Cultural Differences Challenge Multinationals’
Expatriate Housing Policies

There are marked differences of emphasis in the policies companies from different parts of the world adopt towards expatriate housing. Many European and Asian based companies assume that employees going abroad who own their own homes will probably not want to sell or rent them for a mixture of cultural, legal and family reasons. For instance, in Asia, assignees may well have shared their home with extended family. U.S. Companies on the other hand, typically assume that assignees are much more open to selling or renting out their homes. This situation creates a very complex challenge for any multinational trying to establish a consistent global housing policy for its expatriates.

The Global Survey of Expatriate Housing Policies, conducted jointly by TheMIGroup, the Employee Relocation Council and Organization Resources Counselors, Inc. (ORC), surveyed 557 multinational organizations in a wide variety of industries; 374 based in the Americas, 112 in Europe/Middle East, and 71 in Asia, employing a total of 83,681 expatriates. The study found that 76 percent of respondents listed “establishing appropriate housing-cost guidelines” as the key issue they are facing in managing expatriates’ moves. “We were not surprised when survey respondents overwhelmingly rated this issue as the most difficult they face in managing the costs of expatriate housing programs,” says Roger Herod, senior vice president of ORC. “Finding suitable rental housing can be problematic in many locations and arouses more emotion in expatriate families than most other relocation issues”.

Specific differences in practices related to expatriate housing that varied by the region of response include:

• Forty-four percent of European companies and 57.1 percent of Asian companies provide free housing to employees on expatriate assignment, compared with only 20.6 percent of firms in the Americas, which are much more likely to deduct a housing-cost contribution from expatriates.
• Slightly more than two thirds of companies in the Americas provide some level of financial support to expatriates to sell their homes, compared with only 51.4 percent of Asian companies and 34.9 percent of European companies.

Managing relocation costs was clearly a significant concern for most multinationals worldwide. The need to control household goods shipment and storage costs was cited as a specific problem by many multinationals. Both of these are high expense areas where limiting the amount of furniture to be shipped or stored can result in significant savings for the company. However, many organizations do not establish clear limits; for example, almost half the companies surveyed to not limit the amount or length of time they will store expatriates’ household goods that are not shipped to the assignment location.

Contact TheMIGroup to obtain copies of the study.

TheMIGroup is a private company owned entirely by its working management group. In business since 1978, TheMIGroup provides a full range of Assignment Management Services to the global corporate community. Headquartered in Toronto, TheMIGroup has 13 branches spanning the North American continent as well as offices in Europe and the Far East.

The Employee Relocation Council, headquartered in Washington, D.C., is the association for workforce mobility, offering its members training opportunities, publications and articles, the latest immigration law information, and a variety of information resources.

Organization Resource Counselors, Inc., is a management consulting firm that offers consulting and data services for expatriate and local compensation, linked to overall human resources and organizational strategies, policies and practices.