EXPATRIATE COMPENSATION  LOCALISATION

Singapore – More companies are using the salary figures of the host country to benchmark the compensation packages of their expatriates assigned to Singapore.

Twenty-one percent of companies base their expatriates’ salaries on the average local salaries when they are sent to Singapore in 2009, a 6% increase from 2008.

In a expatriate market pay survey conducted by ECA International, it also found that there is a decrease in the use of home-based and hybrid compensation as more expatriates are being sent to Singapore for long-term assignments, instead of temporary ones. An 8% decrease in companies who used home-based and hybrid approaches in 2009 was noted, as compared to the data in 2008.

A hybrid approach refers to a compensation that is sufficient to offset any form of adaptation to the host country that the expatriates are being sent to.   

The findings hint at a likely increase in expatriates permanently assigned or localised in Singapore. Companies are likely to be utilising a host-based approach to benchmark the salaries of those expatriates in order to be more cost-effective.

Lee Quane, regional director in Asia, of ECA International, believed that the small local talent pool is driving the number of expatriates being assigned on a long-term basis to Singapore.

Quane also commented that foreign expatriates generally like to stay in Singapore as there are career advancement opportunities and a diverse culture which is easily adaptable. Hence, local salaries are sufficient to entice them to stay.

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