Expat assignments in New Zealand are getting cheaper. As result, lower-level international talent assignments to local offices of multinationals are likely to increase.
According to Mercer’s 2019 Cost of Living ranking, Auckland and Wellington have become significantly cheaper expat destinations.
"While the actual cost of living in the Pacific has not fallen, the exchange rate is a key factor when calculating expatriate packages. As a result, our major cities in both Australia and New Zealand are becoming increasingly attractive as locations for international businesses to send expatriates," says Karla Costa, of Mercer Global.
Global and regional HQs will be seeing new value in expat assignments to New Zealand.
While senior expat roles here are limited, it’s now a viable location for cost-sensitive assignments like:
career development postings
early-career experiential programmes and international graduate programmes.
short term secondments, driven by business cases in favour of basing projects here rather than more expensive locations.
HR teams in local offices of multinationals will need to gear up.
Here are the factors to consider:
1. Worldwide global mobility provision contracts.
Multinational parent companies usually have a global provider and may expect their New Zealand operation to slot into this arrangement.
It’s important to assess the quality of service delivered for expats moving to New Zealand. Given the small volume of expat traffic and distance from major markets, there can be significant variation between Australasia and other parts of the world.
Well-run global mobility programmes have a hugely positive impact on the expat employee experience and speed to productivity. Done badly, they suck up the local HR team into solving problems with everything from visa delays to finding housing.
Critical questions to ask are:
Is assignment management done in New Zealand or offshore?
What is the level of understanding about the housing, schooling, lifestyle in New Zealand?
Will you have full access to all tech platforms and dashboards?
Who are the local providers for shipping, resettlement services, tax and immigration?
2. Internal HR capacity
There’s huge variation in how New Zealand businesses run global mobility in-house. A minority have a dedicated global mobility team. Most delegate responsibility to either Recruiters, HR Business Partners, HR Operations, Reward or Talent.
How is this going to work if numbers of expats suddenly increase?
If in-house provision is the preferred model, appointing a Global Mobility Coordinator to manage logistics like airfares and activating Resettlement Service Providers or Immigration Advisors may be the way to go. Alternatively, a good locally-based external global mobility management provider can take much of the load.
3. Life for expats in New Zealand
Kiwis know that our homeland is a great place to live and bring up kids
But put yourself in the shoes of an expat relocating here from offshore.
They probably have little idea about what to expect here. And the traditional infrastructure supporting expat families in expat hubs like Singapore, Amsterdam or New York doesn’t exist here. There are no true international schools or national clubs and renting is not the dominant feature of our housing culture.
Expectations often need to be re-set, and there is lot of systemic and cultural adjustment required even for families who have experienced numerous postings in other parts of the world.
Using expert resettlement services to establish expats and their families in New Zealand has significant value for their happiness and wellbeing. Numerous studies reveal that family is the number one reason why international assignments fail or succeed. Managing this risk is crucial.
4. Duty of care
Dealing with new assignment types, often less senior than the traditional expat model, can be a challenge.
In particular, there are potential liability issues around lump sum payments for global employees.
Giving a short-term assignee a sum of money and leaving it to them to choose and organize their own accommodation may meet NextGen demands for flexibility and customization.
But is the employer, who sent the individual on the assignment ultimately responsible for their safety and wellbeing if they end up in a dangerous position in a dodgy Airbnb because they didn’t know their host city?
Showing hospitality and caring about others is the way Kiwis treat each other. Wouldn’t it be great if we could work together to bring that level of service to expat talent joining your business?
Bridget is Principal at Mobile Ltd. For efficient, New Zealand-specific global mobility management and service delivery contact us at email@example.com.