Mercer's latest industry survey shows that 44 percent of multinationals have increased their quota of international assignments, largely through short-term transfers. However, only 56 percent of companies have policies for this type of placement.

18 May 2006

AMSTERDAM - Mercer's latest industry survey shows that 44 percent of multinationals  have increased their quota of international assignments over the past two years, largely through short-term transfers. However, only 56 percent of the participating companies have drawn up policies for this type of placement.

Much of the increase in the number of international assignments is due to the widespread use of short-term placements, which are more cost-effective than long-term assignments, plus they allow companies to transfer skill sets quickly and easily, reports Mercer Human Resource Consulting in their 2005/ 2006 International Assignments survey.

Over 80 percent of the companies surveyed said they placed assignees on short-term assignment types, but only 56 percent of companies have drawn up formal policies.

Those companies not having policies in place are courting assignment failure, Mercer suggests.

"For short-term assignments to be successful, companies need to develop well-defined policies to manage costs and limit risks," said Yvonne Sonsino of Mercer.

More help needed post-departure

Recognising the need to support their staff, 60 percent of companies provide cross-cultural training, but the critical process of integration once in the host country is typically left to employees.

"Although companies realise 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," said Gareth Williams of Mercer.

More European females please

Along with the increasing number of international assignments from subsidiary to subsidiary, globally, the percentage of female expatriates has increased significantly in the past five years, from 8 percent to 13 percent, reveals the survey.

Leading this trend is North America, with women making up 15 percent of North American companies’ expatriate population and Asia/Pacific follows with 14 percent.

The most dramatic change in the percentage of female expatriates has occurred among companies based in Latin America. Five years ago, only 1 percent of their expatriate employees were female, but today the figure is 11 percent.

European companies, however only show an increase from 7 percent to 11 percent over the past five years.

Hopefully, "in expatriate programme management, the increased presence of expatriate women may strengthen the need for well-defined spouse support policies," said Sonsino, who sees gender diversity as a reflection of the current focus on diversity management by HR professionals.

Cash incentives used for long-term

Mobility premiums - cash incentives to compensate individuals for the inconvenience of being transferred - continue to play an important role in encouraging employees to go on assignment. However, although 73 percent of companies provide these premiums systematically for long-term assignments only 31 percent do so for short-term assignments.

"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," said Sonsino.

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

Repatriation recognised

Recognising that repatriates are often key employees of an organisation, the survey found that 60 percent of the participating companies include repatriation terms in the international assignment policy.

As part of the measures taken to facilitate reintegration of expatriates back to their home country, about a third  of companies require that employees take home leave and visit the home office before they finish their assignment, and slightly more than a quarter regularly update employees on home country developments.

Localisation and spouse policies at halfway house

When 'localising' their expats, often a sensitive issue to deal with because the overall level of compensation can drop when this happens, only about half the companies surveyed have a formal policy for this process, with the remaining companies handling the situation on a case-by-case basis.

The survey also showed that around half of the participating companies include spouse support in their international assignments policy; 11 percent do not have a policy but are developing one, and 12 percent handle spouse issues on a case-by-case basis.

ROI remains an area to work on

Mercer reports that while the majority of companies surveyed believe they have a general understanding of the cost of their international assignments, only a few are in a position to measure the specific expense, resulting value, and, ultimately, return on investment from such postings.

[Copyright Expatica 2006]