International assignments on the rise

May 24 2006 by Brian Amble Print This Article

Multinational companies are significantly increasing the number of international assignments they offer their staff, but the effectiveness of their expatriate policies varies.

Some 44 per cent of multinational companies report an increase in the number of international assignments to and from locations other than the headquarters over the past two years, according to the annual International Assignments Survey carried out by Mercer Human Resource Consulting.

The survey of some 200 multinational firms worldwide found that much of the increase in the number of international assignments is due to the growing use of short-term placements which have become more prevalent over the past few years.

"Short-term assignments are popular because they are generally more cost-effective than long-term assignments and they allow companies to transfer skill sets quickly and easily," said Yvonne Sonsino, a principal with Mercer in London.

"However, for short-term assignments to be successful, companies need to develop well-defined policies to manage costs and limit risks."

According to survey findings, while more than eight out of 10 multinationals send employees on short-term assignments, only about half (56 per cent) have formal policies in place for this type of assignment.

"When employees on short-term assignment arrive at their new international posting, management and colleagues in the host country often find it difficult to invest the time to help them understand local business conditions and culture.

"There needs to be careful management of the process to make sure both sides get the best out of what can still be a significant corporate investment and a significant personal commitment from the employee involved," Ms. Sonsino added.

The survey also reveals that the number of female expatriates has increased significantly, making up more than one in 10 (13 per cent) of such assignments today as opposed to 8 per cent five years ago.

North America and Asia/Pacific lead this trend, with women now comprising 15 per cent of North American companies' expatriate population and 14 per cent of those in Asia/Pacific.

Companies in Europe now lag other regions, with women accounting for 10 per cent of their expatriates in the most recent survey, compared to 7 per cent five years ago.

"Clients are telling us that diversity is among the big trends in HR management and gender diversity is part of this trend," said Ms. Sonsino.

"In many regions of the world, women are more and more eager to develop professional careers and their competencies are becoming more and more recognized. In expatriate programs management, the increased presence of expatriate women may strengthen the need for well-defined spouse support policies."

Cash incentives to compensate individuals for the inconveniences of being transferred continue to play an important role in encouraging employees to take assignments abroad, with fewer than a quarter of companies saying they do not provide such incentives. However, far more companies provide these premiums systematically for long-term assignments (73 per cent) than for short-term assignments (31 per cent).

"Financial incentives can help encourage employees and their families to move. Unsurprisingly, it's more challenging to get employees to accept long-term assignments than short ones, especially to difficult locations," explained Ms. Sonsino.

"Also, short-term assignments are more likely to be perceived as an integral part of an employee's career development."

Similarly, almost three-quarters of companies compensate employees for differences in living standards between the home and the host location.

The study also found that many multinationals provide programs to help expatriates and their families adjust to a new host location. Almost three-quarters provide language tuition and six out of 10 back this up with cross-cultural training.

More than three-quarters of North American and European provide further help, such as assistance with moving arrangements, visas, visits to the host country, consultation with a tax advisor, and interim accommodation.

However while four out of 10 companies globally provide expatriates with free housing, for North American companies, the figure is only half this.

"One of the main reasons that assignments fail is because expatriates and their families cannot successfully adjust to their new environment," said Gareth Williams, a worldwide partner in Mercer's Chicago office,

"Companies are recognizing the importance of providing support in advance of employee moves. Investment in language and cultural training, for example, can dramatically improve the chance that the international assignment will be a successful one."

But despite these efforts, employees and their families are often left to their own devices when it comes to integrating into the host community. Fewer than a third of companies said that they make any effort to introduce new arrivals to other expatriates, for example.

And astonishingly, only half of companies include spouse support in their international assignments policy, with one in 10 saying they are developing a policy on spouses and a similar proportion saying they handle spouse issues on a case-by-case basis.

Yet as separate research has found, the potential impact on their partners' careers is the most common reason for employees to turn down an otherwise career-boosting opportunity to work abroad.

"Although companies realize the importance of integrating employees and their families into the local community, lack of time and cost constraints often force them to concentrate their efforts on more practical, day-to-day employee support," Gareth Williams added.