Localisation is the changing of an employee’s expatriate status -- in whole or in part -- to host location employment terms and conditions, including compensation and benefits. This frequently results in lost income for the employee and, thus, creates challenges for HR professionals.

ORC Wordlwide's survey aimed to highlight trends in international localisation practices, in order to assist in the development of future policies. The survey scored highly for methodology and was ranked fifth in the Expatica HR 2007/2008 Industry Survey Awards.

The survey covered 285 participating companies, located in the Americas (55%), Europe (34%) and Asia (11%). One-third of participants employed fewer than 50 expats, 28 percent between 50 and 249 expatriates, and the remaining 26 percent employed 250 or more.

The group represents a wide range of industries, with most in the banking, financial services and insurance industry (11.5%), followed closely by the `all other manufacturing’ industry (10.7%), consumer products (9.6%) and pharmaceutical (6.4%).

The 285 companies have a total staff of more than 13 million employees, of which 89,009 are expats, and 6,333 employees localised over the last two years. On average, companies with fewer than 50 expats localised five employees over the past two years; those with 50 to 249 employees localised 14 and those employing 250 or more localised 72.

Some of the key findings are as follows.

Localisation is on the increase
Over the last two years, 48 percent of participants have noted an increase in localisation and 57 percent project an increase over the next two years. This is an increase from 2004, when 40 percent noted and 52 percent projected the increase.

Where and why do employees choose to localise?
The number one reason among participants for choosing to localise is that the employee has expressed a desire to remain in the host location. However, for companies with fewer than 50 expats, the top reason was that the employee had a skill set that was needed long term in the assignment location.

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