As costs continue to rise in Singapore, what can HR do to support incoming foreign executives without blowing out the company expenses?
Figures taken from ECA International’s Cost of Living Survey show that Singapore is gradually getting more expensive with the country moving from ninth to eight place from 2014 to 2015.
“Singapore has continued to rise up our rankings as the impact of the weaker currency has been offset by relatively high levels of inflation…,’ said Lee Quane, Asian Regional Director for ECA International.
“[Where] companies provide cost of living allowances to their international executives assigned to Singapore, these will likely need to be raised in order to ensure that employee purchasing power can be maintained.”
However for expats expecting the traditionally generous packages, the landscape has changed due to new financial hardships for firms caused by current economic conditions.
Rising costs have also put added strain on firms. Employers need to consider whether it is worth bringing in a new foreign executive.
To strike a balance between rising costs for expats and the tight financial constraints for the business, more Singaporean firms are putting foreign employees on an ‘expat lite’ or ‘local plus’ package.
“This localised approach puts employees on a local peer salary, with benefits like housing and education on top of that,” Lorraine Jennings, principal and global mobility practice leader for the Pacific at Mercer, told HRD.
This means expat workers can still afford basics such as rental and schooling for their children without the firm going over budget.
Mercer has also spotted an increase in employers offering specialist end-to-end financial advice to their foreign staff – prior to arrival in Singapore, whilst working in the country, and when they return to their home countries.
“It all starts off with awareness – raising awareness of the issues and challenges faced by expats,” said George Mileski, financial advice team leader and principal at Mercer. “What we’ve seen is a lack of awareness of these issues and challenges that these expats face.”
“Expats can be time poor and they may not be entirely sure what they’re facing in a move overseas. They also usually don’t have the expertise or inclination to organise themselves financially.”
One major source of frustration for expats is a lack of access to support for the major financial decisions they have to make in the move, said Mileski.
Employers offering this kind of assistance will ensure their foreign staff can survive in Singapore’s increasingly expensive living environment.
Revealed: the most expensive cities for expats
Singapore relocations most expensive for expats, HR warned
Do expats actually earn more than locals in Singapore?