Covering the risks of overseas assignments

Calling staff into potential danger zones might be about increased pay but it also means giving employees commensurate benefits protection, says Bea Oaff

If you read nothing else, read this …

To attract staff to global hot spots, an organisation’s benefits package must be competitive.

Security benefits must be a priority to minimise risk.

Employees should be briefed to remain vigilant and emergency evacuation or assistance procedures put in place.

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It’s one thing to send employees to work in a potential danger zone, it’s another thing to calculate how to reward them for it. After all, postings to countries such as Thailand may seem like a dream on paper, but this can quickly turn into a nightmare if staff become caught up in civil unrest or terrorist activity.

Providing extra benefits for expatriates working in places that pose physical danger is one way to compensate them. The good news for benefits professionals is that guidance on what to offer is available.

According to the Expatriate and third-country national benefits survey published by Mercer HR Consulting in December last year, reward packages for expats are growing in status.

James Ridings, director of global staffing for engineering and construction firm Parsons Corporation, which has won US government contracts for projects in Kosovo, Bosnia-Hercegovina, Saudi Arabia, Iran and Iraq, estimates employees sent to such locations can expect to see a corresponding boost to their pay packets: "People can triple their income."

As may be expected, security is a key concern for employees based in remote or troubled locations. For starters, think personal bodyguard, an armoured or chauffeur-driven vehicle and a 24-hour intelligence service monitoring existing and emerging threats. "Almost all organisations immediately hire a local security firm," adds Ridings.

Some employers also provide accommodation inside a secure gated community for their staff. Carrying out risk assessments and organising emergency evacuations, meanwhile, is common practice for others. According to the Mercer survey, almost two-thirds of respondents currently offer emergency assistance or evacuation perks as part of their expat offer.

A good standard of medical cover or healthcare benefits, often with additional insurance policies is equally vital. According to the Expatriate and third-country national benefits survey, business travel accident, and accidental death and dismemberment insurance are now offered almost universally by organisations with staff working in less-than-stable locations.

Coverage of healthcare benefits also extends much further than those offered to UK-based staff. Most expats, for example, can extend cover to their spouses and families, more often than not at their employer’s expense. Some situations employees may be exposed to will also be of a relatively sensitive nature, requiring employers to provide services such as counselling and aftercare.

Pension provision, meanwhile, can be a grey area in some situations. If a worst case scenario occurs and an employee is kidnapped, for example, should their pension continue to accrue? Although it may seem like the least of their worries, in some kidnap cases pension benefits have stopped accruing. If employees remain on the company payroll throughout, however, their pension fund should continue to grow as pension benefits are typically linked to employment.

Whatever employers choose to offer, Peter Blake, a principal at Mercer, appreciates that there is no single universal solution to the conundrum. "Setting and managing benefits for expatriates is an extremely complex undertaking. Keeping approaches fair and consistent globally is very challenging, especially since the one-size-fits-all approach is no longer suitable." But, arguably, the need to do so has rarely been more imperative. As Ron Baulding, Parsons’ manager in Baghdad, explains: if employers don’t get it right "people just won’t come back"