1. Effective Strategies in Expatriate Cost Management Brian Friedman 14 July 2009

2. What makes assignees expensive ? Allowances35% Property costs35% Relocation Costs15 % Professional services10 % In-house costs <5%

3. Policy Review Who is an expat Selection / Governance procedures Traditional Policy Local Plus Expat Lite Flexpat policy

4. Allowances Benchmark allowances COLA Zero based allowances Gainshare allowances Flexpat

5. Property - the elephant in the room Review housing allowances Location, location, location Don’t show property over budget Gainshare with assignees Hotels, serviced accommodation, rentals Bulk deals Fees – v – commission Incentivise DSPs Shared Accommodation Deductibles

6. Removals / Shipping Plan in advance – not last minute Shared Loads Back Loads Volume limits Incentivise assignee Incentivise service provider

7. Banking and Currency Review banking arrangements Understand charges and commissions Consider a specialist FX dealer Consider caps and collars Hedge liabilities Review assignee remittance costs

8. Schooling Use of education consultants / guides State v Private / Day v Boarding Home v Host Bulk discounts Gainshare with assignee / vendor Deductibles

9. Tax / Social Security Compliance – No 1 priority Risk Management Quarterly Review of savings Gainshare Review Tax Equalisation policy In-house – v- Outsource

10. Travel Policy Class of travel / Choice of airline Frequency Family members Destination Gainshare Flexpat

11. Immigration Compliance / Risk Management In-house v outsource Get your service provider to train you Choice of service provider

12. Pension / Insurances International Pensions Healthcare / Medical General Insurance Emergency home leave

13. Vendor Partnerships Partnerships – create the win-win Service Level Agreements / Gainshare Keeping the relationship fresh Over-runs and out of scopes Centralised v Local billing When to RFP / RFI and Transition management

14. In-house v Outsourcing What to outsource (and when and where) Use of contractors and home workers Never outsource responsibility Use experts to train in-house staff Loan staff

15. Non essential services Is anything non-essential Review what is absolutely necessary “Nice to haves” v “must haves” Is the pain worth the gain ?

16. Technology Use technology to reduce cost Use technology to enhance service Use technology to manage process Use technology to connect assignees

17. Volunteers Trailing Spouses Buddy Programmes Intercultural training

18. Ten easy ways to save money

19. Focus on the ROI of the assignment Establish a definition of success

20. Don’t tell the assignee he is the only candidate !!!!!

21. Have a policy……. And stick to it

22. Focus on the family not just the assignee

23. Don’t separate costs into multiple budgets

24. Avoid Allowance Overload Try a Flexpat approach

25. Always have deductibles

26. Localise, localise, localise

27. Talk to your service providers

28. Gainshare with the assignees

29. The best companies make assignments a pre- condition for reaching board level Read the Mckinsey study

30. Expatriate and Vendor Cost Management 14 July 2009