a capped amount based on family size and position while one company compensates housing as a fixed percentage of the base salary Determination of housing allowances: - Three companies determine the housing allowance using Cost of Living providers, while one company uses internal sources - Two companies use Real Estate consultants to determine housing allowances Initial accommodation: - Two companies provide initial temporary accommodation - Two companies use a relocation company to determine housing allowances Utility cost: - Three companies reimburse the actual cost of utility while one company include utility reimbursements in its housing allowance The SIRVA India Mobility Report - Vol. 1,

64 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Home Leave Travel - One company provides a home trip once in three months, but this is flexible - One company allocates one trip home for each assignment per year while another company allocates two trips - Not provided - One company allocates five business days of leave after every eight weeks of completed service - Two companies provide travel anywhere, but the cost is limited to the home/host return fare - Two companies provide home travel only Rest and Recreation leave (R&R leave) - Three companies provide rest and recreation entitlements in selected locations affected by remoteness, hardship or danger - Three companies provide rest and recreation entitlements in selected locations affected by remoteness, hardship, or danger - Not provided Duration: - One company provides three to five days for R&R trips, including travel time - Two companies vary R&R leave depending on location Duration: - Two companies provide five days for R&R, including travel time while one company varies R&R leave depending on location Cost: - Two companies cover the cost of travel for assignees while they are on R&R leave while one company covers the cost accommodation - One company has a fixed allowance and one company pays for items applicable during the leave 64 The SIRVA India Mobility Report - Vol. 1, 2012

65 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Private transportation - Two companies provide a car allowance - Two companies provide a car and driver - Two companies provide a car allowance - Two companies provide a car and driver - One company provides a car and driver - One company provides private transportation as a benefit - Three companies recommend that assignees do not drive in the host location Education assistance - Not provided Education assistance at host location: - Four companies provide education assistance for tuition fees only - Two companies provide assistance for textbooks, stationery and uniforms Education assistance at host location: - Companies provide a reasonable, but uncapped, amount of education assistance in the host location - One company covers the cost of transportation Education assistance at home location: - Three companies contribute a reasonable, but uncapped amount of financial assistance for dependent children s education expenses in the home location - Two companies provide assistance with boarding fees - Two companies provide assistance with travel at semester breaks The SIRVA India Mobility Report - Vol. 1,

66 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Transportation of household goods, pets and storage Air freight: - One company provides 51-70kg of air freight - Three companies provide varying types of air freight assistance on a case by case basis Air freight: - One company provides 51-70kg of air freight - Three companies provide varying types of air freight assistance on a case by case basis Transportation of household goods: - Single: 20 ft container - Family: 40 ft container Air freight: - Two companies provide varying types of air freight assistance on a case by case basis Transportation of household goods: - Single: 20 ft container - Family: 40 ft container Transportation of cars: - Not provided Transportation of cars: - One company provides assistance for a maximum of two cars Transportation of cars: - Not provided Storage and insurance of household goods: - Three companies pay for the storage and insurance of furniture and household goods - One company pays for insurance, but only pays for storage depending on employee level Transportation of pets: - Not provided Transportation of pets: - One company pays for the transportation only for two pets - Two companies provide assistance for the transportation of pets on a case by case basis Repatriation - Not provided Generally companies provide - Not provided standard support when repatriating employees: - Shipment of household goods and pets, etc. - Incidental allowance which assists in the purchase of any goods and services on arrival at their home location - typically between 5-10 percent of base pay 66 The SIRVA India Mobility Report - Vol. 1, 2012

67 International IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Repatriation (cont d) - Assistance with lease breaks, negotiating timeframe for departure with real estate agents, formalising final payments, facilitating refund of security bond, completion of condition report, handing over the property, etc. Perception of Repatriation - Four companies perceive career /succession planning as important in the repatriation of employees - Four believe retention is important and three believe that cultural readjustment is important - Three companies also believe that a guaranteed job on repatriation is important - One company believes the measurement of return on investment to be important - One company believes that it is important that its values are followed Post-repatriation attrition - Two companies track their assignees post-repatriation and two do not - One company reported that its rate of attrition two years post-repatriation is 1-5% - Two companies provide a career planning or mentoring program for international assignees The SIRVA India Mobility Report - Vol. 1,

68 Domestic IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Home locations of assignees - Bangalore, Chennai, Gandhinagar, Hyderabad, Kolkata, Mumbai, New Delhi, Panjim, Patna - Not reported Host locations in India - Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi - Not reported Cost projections - Three companies complete a cost projection prior to relocation - Three companies include relocation services (including home/education search, orientation and cross-cultural briefing) in the cost projection - Three companies include salaries and allowances - Three companies include the total cost of relocation (including travel, relocation services, transportation of household goods and storage) - Five companies include the total employment cost - Not reported Orientation - One company provides an orientation visit - One company provides an orientation visit - Not reported Partner Career Support - Not provided - Not provided - Not reported Remuneration - Local Salary package - Local Salary package - Not reported Remote or Hardship allowance - Not provided - Not provided - Not reported 68 The SIRVA India Mobility Report - Vol. 1, 2012

69 Domestic IT/Telecom Policy Components Tier 1 Short Term Long Term Permanant One Way Incidental or Relocation Allowance - Not provided - Two companies provide a relocation allowance on a case by case basis (based on family size, position) - Not reported Housing assistance Application of housing assistance: - One company pays the full cost of housing at the host location Determination of housing allowances: - One company uses an internal source to determine housing allowances - One company uses Real Estate consultants to determine housing allowances - One company uses a relocation company to determine housing allowances Application of housing assistance: - Not provided Determination of housing allowances: - One company uses Real Estate consultants to determine housing allowances - One company uses a relocation company to determine housing allowances Utility Cost - Two companies reimburse the actual amount of utilities - One company includes utility reimbursement as part of the housing allowance - Not reported Initial Accommodation - One company provides initial temporary accommodation at the new location from two weeks to one month - One company provides unspecified temporary accommodation at the new location The SIRVA India Mobility Report - Vol. 1,

70 Domestic IT/Telecom Tier 1 Policy Components Short Term Long Term Permanant One Way Private transportation - One company reimburses the cost of taxis and leased cars - One company reimburses the cost of taxis and leased cars - Not reported Education assistance - Not provided - Two companies provide a reasonable, but uncapped, amount of education assistance for dependent children in the host location - Not reported Transportation of household goods, pets and storage Air freight: - Three companies provide unspecified air freight Air freight: - Two companies provide unspecified air freight - Not reported Transportation of cars: - Not provided Transportation of cars: - One company provides assistance for the transportation of one car Transportation of pets - Not provided Transportation of pets - One company provides assistance for the transportation of pets on a case by case basis - Not reported 70 The SIRVA India Mobility Report - Vol. 1, 2012

71 Manufacturing/Petrochemical Five companies participated. International assignments Five companies reported international relocation assignments. All five companies reported presence in Tier 1 locations. Three companies reported presence in Non Tier 1 locations Domestic assignments Two companies reported domestic relocation assignments. Two companies reported presence in Tier 1 locations. Two companies reported presence in Non Tier 1 locations. Minimum of three companies are required for reporting purposes and to maintain the confidentiality of participants. Please Note: Data for International Non Tier 1 assignments cannot be reported as less than three responses were received. The SIRVA India Mobility Report - Vol. 1,

72 International Manufacturing/ Petrochemical Policy Components Home countries of assignees Tier 1 Short Term Long Term Permanant One Way - Belgium, China, Japan, Hong Kong, Germany, Netherlands, South Africa, Thailand, United States, United Kingdom Host locations in India - Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi Cost projections - All companies complete a cost projection prior to relocation - One company includes relocation services (home and education search, orientation and cross-cultural briefing) in the projections - One company includes salary and allowances and one company includes the total cost of relocation (including travel, relocation services, transportation of household goods, storage etc.) - All companies include the total employment cost in cost projections, including all of the elements previously mentioned plus taxable components Orientation - One company provides a three-day orientation visit - One company provides a seven-day orientation visit - Four companies provide a seven-day orientation visit - One company provides an orientation visit of up to five days - Not reported Cross-cultural transition program - Three companies conduct candidate and family cultural adaptability assessments - All companies engage external consultants to deliver a cross-cultural transition program - Four companies require mandatory attendance at cross-cultural transition programs - Three companies provide the cross-cultural program prior to departure - Two companies provide the cross-cultural program upon arrival at the host location Language training - Four companies provide ongoing language support and one company provides 40 hours of language training per individual 72 The SIRVA India Mobility Report - Vol. 1, 2012

73 International Manufacturing/ Petrochemical Policy Components Partner career support Tier 1 Short Term Long Term Permanant One Way - Two companies provide a lump sum payment for partner support. - One company provides a percentage of the assignee s salary for partner support - One company provides a Career Assistance program while one company provides reimbursement of eligible expenses Remuneration Remuneration approach - Three companies use a remuneration approach that comprises of build-up of salaries and allowances Remuneration approach - Four companies use a home based balance sheet approach for remuneration while one company uses a Local Plus (Host Plus) approach Remuneration approach - Two companies use a Local Plus (Host Plus) approach to remuneration Determination of base salary - Three companies link assignees base salary with the home salary - Two companies expect that salaries will change when employees go on assignment, while two companies do not - One company reviews salary changes when assignees go on a project on a case by case basis. Delivery of remuneration - Three companies split the delivery of remuneration between home and host currencies Determination of base salary - Companies determine the base salary on case by case basis Delivery of remuneration - All companies reported that they deliver remuneration in their host currency for permanent one way assignments - One company delivers remuneration in home currency and one company delivers remuneration in host currency - Four companies link superannuation for international assignments to the home location, while one company links superannuation to the host location Cost of Living Allowance (Goods and services differential) - Two companies provide a Cost of Living allowance - Five companies provide a Cost of Living allowance - Not provided The SIRVA India Mobility Report - Vol. 1,

74 International Manufacturing/ Petrochemical Policy Components Tier 1 Short Term Long Term Permanant One Way Cost of Living Allowance (Goods and services differential) (cont d) Calculation of Cost of Living Allowance - Two companies calculate the cost of living allowance on the gross base salary (inclusive of taxes) - Two companies base the allowance on total remuneration and one company bases the allowance on net base salary (exclusive of taxes) - Three companies use a modified index to remove certain elements so as not to overcompensate for items that are paid for separately - Two companies use modified index and it varies case by case Review of Cost of Living Allowance - Three companies review and adjust the cost of living allowances half-yearly and two companies review annually - Three companies review exchange rate fluctuations quarterly and two review half-yearly - Two companies adjust the exchange rate and cost of living allowance if the difference is more than 10%, while two companies adjust the exchange rate and cost of living allowance if the difference is more than 5% Remote or Hardship allowance - Three companies provide a hardship allowance - Four companies provide a hardship allowance - One company provides a hardship allowance Source of Hardship allowance - Three companies use a Cost of Living provider to calculate the hardship allowance while one company uses an internal benchmark (a percentage of the base salary, for example) Approach to Hardship allowance - Four companies use the same hardship amount or percentage regardless of the home location, while one company provides a lesser hardship amount or percentage for assignees from less developed countries International assignment premium - One company pays an international assignment premium of 10% of the base salary 74 The SIRVA India Mobility Report - Vol. 1, 2012

75 International Manufacturing/ Petrochemical Policy Components Tier 1 Short Term Long Term Permanant One Way Incidental or Relocation Allowance - Not provided - One company provides a relocation allowance of 10% of the base salary and one company provides 20% of the base salary - One company provides 8% of the base salary - Two companies provide varying amounts of relocation allowance based on family size Housing assistance Application of housing assistance: Application of housing assistance: Initial accommodation: - Two companies pay the full cost of housing at the host location Determination of housing allowances: - One company uses Cost of Living providers to determine the housing allowances while one company uses a relocation company to determine the housing allowances - Three companies deduct the housing norm at home and pay the full housing cost at the new location while one company pays the full cost of housing at the host location, without deducting the housing norm - One company pays the positive differential only Determination of housing allowances: - One company provides initial temporary accommodation - Three companies use Cost of Living providers to determine the housing allowances - Two companies use Real Estate consultants to determine the housing allowances - Two companies use a relocation company to determine the housing allowances Utility cost - One company reimburses the actual amount of utility while two companies cap the amount of reimbursement for utilities The SIRVA India Mobility Report - Vol. 1,

76 International Manufacturing/ Petrochemical Policy Components Tier 1 Short Term Long Term Permanant One Way Housing assistance (cont d) - One company includes utility reimbursement in the housing allowance - Five companies cap the amount of housing allowance based on family size, base salary and assignee s position Home Leave travel - Not provided - Two companies allocate one home trip per assignment each year while three companies allocate two home trips per assignment each year - Not provided - Four companies cover the travel cost to anywhere, but cost is limited to home /host return fare Rest and Recreation leave (R&R leave) - Two companies provide R&R in selected locations - Three companies provide R&R in selected locations affected by remoteness, hardship or danger - Not reported Duration: - One company provides three days for rest and recreation, including travel time Duration: - Two companies provide three to seven days for rest and recreation, including travel time - One company provides seven days for rest and recreation, including travel time - One company provides varying lengths of time for R&R, depending on location Cost: - Two companies cover the travel costs for employees while they are on rest and recreation leave - One company cover the cost of accommodation for employees on rest and recreation leave 76 The SIRVA India Mobility Report - Vol. 1, 2012

77 International Manufacturing/ Petrochemical Policy Components Tier 1 Short Term Long Term Permanant One Way Private Transportation - Two companies provide a car allowance for assignees. - One company provides a car allowance for assignees - Two companies provide a car and driver for assignees - One company provides a car allowance for assignees - Two companies do not allow assignees to drive in the assignment location - One company recommends that assignees do not drive in the assignment location - One company determines private transportation based on local automobile policy and need Education assistance - Not provided Education assistance at host location: Education assistance at host location: - Five companies provide the tuition fees at the host location - Two companies provide textbooks, stationery and uniforms - One company provides a capped amount for dependent children s education expenses in the host location - Three companies cover the cost of transportation - One company provides a capped amount for dependent children s education expenses in the host location - One company provides a reasonable, but uncapped, amount of education assistance in the host location The SIRVA India Mobility Report - Vol. 1,

78 International Manufacturing/ Petrochemical Policy Components Tier 1 Short Term Long Term Permanant One Way Education assistance (cont d) Education assistance at home location: - One company contributes a capped amount to dependent children s education expenses in the home location; four companies do not - One company provides boarding fees Transportation of household goods, pets and storage Air freight: - Two companies provide 0-25kg of air freight Air freight: - Two companies provide 0-25kg of air freight Air freight: - One company provides 0-25kg of air freight - One company provides 26-50kg of air freight - One company provides 26-50kg of air freight - One company provides 51-70kg of air freight - One company provides 51-70kg of air freight - One company provides air freight on a case by case basis Transportation of household goods: Single: 20 ft container Family: 40 ft container Transportation of household goods: Single: 20 ft container Family: 40 ft container Transportation of cars: - Not provided Transportation of cars: - One company provides assistance for one car Transportation of cars: - Not provided Storage and insurance of household goods: - Five companies pay for the storage and insurance of furniture and household goods Transportation of pets - Not provided Transportation of pets - One company provides transportation of one pet for international assignments - One company provides transportation of two pets 78 The SIRVA India Mobility Report - Vol. 1, 2012

79 International Manufacturing/ Petrochemical Policy Components Tier 1 Short Term Long Term Permanant One Way Repatriation - Not provided Generally companies provide - Not provided standard support when repatriating employees: - Shipment of household goods and pets, etc. - Incidental allowance which assists in the purchase of any goods and services on arrival at their home location, typically between 5-10 percent of base pay - Assistance with lease breaks, negotiating timeframe for departure with real estate agents, formalising final payments, facilitating refund of security bond, completion of condition report, handing over the property, etc. Perception of Repatriation - Five companies believe career and succession planning to be an important aspect of repatriation - Three companies believe that retention is important - Two companies believe cultural readjustment to be important while one company believes that a guaranteed job on repatriation is important. Post-repatriation attrition - Three companies track assignees post repatriation - One company reported that its level of attrition two years post-repatriation is 1-5% The SIRVA India Mobility Report - Vol. 1,

80 International Manufacturing/ Petrochemical Policy Components Tier 1 Short Term Long Term Permanant One Way Repatriation (cont d) - One company s level of attrition is 5-10% - One company s level of attrition two years postrepatriation is higher than 10% - Three companies provide a repatriation briefing (or reverse cultural transition), while two companies do not - Three companies provide career planning and mentoring for international assignees 80 The SIRVA India Mobility Report - Vol. 1, 2012

81 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way Home countries of assignees - Belgium, China, Japan, Hong Kong, Germany, Middle East, Netherlands, South Africa, Thailand, United States, United Kingdom - Not reported Host locations in India - Bhopal, Bhubaneswar, Chandigarh, Dehradun, Jaipur, Jammu, Lucknow, Raipur, Ranchi, Panjim - Not reported Cost projections - All companies complete a cost projection prior to relocation. - One company includes relocation services (home and education search, orientation and cross-cultural briefing) in the projections - One company includes salary and allowances and one company includes the total cost of relocation (including travel, relocation services, transportation of household goods, storage etc.). - All companies include the total employment cost in cost projections, including all of the elements previously mentioned plus taxable components - Not reported Orientation - One company provides a three day orientation visit. - One company provides an orientation visit of up to five days - Two companies provide a seven-day orientation visit. - One company provides an orientation visit of up to five days - Not reported Cross-cultural transition program - Three companies conduct candidate and family cultural adaptability assessments - All companies engage external consultants to deliver a cross-cultural transition program - Three companies require mandatory attendance at crosscultural transition programs - Three companies provide the cross-cultural program prior to departure - Two companies provide the cross-cultural program upon arrival at the host location - Not reported The SIRVA India Mobility Report - Vol. 1,

82 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way Language training - Two companies provide ongoing language support - One company provides 40 hours of language training per individual - Not reported Partner career support - Two companies provide a lump sum payment for partner support - One company provides a percentage of the assignee s salary for partner support - One company provides a Career Assistance program while one company provides reimbursement of eligible expenses - Not reported Remuneration Remuneration approach - Two companies use a remuneration approach that comprises of build-up of salaries and allowances Remuneration approach - Three companies use a home based balance sheet approach for remuneration - Not reported Determination of base salary - Two companies link assignees base salary with the home salary - Not reported - Two companies expect that salaries will change when employees go on assignment, while one company do not Delivery of remuneration - Three companies split the delivery of remuneration between home and host currencies - One company delivers remuneration in home currency and one company delivers remuneration in host currency - Three companies link superannuation for international assignments to the home location, while one company links superannuation to the host location 82 The SIRVA India Mobility Report - Vol. 1, 2012

83 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way Cost of Living Allowance (Goods and Services Differential) - Two companies provide a Cost of Living allowance for international assignees - Three companies provide a Cost of Living allowance for international assignees - Not reported Calculation of Cost of Living Allowance - Two companies calculate the Cost of Living allowance on the gross base salary (inclusive of taxes) - Not reported - Two companies base the allowance on total remuneration and one company bases the allowance on net base salary (exclusive of taxes) - Three companies use a modified index to remove certain elements so as not to overcompensate for items that are paid for separately Review of Cost of Living Allowance - Three companies review and adjust the cost of living allowances half-yearly and two review annually - Three companies review exchange rate fluctuations quarterly and two review half-yearly - Two companies adjust the exchange rate and cost of living allowance if the difference is more than 10%, while two companies adjust the exchange rate and cost of living allowance if the difference is more than 5% Remote or Hardship allowance - Two companies provide a hardship allowance - Three companies provide a hardship allowance - Not reported Source of Hardship allowance - Two companies use a Cost of Living provider to calculate the hardship allowance while one company uses an internal benchmark (a percentage of the base salary, for example) - Not reported Approach to Hardship allowance - Two companies use the same hardship amount or percentage regardless of the home location while one company provides a lesser hardship amount or percentage from less developed countries The SIRVA India Mobility Report - Vol. 1,

84 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way International assignment premium - One company pays an international assignment premium of 10% of the base salary - Not reported Incidental or Relocation Allowance - Not provided - One company provides a - Not reported relocation allowance of 20% of the base salary - Two companies provide varying amounts of relocation allowance based on family size. Housing assistance Application of housing assistance: - Two companies pay the full cost of housing at the host location Determination of housing allowances: - One company uses Cost of Living providers to determine the housing allowances while one company uses a relocation company to determine the housing allowances - Two companies cap the amount of housing allowance based on family size Application of housing assistance: - Two companies deduct the housing norm at home and pay the full housing cost at the new location while one company pays the full cost of housing at the host location, without deducting the housing norm at home Determination of housing allowances: - Two companies use Cost of Living providers to determine the housing allowances - Two companies use Real Estate consultants to determine the housing allowances - Not reported - One company uses a relocation company to determine the housing allowances - Three companies cap the amount of housing allowance based on base salary, family size and/or assignee s position 84 The SIRVA India Mobility Report - Vol. 1, 2012

85 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way Housing assistance (cont d) Utility cost - Three companies cap the amount of housing allowance based on family size, base salary and assignee s position Home Leave travel - Not provided - One company allocates one home trip per assignment each year while two companies allocate two home trips per assignment each year - Not reported - Three companies cover the travel cost to anywhere, but the cost is limited to home/host return fare Rest and Recreation leave (R&R leave) - Two companies provide R&R in selected locations affected by remoteness, hardship or danger - Two companies provide R&R in selected locations affected by remoteness, hardship or danger - Not reported Duration: - One company provides three days for rest and recreation, including travel time Duration: - One company provides three to seven days for rest and recreation, including travel time - One company provides seven days for rest and recreation, including travel time - One company provides varying lengths of time for R&R, depending on location Private Transportation - Two companies provide a car allowance for assignees - Two companies provide a car and driver for assignees - Not reported - Two companies do not allow assignees to drive in the assignment location - One company recommends that assignees do not drive in the assignment location The SIRVA India Mobility Report - Vol. 1,

86 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way Education assistance - Not provided Education assistance at host location: - One company provides a capped amount for dependent children s education expenses in the host location - Not reported - One company provides a reasonable, but uncapped, amount of education assistance in the host location Transportation of household goods, pets and storage Air freight: - One company provides 0-25kg of air freight Air freight: - One company provides 0-25kg of air freight - Not reported - One company provides 26-50kg of air freight. - One company provides 26-50kg of air freight Transportation of cars: - Not provided - One company provides air freight on a case by case basis Transportation of household goods: Single: 20 ft container Family: 40 ft container Transportation of cars: - One company provides assistance for one car Storage and insurance of household goods: -Three companies pay for the storage and insurance of furniture and household goods Transportation of pets - Not provided Transportation of pets - One company provides transportation of one pet for international assignments - Not reported - One company provides transportation of two pets 86 The SIRVA India Mobility Report - Vol. 1, 2012

87 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way Repatriation - Not provided Generally companies provide - Not reported standard support when repatriating employees: - Shipment of household goods and pets, etc. - Incidental allowance which assists in the purchase of any goods and services on arrival at their home location, typically between 5-10 percent of base pay - Assistance with lease breaks, negotiating timeframe for departure with real estate agents, formalising final payments, facilitating refund of security bond, completion of condition report, handing over the property, etc. Perception of Repatriation - Three companies believe career and succession planning to be an important aspect of repatriation - Three companies believe that retention is important - Two companies believe cultural readjustment to be important while one company believes that a guaranteed job on repatriation is important. Post-repatriation attrition - Three companies track assignees post-repatriation - One company reported that its level of attrition two years post-repatriation is 1-5% The SIRVA India Mobility Report - Vol. 1,

88 International Manufacturing/ Petrochemical Policy Components Non Tier 1 Short Term Long Term Permanant One Way Repatriation (cont d) - One company s level of attrition is 5-10% - One company s level of attrition two years postrepatriation is higher than 10% - Three companies provide a repatriation briefing (or reverse cultural transition) - Three companies provide career planning and mentoring for international assignees 88 The SIRVA India Mobility Report - Vol. 1, 2012

89 Miscellaneous Four companies participated International assignments Four companies reported international relocation assignments. All four companies reported presence in Tier 1 locations. One company reported presence in Non Tier 1 locations Domestic assignments Two companies reported domestic relocation assignments. Two companies reported presence in Tier 1 locations. Two companies reported presence in Non Tier 1 locations. Minimum of three companies are required for reporting purposes and to maintain the confidentiality of participants. Please Note: Data for International Non Tier 1 assignments cannot be reported as less than three responses were received. The SIRVA India Mobility Report - Vol. 1,

90 International Miscellaneous Policy Components Tier 1 Short Term Long Term Permanant One Way Home countries of assignees - Australia, Europe, United States and United Kingdom Host locations in India - Bangalore, Chennai, Hyderabad, Mumbai and New Delhi Cost projections - Three companies complete cost projections prior to relocation - Two companies include the total employment cost (which includes taxable components) - Two companies include relocation services (including home and education search, orientation and cross-cultural briefing) in the cost projection - Two companies include the total cost of relocation (including travel, relocation services, transportation of household goods and storage) in the projections - One company includes salary and allowances in the cost projections Orientation - Not provided - One company provides a seven-day orientation trip - Two companies provide a three-day orientation tip Cross-cultural transition program - Three companies do not conduct candidate and family cultural adaptability assessments - Two companies engage external consultants to deliver cross-cultural transition programs - One company provides online learning for cross-cultural transition - Two companies reported that attendance at cross-cultural transition programs is not mandatory - Two companies deliver cross-cultural transition programs on arrival at the host location - One company uses a relocation company to provide a security briefing to international assignees - One company conducts a security briefing in-house 90 The SIRVA India Mobility Report - Vol. 1, 2012

91 International Miscellaneous Policy Components Language training Tier 1 Short Term Long Term Permanant One Way - One company provides 40 hours of language training per individual Partner Career Support - Not provided - One company provides a lump sum payment for partner support Remuneration Remuneration approach - Two companies use a build up of salary and allowances remuneration approach Remuneration approach - Three companies use a home based balance sheet remuneration approach Remuneration approach - Two companies use a build up of salary and allowances remuneration approach Determination of base salary - Two companies link the base salary to the host location - One company links the base salary to the home location - Two companies expect the base salary to change when an employee goes on assignment - One company evaluates salary changes on a case by case basis Delivery of remuneration - Two companies deliver remuneration for international assignees in home currency Determination of base salary - Companies determine the base salary on case by case basis Delivery of remuneration - All companies reported that they deliver remuneration in the host currency - One company has no defined policy for which currency it delivers remuneration in, and reviews case by case - One company links superannuation to the home location and one company links superannuation to the host location Cost of Living Allowance (Goods and Services Differential) - Two companies provide a Cost of Living allowance - All companies provide a Cost of Living allowance Calculation of Cost of Living Allowance - Two companies calculate the allowance on gross base salary (inclusive of taxes) - One company calculates the allowance on fixed remuneration with variable components like incentives and bonuses - Not provided - Not reported The SIRVA India Mobility Report - Vol. 1,

92 International Miscellaneous Policy Components Tier 1 Short Term Long Term Permanant One Way Cost of Living Allowance (cont d) - One company uses a modified index to remove certain elements from the allowance Review of Cost of Living Allowance - Four companies review and adjust the Cost of Living allowance annually - One company reviews quarterly Remote or Hardship allowance - One company provides a hardship allowance - Two companies provide a hardship allowance - One company provides a hardship allowance Source of Hardship allowance To establish the hardship allowance, two companies use an internal benchmark Approach to Hardship allowance - Two companies provide the same hardship amount or percentage to assignees regardless of home location - One company pays a lesser hardship amount or percentage for assignees from less developed countries International assignment premium - Not provided - One company pays an international assignment premium of 10% of the base salary - Two companies provide an unspecified premium 92 The SIRVA India Mobility Report - Vol. 1, 2012

93 International Miscellaneous Policy Components Tier 1 Short Term Long Term Permanant One Way Incidental or Relocation Allowance - Not provided - One company provides an allowance of USD12,700 (conversion applied) Housing assistance Application of housing assistance - One company pays the full housing cost at the host location Determination of housing allowances Application of housing assistance - One company remunerates housing by deducting the housing norm at home and paying the full cost of housing at the host location Initial accommodation - One company provides initial temporary accommodation for one month - One company uses an internal benchmarking data - One company uses a relocation company - Two companies compensate the actual housing expenses Utility cost - Not provided - Two companies pay the full housing cost at the host location but do not deduct the housing norm at home Determination of housing allowances - Two companies use Cost of Living providers to determine the housing allowances - One company uses an internal source to determine the housing allowances - One company compensates the actual housing expenses - Two companies provide a capped amount of housing allowance based on position Utility cost - Two companies reimburse the actual amount of utility costs - One company includes the utility reimbursement in the housing allowance The SIRVA India Mobility Report - Vol. 1,

94 International Miscellaneous Policy Components Tier 1 Short Term Long Term Permanant One Way Home Leave travel - Not provided - Three companies provide - Not provided one home leave trip for each assignment per year - One company provides travel anywhere, but the cost is limited to home host return fare Rest and Recreation Leave (R&R Leave) - Not provided - Three companies provide rest and recreation leave in selected locations affected by remoteness, hardship or danger - Not provided Duration: - Three companies provide a various number of days for rest and recreation, depending on location Cost: - Two companies cover the cost of travel while assignees are on rest and recreation leave Private transportation - One company provides a car and driver - One company provides private transportation, depending on position - One company provides private transportation, depending on position Education assistance - Not provided Education assistance at host location: - Three companies provide assistance for tuition fees at the host location - Not provided - One company provides assistance for textbooks, stationery and uniforms at the host location 94 The SIRVA India Mobility Report - Vol. 1, 2012

95 International Miscellaneous Policy Components Tier 1 Short Term Long Term Permanant One Way Education assistance Education assistance at home location: - One company contributes a reasonable, but uncapped, amount of support for dependent children s education expenses in the home location providing assistance for boarding fees Transportation of household goods, pets and storage Air freight: - One company provides 26-50kg of air freight Air freight: - One company provides 26-50kg of air freight Air freight: - One company provides 26-50kg of air freight - One company provides air freight assistance on a case by case basis - One company provides 51-70kg of air freight - One company provides air freight assistance on a case by case basis Transportation of household goods: Single: 20 ft container Family: 40 ft container - One company provides air freight assistance on a case by case basis Transportation of household goods: Single: 20 ft container Family: 40 ft container Transportation of cars: - Not provided Transportation of cars: Not provided Transportation of cars: - Not reported Storage and insurance of household goods: - Three companies pay for the storage and insurance of household goods and furniture Transportation of pets - Not provided Transportation of pets - One company provides assistance for the transportation of pets The SIRVA India Mobility Report - Vol. 1,

96 International Miscellaneous Policy Components Tier 1 Short Term Long Term Permanant One Way Repatriation - Not provided Generally companies provide - Not provided standard support when repatriating employees: - Shipment of household goods and pets, etc. - Incidental allowance which assists in the purchase of any goods and services on arrival at their home location, typically between 5-10 percent of base pay - Assistance with lease breaks, negotiating timeframe for departure with real estate agents, formalising final payments, facilitating refund of security bond, completion of condition report, handing over the property, etc. Perception of Repatriation - One company provides a mentoring program for employees - Two companies believe that a guaranteed job on repatriation to be important - One company believes that retention is an important aspect of repatriation - Two companies believes that career and succession planning are an important part of repatriation Post-repatriation attrition - One company tracks assignees post-repatriation 96 The SIRVA India Mobility Report - Vol. 1, 2012