With the overall costs of international education rising dramatically (the ExpatFinder International School Fees Survey 2018), we see more and more long-term assignees placing their children in local schools. This is also exacerbated by many companies removing or limiting their education benefits and the amount of mobility allowance provided.
44% more white students were enrolled in Hong Kong’s public schools compared to 2013
With this trend, it is no wonder that a recent New York Times article reported that in 2018, 44% more white students were enrolled in Hong Kong’s public schools, according to the local education bureau, compared to 2013. The report noted that even as expatriate packages decline in the expensive city, prices at international schools have increased due to a growing demand by wealthy locals for international education for their children.
So, how could companies enhance that critical education benefit in their relocation policies even as they face mounting pressure to control costs? We spoke to over 50 global companies to give you a big picture of what education-related expenses are typically covered.
Over 80% of companies say they cover international education costs for a limited number of years in the assignment
1 - Suitable Public Education is Still Preferred
While a vast majority (over 80%) of companies say they cover international education costs for a limited number of years in the assignment, a number of these companies say this is only provided if the public education system in the host country is deemed unsuitable. This means if companies are relocating employees to countries like the US, Britain, Canada, Australia, New Zealand, Singapore and Hong Kong where non-citizens can quickly gain a place in suitable public schools, they are likely to expect their talents to choose state education rather than the pricier international option.
Any amount exceeding the maximum will be an out of pocket expense for the employee
However, for countries where private schools are the only viable education, expat executives, who are usually senior, are given a maximum value per child (generally up to 3 children) up to a certain age, which is typically 18. As with all allowances, any amount exceeding the maximum will be an out of pocket expense for the employee. The companies we polled said that their employees are free to use this for international boarding schools in the home country or their country of choice.
2 - Fringe Costs Not Covered
Even though international or private school tuition and enrolment fees are covered by the companies we poll, a fair number of education-related costs are not. These often include the costs of books, meals, uniforms, transportation and extracurricular activities.
Many international schools request for large retainer fees or debentures that are payable once the employee’s child is offered a place in school
It is important to note that in addition to tuition fees, many international schools, particularly in Hong Kong and China, request for large retainer fees or debentures that are payable once the employee’s child is offered a place in school. Such payments will not be refunded until after the child leaves, and they are often a significant value which is not covered by most companies, though some will provide a loan for that amount to their employees.
Companies typically rely on their relocation service providers or local education advisors to review the local environment
3 - “Adequate” Education Usually Undefined in Policy
Many of the companies we surveyed say that their global relocation policies do not explicitly define what is “adequate” education. Instead, these companies typically rely on their relocation service providers or local education advisors to review the local environment before deciding on whether local or state school is suitable.
A primary criterion of "adequacy" is whether a child of average ability, upon completion of a grade, or its equivalent, can enter the next higher grade in a public school back in the employee’s home country. Continuity of curriculum and ease of assimilation back to the home country are also significant factors of consideration for the provision of international education. On a case-by-case basis, primarily to address language barriers, some companies cover private language lessons in the host country language to help an employee’s child better integrate into a local school.
Employees are also encouraged to do thorough research into the local education system of the destination country to decide if it is the right fit for their child
To encourage open communication with their assignees, some companies encourage their talents to understand what is included in their relocation package and track market data concerning international and state education in the destination country. Employees are also encouraged to do thorough research into the local education system of the destination country to decide if it is the right fit for their child. For instance, they could consult the local education bureaus and join Facebook groups for expat parents with children in local schools to understand whether rote, exam-oriented learning or more meaningful, project-based learning is favoured in local schools.
By proactively organising sessions with in-country education advisors for their overseas assignees, some companies arm their talents with the relevant facts to better utilise their lump-sum relocation allowance to cover the education of their choice for their children.