Companies send fewer employees abroad

10th July 2009, Comments 0 comments

Companies are cutting back on expats; preferring to relocate older more experienced employees, says report.

As the global recession sets in and corporate earnings shrink, multinational companies are responding through sending fewer employees on international assignment than in past years according to the latest annual report from Brookfield Global Relocation Services.

Sixty-seven percent of the 180 multinational firms surveyed said they will either decrease the number of employees they plan to relocate in 2009 or maintain the number of employees they relocate. A quarter of companies in this category said that their expat populations would decrease while 42 percent expected no change, which is the most pessimistic outlook the survey has recorded since 2001.

Younger employees kept at home

Another marked trend is for companies to send older and more experience employees on international assignment because they present a lower risk of assignment failure. Only nine percent of companies were in the 20-29 year age bracket, giving the lowest percentage of younger expats on the job in the survey’s 14-year history.

Spousal employment hits all time low
The report showed that accompanying spouses were less likely to have work before the assignment only, during the assignment only and both before and during the assignment. This links in with the top reason for assignment failure; spousal dissatisfaction.

Family concerns main reason for assignment refusal
The most cited reason for assignment refusal – with 92 percent of companies reporting this-- was family concerns with the most critical challenges facing families being adjustment, partner resistance, children’s education, cultural adjustment and location difficulties.

China is top expat destination

China topped every destination ranking in the survey for the first time, followed by the US, the United Kingdom, Singapore and Switzerland. China was also ranked as the top emerging destination followed by India and Russia.

Paradoxically, China was seen as presenting the greatest challenges to both international assignment managers and assignees due to the difficulty in finding suitable homes and schools, accessing medical care, immigration formalities, tax compliance, communication and knowledge of international regulations, the remoteness of the destinations and increasing costs. India ranked second and Russia third in terms of presenting the greatest relocation challenges.

The survey showed a noticeable move by companies to control costs with the number one relocation challenge being the overall cost of assignments, followed by finding suitable candidates  and controlling policy exceptions.


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