Study on Relocation Practices for Incoming Global Talent to Singapore

7/27/2019 Study on Relocation Practices for Incoming Global Talent to Singapore

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RELOCATION PRACTICESFOR INCOMING GLOBAL TALENT TO SINGAPORE


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International Manpower DivisionJanuary 2011

RELOCATION PRACTICES FOR INCOMINGGLOBAL TALENT TO SINGAPORE

A study commissioned by the Ministry of ManpowerSurvey report prepared by PwC International Assignment Services


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COPYRIGHT NOTICE

Copyright The Government of Singapore. All rights reserved. No part ofthis Report may be reproduced, stored in any retrieval system, ortransmitted, in any form or by any means, whether electronic or mechanical

including photocopying and recording, without the permission of theMinistry of Manpower. All enquiries seeking any such permission should be

addressed to:-

DirectorInternational Manpower Division

Ministry of Manpower18 Havelock Road #04-03

MOM BuildingSingapore 059764

Republic of Singapore

Fax: 65362496Email: [email protected]


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Table of Contents

1 Relocation Practices for Incoming Global Talent to Singapore 5

1.1 Objectives of the study 5

1.2 Research methodology 6

1.3 Employee categories 61.4 Survey participants 7

2 Key Survey Findings 9

2.1 Types of relocation support 9

2.2 Relocation support provided to foreign executives on expatriate / non-expatriate terms 9

2.2.1 HR briefings 10

2.2.2 Pre-assignment familiarisation trips and orientation/settling-in programmes 11

2.2.3 Relocation airfare and shipment, temporary accommodation, departure management 11

2.2.4 Immigration and tax services 12

2.2.5 Lump sum relocation allowance 13

2.2.6 Home search assistance 15

2.2.7 School search assistance 15

2.2.8 Spousal assistance 16

2.3 Relocation support provided to Returning Singaporeans 17

2.3.1 HR briefings Returning Singaporeans/SPRs 18

2.3.2 Relocation assistance Repatriating Singaporeans/SPRs 18

2.3.3 Relocation Assistance Singaporean/SPR New Hires 18

2.3.4 Re-integration support 20

3 Global Mobility Considerations for Singapore Based Companies 20

3.1 Global talent attraction and retention strategies adopted 213.2 Compensation package considerations for foreign executives on non-expatriate terms 22

3.2.1 Housing 22

3.2.2 Dependent education 23

3.2.3 Pension 23

3.2.4 New hires on non-expatriate terms receiving limited relocation support 23

3.3 Compensation package considerations for Returning Singaporeans 24

3.4 Key challenges faced in global talent attraction and retention 24

3.5 Pension benefits as a longer-term retention tool 25

3.6 Alternative support models 25

3.7 Further Tax Deduction (FTD) Scheme 26

4 The Future Role of HR 27

5 Managing a Mobile and Diverse Workforce 28

6 Glossary of Terms 29

7 Use of this Report 33

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1 Relocation practices for incoming global talent to Singapore

Singapore has enjoyed unprecedented success in attracting businesses to set up here, largely as a result of its reputationas a safe, transparent, cosmopolitan, business friendly location. These businesses have brought global talent with them as

well as recruited from the local talent pool.

As companies based in Singapore continue with their expansion and globalisation plans, they will inevitably need to lookfor talent beyond Singapores borders.

Whilst having a global and mobile workforce is now recognised as a critical component for the success of multinationalcompanies doing business internationally, managing the global workforce does have its own unique challenges.

The HR function of many Singapore based companies has increasingly been faced with having to manage a global anddiverse workforce, challenging HR systems, policies and competencies in the process.

In a bid to attract foreign talent to Singapore, competitive relocation policies are an essential starting point for companies

set on attracting the talent they need to relocate to Singapore. Increased awareness of relocation and assimilation issuesspecific to foreign executives and Returning Singaporeans may highlight the importance of proper support at the relocationstage which would certainly help with longer term retention prospects.

A longer term view of relocation costs should be adopted, evaluating against the return on investment and possibleturnover, recruitment, retraining costs which may occur as a result of lack of support at the beginning.

1.1 Objectives of the study

The Singapore Ministry of Manpower (MOM) commissioned a study in March 2010 aimed at understanding relocationpractices currently adopted by Singapore based companies in relation to global talent. MOM appointed PwC International

Assignment Services (PwC IAS) to conduct this study.

For the purpose of this study, the following definitions in relation to global talent have been adopted:

s &OREIGN%XECUTIVES0ROFESSIONALSWHOAREFOREIGNNATIONALSWHOHAVERELOCATEDTO3INGAPOREEITHERONEXPATRIATEor non-expatriate terms. They should be in possession of recognised qualifications and skill sets and an EmploymentPass.

s 2ETURNING3INGAPOREANS!NOVERSEAS3INGAPOREANOR3INGAPORE0ERMANENT2ESIDENT302WHOHASRETURNEDTOwork in Singapore (either repatriating at the end of an overseas assignment or a new direct foreign hire).

The objectives of the study are to:

s 5NDERSTANDHOW CURRENT RELOCATION PRACTICES OF 3INGAPORE BASED COMPANIES COMPARE TO RELOCATION PRACTICESadopted by companies globally

s (IGHLIGHTTHEKEYCHALLENGES3INGAPOREBASEDCOMPANIESFACEINATTRACTINGANDRETAININGGLOBALTALENT

s 0ROVIDEAGENERALOVERVIEWOFPOSSIBLERELOCATIONBESTPRACTICESWHICH3INGAPOREBASEDCOMPANIESMAYWISHTOconsider in attracting, managing and retaining global talent

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1.2 Research methodology

121 companies participated in the on-line web survey entitled Relocation practices for incoming global talent to Singaporecarried out over 3 weeks between February and March 2010. Participants were asked to respond based on the information

available to them at the point of time when completing the survey. All responses were collated and aggregated to ensureconfidentiality of data.

The questionnaire used to collect data was organised into four main sections: Section 1 Managing Foreign ExecutivesSection 2 Relocation Assistance for Foreign Executives

Section 3 Attracting and Retaining Foreign Executives on Non-Expatriate Terms Section 4 Returning Singaporeans

The definitions of key terms used throughout this report and the survey can be found in the Glossary of Terms.

The survey results on local relocation practices were then analysed and benchmarked against global relocation practicesbased on existing PwC proprietary data and reports which include but are not limited to the following:

s 0W#S'LOBAL)NTERNATIONAL!SSIGNMENT0OLICY3URVEY1

s PricewaterhouseCoopers 13th Annual Global CEO Survey2

s Geodesy a PwC and Cranfield School of Management international mobility research initiative.

s PricewaterhouseCoopers Saratoga global database of human capital benchmarking and performance metricsstudies

s Talent Mobility 2020 The next generation of international assignments3

1.3 Employee categories

Employee types covered in the survey can be divided into five main categories:

s &OREIGN%XECUTIVESON%XPATRIATE4ERMS

s New Foreign Sourced Hires on Non-Expatriate Terms

s Intra-Company Transferees on Non-Expatriate Terms

s Returning Singaporeans - Repatriating

s Returning Singaporeans - New Hires

1 An on-going global survey on Expatriate Tax and Compensation Policies conducted by PwC since 1992. Reference to key statistics from the survey (data extracted

in January 2010) has been made throughout this report. The January 2010 survey data is reflective of relocation practices of 396 companies globally and has been

used in this report to determine global relocation practices where corresponding statistical data has been available.

2 A survey conducted with 1,198 global CEOs in 52 countries between August to November 2009 to gain their insights and perspectives on the business

environment and global economy.

3 A PwC report released in April 2010 that explores the issues of future talent mobility based on PwCs global survey database of 900 companies, scenario planning

studies, data based on interviews with millennials and key PwC talent mobility specialists globally.

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Figure 1

Table 1

Categories Count

Foreign Executives on Expatriate Terms 102New Foreign Sourced Hires on Non-Expatriate Terms 89

Intra-Company Transferees on Non-Expatriate Terms 73

Base responses 121

Table 2

Categories Count

Returning Singaporeans - Repatriating 47

Returning Singaporeans - New Hires 42

None 32

Base responses 121

1.4 Survey participants

HR professionals from 121 Singapore-based companies participated in the survey.

96 of the participating companies are multinational companies (MNC) and 11 are Government / Government-linked

companies.

38% have their global headquarters in North America, 24% in Western Europe, 21.5% in Singapore and 9.9% in Asia

(excluding Singapore). The survey results also showed that 67 companies have chosen Singapore as their regional

headquarters.

Participating companies have been categorised into industry groups according to their main business.

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Figure 2

Figure 3

0%

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2 Key survey findings

In this section, the key survey findings in relation to common relocation practices in Singapore have been outlined. Whereverpossible, a comparison of local relocation practices against global relocation standards based on PwCs proprietary datahas been highlighted under the sub-heading Global Relocation Practices.

2.1 Types of relocation support

When conducting the survey to determine current relocation practices of Singapore based companies, the morecommon relocation support elements were identified and focused on in the survey. The relocation support elementsincluded in the survey are:

s (2BRIElNGSPREANDPOSTARRIVALs Pre-assignment familiarisation trips Orientation/settling in programmes

s Relocation airfares Relocation shipments Temporary accommodations Departure managements Immigration servicess Tax servicess Lump sum relocation allowances Home search assistances School search assistances Spousal assistance

2.2 Relocation support provided to foreign executives on expatriate / non-expatriateterms

Survey findings show that the relocation practices of Singapore based companies particularly for those relocatingforeign executives on expatriate terms are generally in line with global relocation practices.

For Singapore in-bound foreign executive transferees and new direct foreign hires on non-expatriate terms, relocationsupport provided is generally less comprehensive in comparison, typically including the following benefits:

s HR briefingss Relocation airfares Temporary accommodation

s Immigration servicess Home search assistance

To ascertain how local relocation practices compare with global relocation practices, the following assumptionshave been made:

a) Above global standards Where the relocation benefit(s) provided by participants in the survey is aboveglobal standards by more than 10%.

b) Consistent with global standards - Where the relocation benefit(s) provided by participants in the survey iswithin a 10% range of global standards.

c) Below global standards Where the relocation benefit(s) provided by participants in the survey is belowglobal standards by more than 10%.

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Table 3

Comparison of Global Relocation Practices with that of Singapore Based Companies (Foreign Executives on ExpatriateTerms / Non-Expatriate Terms)

RelocationBenefits

Benchmarked Against Global Pratices

Foreign Executives onExpatriate Terms

Foreign Executives on Non-Expatriate Terms

Intra-Company Transferees New Hires

Above Consistent Below Above Consistent Below Above Consistent Below

HR Briefings (pre-arrival)

HR Briefings (post-arrival)

Orientation / Setting-inprogrammes

Pre-assignment familiarisationtrips

Relocation airfare

Relocation shipment

Temporary accommodation

Departure management

Immigration services

Tax services (pre-arrival)

Tax services (post-arrival)

Home search assistance * *

School search assistance

Spousal assistance

Lump sum relocation allowance

* Refers to guided home search assistance only

2.2.1 HR briefings

The majority of Singapore based companies provided their foreign executives with a HR briefing to cover the relocationprocess, an overview of assignment terms and conditions and the objectives of the assignment.

Table 4

Responses PercentageYes, in-house pre-arrival HR briefing 80.2%

Yes, in-house post-arrival HR briefing 53.7%

Yes, external consultants briefing 29.8%

Not provided 4.1%

Base responses 121

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Figure 4

0%

Global relocation practices

A similar trend of placing more emphasis on pre-arrival rather than post-arrival briefings is also observed from global

practices. However, a higher proportion of companies, 36.3% and 31.7% globally use external consultants in their pre

and post-arrival briefings respectively. External consultants, focus in particular on providing guidance with the relocation

process and providing an overview on basic assignment entitlements.

2.2.2 Pre-assignment familiarisation trips and orientation/settling-in programmes

The survey results showed that Singapore based companies typically provide pre-assignment familiarisation trips and

orientation/settling-in programmes for their expatriates, but to a much lesser extent for their foreign executives relocating

on non-expatriate terms.


In comparison with global practices, almost 90% of global companies grant a pre-assignment/orientation trip to their

international assignees, subject to circumstances, location and where possible, combined with a business trip. The average

length of each pre-assignment trip may range, depending on the geographical distance and travel time, and companies will

typically pay for all reasonable costs. Most companies also include such costs into their assignment cost projections, which

are prepared at the planning stage for budgeting purposes.

2.2.3 Relocation airfare and shipment, temporary accommodation, departure management

Typically considered as basic relocation assistance, a greater number of companies provide these benefits to foreign

executives on both expatriate and non-expatriate terms, although there may be differing entitlements e.g. limited shipping

volume for the latter group.


Global relocation practices also reflect that the majority of companies provide these basic relocation benefits

to their foreign hires, including temporary accommodation and reasonable reimbursements for meals.

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Figure 5

0%

In terms of departure management assistance which may typically include home property management, sale of cars and

reimbursement for costs incurred due to early lease breaks, approximately half of companies globally provide these benefits

to their expatriates and even fewer will provide these benefits to their non-expatriate employees. This may be due to the

HIGHNUMBEROFREGIONALMOVESIN%UROPEANDTHE53WHEREBYMORETRANSFEREESAREONCOMMUTERARRANGEMENTSANDTHEIR

families continue to remain in the home location.

2.2.4 Immigration and tax services

Majority of companies surveyed provide immigration assistance to all groups of foreign executives in the application of appropriate

passes.

It is interesting to note from the survey results that, although both immigration and tax are important areas in which companies

always seek and ensure compliance to, there is however, a rather significant decrease in the level of tax assistance extended to

foreign executives on non-expatriate terms.


According to global practices, approximately 90% of global companies

provide tax services to their international assignees. The majority provide

both pre-arrival and post-arrival tax briefing meetings as well. Most global

companies who provide this benefit also employed the services of external

consultants (tax specialists) to manage the tax compliance issues related

to their cross-border deployments and global employees.

It is also not uncommon for companies to extend tax services to their

permanent transfers on non-expatriate terms, e.g. for the first one

or two years.

2.2.5 Lump sum relocation allowance

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Figure 6

0%

Survey results indicate that 88.2% of Singapore based companies provide relocation allowance to their expatriates and

that this is typically calculated based on family size or offered as a fixed amount.

In comparison, 39.3% and 26% of new foreign sourced hires and intra-company transferees on non-expatriate terms

respectively are not provided with relocation allowance. Where provided, most companies offer fixed amounts which are

likely to be of a smaller quantum.

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0%

Figure 7


In recognition that with any relocation, there will be miscellaneous expenses incurred, many companies globally provide

either a cash relocation allowance or agree to reimburse their employees for these expenses.

Global benchmarks indicate that approximately 90% of companies provide such assistance and that the most common

criteria used to determine the amount is to base it on a pre-determined fixed amount and to factor in family size. Permanenttransferees may receive a smaller amount and to some extent, this may also be provided on a case-by-case basis.

2.2.6 Home search assistance

Survey results show that more than 80% of foreign executives on expatriate terms are provided with guided home search

assistance by relocation vendors. As most expatriates on assignments are typically provided with company-leased housing,

companies will also assist to review the tenancy agreements and pay for deposits/costs.

Foreign executives on non-expatriate terms on the other hand, are provided mainly with general housing information and

with limited home search assistance in any other form. New foreign sourced hires, in particular, are provided with the leastassistance.


The survey results are reflective of general global practices where employees transferred on permanent basis are also

typically not provided with home search assistance and housing allowances.

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0%

Figure 8

2.2.7 School search assistance

Survey results indicate that companies in general only assist by providing general school information.

Foreign executives on expatriate terms are provided additionally with assistance in school registrations and deposits. Less

than half of the companies surveyed provide guided school search assistance by relocation vendors. Access to education

counsellors is also not typically provided.

Consistent with providing leaner assistance for those on non-expatriate terms, other than general school information which

is provided by approximately half of the survey respondents, foreign sourced hires and intra-company transferees receive

limited assistance in relation to dependent schooling.

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Figure 9

0%


The survey results are consistent with global practices in that foreign executives on non-expatriate terms are normally not

provided with dependent schooling assistance at all educational levels. However, in some locations, it may not be entirely

necessary for children of foreign executives to attend an international school or the cost of these international schools may

not be as high as they are in Singapore.

2.2.8 Spousal assistance

Survey results indicate that not much emphasis is given to spousal assistance with only 40% of

companies providing some form of support in this area. If provided, support is normally in the

form of education / training and spousal assistance programmes which will generally include

resume writing and career counselling.


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0%

Search firm

services

Spousal

assistance

programmes

Professional

development

events

Education/

Training

support

Spousal

allo wance

Compensation

for loss of

spousal income

Others Not provided

11.8%

17.6%21.6%

1.1%

1.1% 1.1%

4.1%7.8%

2.7% 2.7%

13.7%

1.4% 3.9%

0.0% 0.0% 0.0% 0.0%

2.0%

0.0%

59.8%

92.1% 91.8%

5.6%4.1%

Figure 10

More than half of companies globally provide work permit assistance to support spouses seeking to work in the assignment

host locations. Companies may also provide a discretionary allowance for receipted expenses supporting spousal career

enhancing activities and training reimbursements/payments (approximately 25%) and job hunting (approximately 40%).

2.3 Relocation support provided to Returning Singaporeans

The survey also briefly looked at the extent of support companies provide to Returning Singaporeans in the relocation and

reintegration process. No distinctions have been made in relation to the seniority of these employees.

From the survey results, we note that the extent of relocation assistance provided to the Repatriating and New Hire

groups often differs. Returning Singaporeans who are repatriating after a company sponsored international assignment

are generally provided with the core relocation benefits. However, returning Singaporeans who are new hires may receive

limited support with some companies not even providing core relocation benefits.

2.3.1 HR briefings Returning Singaporeans/SPRs

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Figure 11

63.8% 63.8%

91.5%87.2%

48.9%

63.8% 61.7%

2.1%

50.0%

11.9%

38.1%33.3% 31.0%

11.9%

33.3% 38.1%

Returning Singaporeans - Repatriating Returning Singaporeans - New Hires

HRbriefings

Departuremanagement

Relocationairfare

Lump sumrelocationallowance

Notprovided

Relocationshipment

Temporaryaccommodationin Singapore

TaxAssistance

0%

Of the 47 companies surveyed who have Returning Singaporeans/SPRs repatriating to Singapore, approximately 64%

provide HR briefings upon repatriation. In comparison, of the 42 companies who have Returning Singaporeans/SPRs who

are new hires, only 50% provide HR briefings upon relocation to Singapore.

2.3.2 Relocation assistance Repatriating Singaporeans/SPRs

The survey results show that most companies provide basic relocation assistance to their Singaporean employees repatriating

from an overseas assignment, with approximately 90% providing relocation airfare and shipment.

Approximately 63% of the companies also provide departure management, tax assistance and lump sum relocation

allowance to repatriating Singaporeans.

However, less than half of the companies provide temporary accommodation in Singapore to repatriating Singaporeans.

2.3.3 Relocation Assistance Singaporean/SPR New Hires

Returning Singaporeans who are new hires to the companies receive significantly less relocation support compared to the

repatriating Singaporeans with 38% of the respondents not providing any relocation assistance at all. One reason may be

that for Repatriating Singaporeans, their relocation support is determined according to the companys global repatriation

policy; whereas for New Hires, relocation support is provided on a case by case basis or negotiated for based on how crucial

the individual is to the company.

Only about one third of the companies provide relocation assistance in the form of relocation airfare and shipment,

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Figure 12

5.6%

7.0%

11.3%

18.3%

40.8%

53.5%

A

Assistance with immigrationprocedures for non-Singaporeans

and non-PR family members

None of the above is provided

A housing allowance or subsidy in theevent that permanent accommodation is

not immediately available

Information on integrationprogrammes into local schools

Job search assistance or careercounselling for spouse/ family

Allowance or subsidy of internationalschool fees in the event that integration

into local school is not feasible

0%

temporary accommodation in Singapore and lump sum relocation allowance. Approximately 12% of the respondents

provide departure management and tax assistance to the Returning Singaporean new hires.

This is in contrast to the extent of relocation support provided to

new foreign sourced hires where only 3.4% of companies do

not provide any form of relocation assistance to them.

2.3.4 Re-integration support

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Figure 13

0.8%

5.8%

44.6%

59.5%

76.0%

Others, please specify

No key strategy in place

Flexible/ competitive

compensation packages

Identify and develop

global talent for futureroles

Identify the 'right' fit of

global talent for currentroles

0%

Besides relocation assistance, survey participants were also asked to indicate if other forms of support are provided to

assist the Returning Singaporeans in their reintegration into the country.

Survey results indicate that companies in general, offer limited assistance to the Returning Singaporeans and their families

in the reintegration process.

3 Global Mobility Considerations for Singapore based Companies

In this section of the report, we will highlight key factors that are distinctive to managing global talent in Singapore asidentified from the survey findings.

3.1 Global talent attraction and retention strategies adopted

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Figure 14

0%

In the survey, we see that companies are evidently realising that compensation is just one piece of the talent puzzle as less than

half of the respondents relied on flexible or competitive compensation packages to attract global talent. Approximately 60%

of companies are placing emphasis on identifying and developing global talent for future roles.

The importance of global talent identification and development strategies can be seen from human capital learning points that

surfaced as a result of the downturn4.

4 Human capital learning points as highlighted in the 13th annual PwC Global CEO survey released in January 2010 include:

CEOs were unable to move talent around quickly when the crisis hit, leading to large-scale layoffs to save cash at one extreme, but also left crucial talent

gaps at the other.

Employees lacked the key skills needed to operate and compete in the new emerging environment.

CEOs were more concerned about the availability of key skills compared to the year before.

Companies to evaluate the talent they have today and then project their talent needs in the short and long term, to help them think strategically about

their hiring, development and succession planning throughout the organisation. Development of talent may take the form of rotational assignments, formal

training and strong mentoring.

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Figure 15

0%

3.2 Compensation package considerations for foreign executives on non-expatriate terms

In terms of salaries and allowances, whilst most companies follow the local benchmarks, some may offer either the higher

country salary bands or adopt a pseudo host approach i.e. modified salary scales higher than that of the local employees.

Of the 121 companies who participated in this survey, 26% would offer salaries above local benchmark levels. A small groupof respondents provided incentives such as sign-on / completion bonus (19%) or International Assignment Mobility Premiums

(11%).

3.2.1 Housing

Nearly half of the respondents either fully or partially subsidised housing costs. Of those who provide the benefit, 54.2%

provide the subsidy throughout the employment duration.

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Figure 16

64.8%7.0%

26.8%

1.4% Follow local benchmarks

Package is reassessed

and premiums provided to

recognise overseas

experience

Case-by-case basis

3.2.2 Dependent education

17% of the survey respondents fully or partially subsidised the cost of dependent schooling. Of this, 35.3% provide the subsidy

throughout the employment, whilst the remaining companies provide the benefit only for a limited duration.

3.2.3 Pension

We also observed that as foreigners are not eligible to participate in Singapores Central Provident Fund (CPF) scheme, 27%

of the companies provide alternative pension arrangements either in the form of cash-in-lieu of CPF or as a contribution to

the Supplementary Retirement Scheme. 22% of the respondents either allow their non-expatriate foreign executives to remain

in their home pension schemes or enroll them into the companys pension plan. In both scenarios, 70% and above of the

respondents provide the benefit throughout the employment.

3.2.4 New hires on non-expatriate terms receiving limited relocation support

The survey results show that the foreign direct hires, which represent the group of foreign executives who have the most

potential of staying longer term in Singapore are those receiving the least relocation support compared to other categories of

foreign executives.

As the relocation and settling in needs of the foreign direct hires are similar to those of any other foreign executive, more

relocation and re-integration benefits can be provided to ease their transition process.

As the relocation and settlin in needs of the forei n direct hires are similar to those of an other forei n executive, more

- .

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Figure 17

0%

3.3 Compensation package considerations for Returning Singaporeans

For Returning Singaporeans, 64.8% of respondents continue to follow local benchmarks for their compensation packages, and

only 7% of respondents reassess the packages and offer premiums to recognise the overseas experience.

3.4 Key challenges faced in global talent attraction and retention

When companies were asked to rate common key challenges in their attraction / retention strategies of non-expatriate

employees, the fluctuating housing market is rated as the most challenging factor which suggests how the high and rising

housing costs have impacted the foreign talent attraction strategies of Singapore companies.

Table 5

Challenges Attracting / Retaining Foreign Executives on Non-Expatriate Terms

1 Housing - fluctuating housing market

2 Compensation packages

3 Dependents education costs

4 Cost of living

5 Spouse/ Partners resistance due to career

6 Dependents education - lack of vacancies/ inadequate school choices

7 Dependents education - incompatible local school curriculum

8 Lack of career opportunities / development

When asked to rate the key challenges faced in attracting and retaining Returning Singaporeans, nearly half of the respondents

rated career opportunities / development and compensation package as the top two challenging factors.

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Figure 18

11.7%

52.5%

27.5%

20.8%

34.2%

20.0%

7.5%

33.3%

54.1%

27.5%

65.0%

45.9%

Subscription to online

relocation support services

by third party vendors

In-house support services

Provide/ subsidise

membership in

clubs/ associations

In-house buddy system

Provided Not provided but will consider Not provided and will not consider

0%

3.5 Pension benefits as a longer-term retention tool

Relocating to Singapore on local plus or local terms often means being hired on Singapore employment terms and conditions.

As Employment Pass holders in Singapore, if their Singapore based employer does not provide any pension benefit, this may

be a concern, especially for individuals originating from Western Europe and North America who often would have had some

form of pension benefit in their home countries.

As seen from the survey results, the majority of Singapore based companies who do provide some form of pension benefits offer

cash-in-lieu of CPF. Providing the benefit in this form puts the onus on the individual to plan and save for their retirement.

3.6 Alternative support models

We asked survey participants if they currently provide and if not, will they consider providing some alternative support models

that can assist in the relocation and integration of their talent into Singapore.

As the integration of new arrivals cannot be fully achieved simply through a HR briefing or a one-day orientation, socialising and

networking can embed these individuals and their families more firmly and quickly and allow them to forge new relationships

and personal networks.

An in-house buddy system or memberships in clubs/associations can create an environment which promotes social and business

interactions with locals and other expatriates.

Technology can also complement this as web portals can provide information, facilitate forum discussions, as well as offer an

avenue for the newly arrived talent to post questions on housing, schooling, overall unfamiliarity or cultural issues that may

not surface immediately upon arrival.

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3.7 Further Tax Deduction (FTD) Scheme

Introduced by the Government in 1998, the FTD Scheme is an option available to assist employers to defray the cost of

recruiting/transferring selected skilled professionals (P1, P2, PEP holders and Returning Singaporeans or PRs of equivalent

standing) from overseas to Singapore.

The ceiling for qualifying prescribed expenses incurred is SGD 15,000 per employee for the P1 employment pass holder and

SGD 5,000 per employee for a P2 employment pass holder. Where the P1 and P2 employment pass holder is relocating with

his/her spouse and unmarried children below 21 years of age, the expenses incurred for the one-way relocation airfare would

also qualify as deductible expenses, subject to a maximum of SGD 5,000 for spouse and SGD 2,500 for each qualifying child

up to a maximum of 2 children.

5NDERTHISSCHEMEEACHEMPLOYERISABLETOCLAIMFORQUALIFYINGRECRUITMENTANDRELOCATIONEXPENSESUPTOMAXIMUMOF3'$

275,000 per assessment year.

Employers cannot claim further tax deduction if:

they already enjoy Government grants, incentives or any other Government assistance schemes, which offset the

recruitment and/or relocation costs of global talent; or

the overseas employee is recruited through intra-company transfer. (Intra-company transfer is the transfer

between companies in the same group, which is defined for tax purposes to include subsidiaries

and associates)

Source: MOM website, Income Tax Act (Chapter 134, Section 14L)

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4 The Future Role of HR

The recognised importance of human capital to an organisations success in the current global business landscape would

suggest that the role of HR should move into a strategic position where HR professionals will partner the business tosupport its growth plans.

Has the HR function changed?

From the survey, we note that most Singapore companies continue to rely on HR generalists to manage their foreign

executives. We also note that outsourcing and shared services arrangements are less popular with companies in Singapore

when compared to western economies5.

Table 6

Responses PercentageManaged in-house by HR generalists 78.5%

Managed in-house by international assignment team 36.4%

Fully or partially outsourced to external vendors 21.5%

Managed in-house through shared services arrangement 14.9%

The top three reasons cited for not outsourcing are:

1. Relocation services not deemed necessary

2. Cost

3. Company has a well-established internal relocation support function

In addition, survey results also indicate that nearly 70% of the respondents rated improved communication and alignmentof strategies between HR and the business as the most important factor in enhancing global talent management. Improvedadministration processes and Training for HR team are rated as the second and third most important factors.

5 )NARESEARCHBY0W#3ARATOGAINCOOPERATIONWITH#RANlELD3CHOOLOF-ANAGEMENTTOGETHERWITHREPRESENTATIVESOFMULTINATIONALORGANISATIONSINTHE5NITED3TATES

5NITED+INGDOMANDCONTINENTAL%UROPEDATASHOWEDTHATOFTHETOTALEXPATRIATEMANAGEMENTCOSTSWEREOUTSOURCEDCOSTSINDICATINGTHATMAJORORGANISATIONS

in those regions used external expertise to a large extent.

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5 Managing a Mobile and Diverse Workforce

The Singapore based companies who participated in the survey Relocation practices for incoming global talent toSingapore conducted by MOM are evidently having to manage an increasingly diverse and growing group of foreign

executives in Singapore.

The survey data also showed that a large group of foreign executives are relocating to Singapore on local or local plusterms, where relocation benefits and assistance may not be as comprehensive as those offered to foreign executivesrelocating on the more traditional expatriate terms and conditions.

Being mobile has an impact on an individuals sense of security and stability. The familys well-being and assimilationinto Singapore, longer term career opportunities and financial risks are just some of the issues mobile employees grapplewith.

The increasing diversity of the workforce in Singapore, their distinct differences in culture, language, social and economicbackground and technical skills reinforces the need for Singapore based companies to focus on making the relocation

experience to Singapore a positive one for executives and their families relocating to Singapore.

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6 Glossary of Terms

Assignment allowances Cash allowances provided to assignees in relation to their international

assignment.

Assignment location; Host location The country the employee is deployed to work in other than the home country,during the assignment period.Also referred to as Host Country.

Departure management Assistance / Reimbursements provided by the company typically for disposalof car/ accommodation in the home location prior to the move e.g. early leasebreak, sale of car, home property rental/ management.

Educational counselors Professional school guidance who assist students in selecting appropriatecourses, schedule subjects and educational programmes according to theirinterests, aptitude and abilities. Services paid for by the company.

Foreign executive Professionals who are foreign nationals who have relocated to Singaporeeither on expatriate or non-expatriate terms. They should be in possession ofrecognized qualifications and skill sets and hold an Employment Pass.

Foreign executives on expatriate terms Foreign executives who are provided with comprehensive assignment related

benefits such as housing, schooling, tax assistance, mobility premiums etc.

Foreign executives on non-expatriate

terms

Foreign executives whose terms and conditions of employment in Singapore

would generally be in line with local terms but may reflect limited allowances

/ benefits such as housing and schooling.

Global talent Talent pool which includes foreigners as well as Singaporeans.

Guided home search Guided home search using qualified relocation consultant or housing agent

paid for by the company.

Guided school search Guided school search (e.g. visits to schools, assist in enrolment) using qualified

relocation consultant paid for by the company.

Home country Home country of the assignee prior to commencing the international

assignment or the country where the assignee retains home ties.

Home leave; Home visits Entitlement under pre-determined terms which allow employees and their

accompanying dependants (if applicable) to return to the home country for

holiday/vacation purposes.

HR briefings HR briefings to address relocation /reintegration issues relating to the

move, career, settling-in etc. When conducted by external consultants, more

emphasis may be placed on explaining the assignment policy andrelocation

vendor contacts and issues.

Intra-company transferees Foreign executives transferred from within the organisation and working in

Singapore on local or local plus terms, usually on a permanent basis.

In-house buddy system Support programme whereby existing foreign employees assist new foreign

employees to settle-down and integrate into the new environment.

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In-house support services In-house support services such as FAQ posted on company intranet,

welcome kit with destination information, vendor contacts etc.

Local-plus employee An employee who is transferred to a new location or directly hired into

a new location i.e. not the home country. The terms and conditions of

employment at the new location may not be totally in line with local

terms but may reflect certain additional benefits such as relocation,

housing and schooling.

Middle management Management of operations, typically reports to Heads of Business

units. Makes decisions that impact short term results. This refers to

managers and professionals/ executives.

Millennials Described in Wikipedia as Generation Y a term used to describesomeone born immediately after Generation X. There is much dispute

on the exact range of birth years. For the purpose of this document,

we refer to Millennials as those who entered the workforce after 1

July 2000.

Mobile employee An employee who is either an international assignee or local plus

employee working in a foreign country.

New foreign sourced hires on Foreign executives recruited directly from overseas into

non-expatriate terms Singapore and working on local or local plus terms.

Online relocation support services Online support services such as online relocation guides, online

cultural support and hotline services.

Orientation and settling-in programmes Specially designed programmes aimed at providing comprehensive

guidelines and practical tips on how best to settle-in. These

programmes are often conducted by external relocation consultants

and may include area familiarisation tours and setting-in services.

Outsourcing The use of an external party to carry out one or more internal

processes or functions.

Pay equity The philosophy according to which work judged to be equal or

similar should be equally rewarded, except for allowable differences

such as seniority, or merit. The concept has evolved to the present

understanding of equal pay for work of equal value to a company.

Per Diem A daily allowance to cover miscellaneous expenses incurred on meals,

transport and incidentals.

Permanent transferees Employees who terminate their home country employment contract

and transfer to the new locations terms and conditions on a

permanent basis.

on non-expatriate terms

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Pre-assignment familiarisation trip A customised exploratory trip, conducted prior to the transfer, to

provide an overview of the living conditions in Singapore

PwC IAS PwC International Assignment Services (Singapore) Pte Limited

Relocation allowances Typically a one-off payment made at the start of the transfer and/

or end of an assignment intended to compensate for the general

upheaval and incidental expenses associated with moving to another

country.

Repatriation The process of the international assignees return to his home

country.

Returning Singaporeans An overseas Singaporean or Singapore Permanent Resident who hasreturned to work in Singapore.

Senior management Leadership that requires the exercise of a high degree of independent

judgment in the development of company policy, business direction

and accountability for long-term results. This refers to the Heads of

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Business units.

Shared Services Consolidation and sharing of services by different units within an

organisation.

Spousal assistance programme Career assistance programme which typically includes resume writing

and career counseling.

Spousal allowance An allowance, typically paid lump sum by the company in recognition

of the career disruption experienced by the spouse and to cover for

expenses on development/language classes, career counselling etc.

Tax Assistance Tax briefing on local tax regulations and processes, and assistance in

preparation of tax returns by an external tax specialist.

Tax Equalisation Method to ensure that the assignee neither gains nor loses with

regards to income tax, as a result of undertaking an international

ASSIGNMENT5NDER4AX%QUALISATION THEEMPLOYERNORMALLYSETTLES

the employees actual tax liabilities in applicable tax jurisdictions

whilst withholding hypothetical tax equivalent to what the assignee

would have paid at home.

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7 Use of This Report

The data on relocation practices in Singapore which has been referred to in this report was collected through a

survey with 121 companies based in Singapore and PwC has not been independently verified, validated or audited

the data obtained via the survey. PwC makes no representations or warranties in respect of the accuracy of the

information obtained via the survey.

The survey data and report will be considered intellectual property of the Government of Singapore care of the

Ministry of Manpower and shall not be copied, reproduced, disclosed or transmitted in any form,or by any means

without prior written permission from MOM.

The contents of this report should not be construed as legal, tax or professional advice and readers should not

act on the basis of any matter contained in this report without seeking advice specific to their own particularcircumstances.

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MINISTRY OF MANPOWER

Study on Relocation Practices for Incoming Global Talent to Singapore

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