Host-Plus assignments have become a popular approach for international mobility, offering a middle ground between full expatriate packages and local terms. However, they aren't always the best fit for every situation, especially when it comes to high-hardship or volatile currency locations. As revealed in AIRINC’S latest policy & practice benchmark on Host-Plus Assignments, 21% of companies avoid using Host-Plus assignments in these challenging regions for good reasons.
Here's why Host-Plus assignments can be problematic in high-hardship locations and what companies should consider instead.
- Insufficient Compensation and Benefits
High-hardship locations often come with additional challenges such as safety concerns, limited infrastructure, extreme climates, or political instability. In these cases, a standard Host-Plus assignment, which offers only a few "plus" elements like housing, home leave, or education support, might not be enough to make the move attractive to employees
According to our latest benchmark, most Host-Plus assignments aim to create some equity with host location peers by offering fewer benefits than home-based assignments. However, in high-hardship locations, employees may require more comprehensive support, such as enhanced security measures, hardship allowances, or extra housing benefits, to compensate for the difficulties they might face.
- Volatile Currency Risks
One of the biggest challenges in high-hardship countries is dealing with volatile currency fluctuations. Since Host-Plus assignments are based on the host location's salary, employees may find their earnings significantly affected by sudden changes in exchange rates. This uncertainty can lead to dissatisfaction and may deter top talent from accepting assignments in these regions.
As highlighted in our recent benchmark survey, 16% of companies restrict Host-Plus usage to specific locations, partly due to these currency concerns. In contrast, a home-based assignment with a stable, home-country-linked salary can provide more financial security for employees in unpredictable markets.
- Social Security and Retirement Implications
Maintaining ties to an employee's home social security or retirement scheme can be challenging in high-hardship locations. Many companies prefer to keep employees on home-country social security schemes during Host-Plus assignments. However, doing so in regions with inadequate totalization agreements or infrastructure can be administratively complex and costly. The lack of seamless access to social security benefits can make Host-Plus assignments less appealing to employees who are conscious of long-term financial security.
- Health and Safety Considerations
High-hardship locations often require additional health and safety measures, such as access to international healthcare, emergency evacuation, and security services. Host-Plus assignments typically do not cover these extensive needs, making it harder for employees to feel secure in such locations. A home-based or fully expatriate package might be better equipped to handle these requirements, providing employees with comprehensive support and peace of mind.
When to Consider Alternatives to Host-Plus Assignments
While Host-Plus assignments offer a cost-effective solution for many international moves, they may fall short in addressing the unique challenges of high-hardship locations. In such cases, companies should consider alternatives like home-based assignments or enhanced expatriate packages that offer additional financial, security, and health-related support.
Host-Plus assignments have their advantages, but they are not always suitable for high-hardship or volatile currency locations. Companies need to carefully evaluate the demands of the destination country and the expectations of their employees to determine the most appropriate mobility approach. By doing so, they can ensure that their global mobility strategy is both effective and supportive, no matter where their talent is needed.
Read the highlights of our recent benchmark surveys here. If you are with a corporate company, please contact us to receive a copy of the full survey report.
Download the highlights to learn why one-way transfers and host-plus assignments are being leveraged, as well as the key markers of these approaches, including:
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Determining compensation and benefits for one-way transfers and host-plus assignments
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Relocation support for the move to the new location
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On-going assistance in the destination location
Watch Again - Webinar: Top Trends in One-Way Transfers and Host-Plus Assignments