Most of our clients regard expat partner support as an investment – not as relocation costs – as it increases the success of the posting and the mobility. However, the cost allocation of these high-return investments requires proper attention – not least to avoid falling prey to cost-cutting exercises.
‘Penny wise, pound foolish’ cost savings
A few years ago, an HR director told me that he had been unable to stop partner support cost-cutting as he was lacking the figures to show any return on investment. The board had decided that corporate HR had to cut costs, due to poor company results, and partner support costs fell under corporate HR costs. Since then, the HR director has been able to calculate the annual multi-million euro ROI, excluding the benefits of increased mobility, and obtained approval to re-implement the old partner support programme.
A board level issue
Discussing this topic with a number of our clients has led to the conclusion that only one general rule is applicable for partner support costs: treat them as an investment, wherever the costs are allocated, and make the ROI a leading factor in the discussions. It is also important for boards to understand that these costs are anything but ‘relocation costs’ (similar to removal costs, for example).
Cost efficiency and effectiveness
As our surveys have shown, choosing cost-efficient and effective support is the only way to cut costs. Among the many best practices we have applied is switching from ‘cash out’ (‘Gucci money’) to reimbursable support. This not only leads to an increase in the effectiveness, but also to a high cost reduction as a result of the usual uptake figures.
