Home leave allowances: why now's a good time to switch

    Oct 19, 2021 @ 08:29 AM / by Mike Wincott

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    As autumn sets in and the days get shorter, the thoughts of many assignees turn towards their plans for the holiday season and booking their home leave trip. Likewise, the thoughts of many global mobility teams also turn towards home leave. For some, it is a daunting prospect with tracking all those trips, reviewing expenses and managing reimbursements; for others, it’s about planning for next year, setting home leave allowances and communicating them to the assignees.

     

    Over the last five years, there has been a steady transition from direct booking of flights and reimbursements to the use of cash allowances.  It seems that the trend is accelerating this year. Since the end of the summer, we have seen a big uptick in companies switching to cash allowances in preparation for setting next year’s home leave budgets.  

    There are a combination of factors driving the switch to home leave allowances:

    • Administrative ease

    Many companies don’t want to deal with the administrative burden associated with reimbursements or booking flights. With mobility teams stretched, resources are better focused on providing the business with more value-add support.

    • Employee Experience

    Empowering assignees to tailor their assignment benefits to their needs is a priority for many mobility programmes. A cash home leave allowance gives the assignee the flexibility to meet their family’s needs. For example, the spouse’s family may be in another country, they may decide to fly family to the host location or use the budget to trade down and fly more frequently.

    • Budgetary certainty

    Cost predictability was the top business request in this year’s Mobility Outlook Survey. The home leave allowance is defined at the beginning of the year and can be accurately budgeted for. With direct booking and reimbursements, the business won’t know the cost until after the event.

    • Cost control

    Many companies see the global spend on home leave go down when they switch to an allowance. Allowances are usually set based on the assumption that the assignee will book tickets well in advance, just like you or I would. This eliminates last minutes bookings which are often significantly more expensive. The allowance is designed to cover a flight booked 2-3 months in advance. If the assignee leaves it until early December to arrange flights home for Christmas, the incremental cost of that delay becomes the assignee’s responsibility.

    These are the main reasons that have driven the move to home leave allowances over the last few years; however, this year there is also something else. In talking to companies that are making the switch this year, the extra incentive to convert to cash home leave allowances is the goal to help assignees better address uncertainty. As border closures are still quite fluid, global mobility teams want assignees to feel more empowered. With an allowance, they have the ability to adapt more readily to a rapidly changing situation.

    If you’re thinking of switching to home leave allowances next year, the next few weeks offer the perfect window of opportunity to put everything in place. If you’re interested to learn more, don’t hesitate to get in touch.

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    Topics: Business Travelers, Home Leave, Airfare, Global Mobility, Workforce globalization, Airports, expatriate travel, Balance Sheet Manager, Holidays, Airfare Database, Deliver home leave, international, Compensation, Expatriates

    Mike Wincott

    Written by Mike Wincott

    Mike Wincott: Senior Director Client Solutions, EMEA Mike joined AIRINC in 2014 and leads our advisory services practice in EMEA. Mike works with global organisations to devise mobility programmes which support overall company strategy, with a particular focus on mobility compensation, operational and policy solutions. Before joining AIRINC, Mike spent 15 years at Deloitte, the last four of which he was the Partner leading Deloitte’s Global Mobility Compensation Services (GMCS) practice in Europe. Having been an expatriate himself, Mike and his family localised in Belgium in 2007. Mike started his career as a tax advisor with Arthur Andersen after gaining a BSc (Hons) in Business Administration from Bath University. He is an alumnus of IMD in Lausanne, Switzerland.