Less disruption to family, career makes shorter assignments attractive
Despite concerns about the costs of relocation, the number of international assignments continues to rise, especially short-term and commuter assignments.
North American companies lead the world when it comes to short-term assignments, according to Mercer’s 2006 International Assignments Survey, which studied more than 200 multinational organizations in four main geographical regions: Europe, North America, Latin America and Asia & Pacific.
It found while 84 per cent of all companies in the survey reported using short-term assignments, 100 per cent of North American companies said they used them. Further, 80 per cent of North American companies reported having developed a special policy for this assignment type versus slightly more than one-half for European companies.
North American companies have also seen the greatest increase in the quantity of short-term assignments, with 77 per cent of companies increasing the number of short-term assignees and only three per cent lowering them.
Many pros to short-term assignments
Short-term and commuter assignments generally avoid the move of a whole family. They are one alternative to the career and education disruptions that traditional long-term assignments can provoke, increasing acceptance by employees and decreasing the risk of assignment failure — a win-win situation for both the employee and employer. Companies generally find it easier to manage these assignments and motivate employees to accept them.
Short-term assignments typically last six to 12 months, with the employee remaining under a home-country contract. They tend to be project-oriented with one specific goal and are used by companies that need to transfer skills, know-how and resources to various locations quickly and easily.
Except in North America, where almost two-thirds of companies provide higher per diems or goods and services allowances for accompanied short-term assignees, most companies surveyed place the responsibility for the accompanying family fully on the employee. Overall, 46 per cent of companies report they never allow family to accompany the employee on short-term assignments.
However, North American companies are bucking this trend as only 26 per cent impose this restriction and in 22 per cent of instances the family always accompanies the employee. North American companies also report a higher success rate for short-term assignments than companies in the rest of the world.
Designing the assignment policy
As with any policy, a holistic approach is best when developing a short-term assignment policy. The policy typically defines the intent, or spirit, of the financial and other arrangements applicable during and after a temporary assignment. It spells out the provisions that apply in all types of circumstances.
The policy should also address what is not provided in order to control expectations and minimize bartering. The provisions of the policy that apply to a specific employee, going on a specific assignment, to a specific country should be documented in a separate letter of agreement.
In many organizations, this letter is intended to protect the company and the employee in the event of any questions or challenges on entitlements or obligations in the future and it usually supersedes the more general terms of the policy document.
Assigning employees overseas is not new, but issues surrounding these assignments have changed dramatically over the past several years. With increasing international trade and corporate expansion and growth, employers need to be flexible in order to respond to market demands and move key employees where they are needed most.
However, international assignments have become a harder sell to employees because of a perceived rise in political instability and concerns regarding their personal security and well-being while on assignment.
Short-term assignments make good business sense because:
• costs are lower;
• the risk of assignment failure is lower;
• assignment goals are more specific and results are more readily measurable;
• employees find them less disruptive for their family and to their career development; and
• the gender bias is breaking down with more women taking on short-term assignments.
Liam Dixon and Margaret Sim are principals with Mercer in Montreal who consult in international benefits. Liam can be reached at [email protected] and Margaret can be reached at [email protected].
RELOCATION CHECKLIST
Planning and preparation make moves successful
A smooth relocation will help the employee quickly become established in the new role and new location. The mechanics of moving an employee to a new country require thorough planning. The following checklist provides a framework.
Preliminary information and services
•A comprehensive information package on the assignment, including a written description of the position.
•Language and cultural training.
•Pre-assignment medical ¬assessment for the employee.
Travel documents
•Passport.
•Work permits and visas.
•Overseas driving license.
•Business cards.
•Inoculations and vaccinations.
•Key person insurance, where appropriate.
Financial arrangements
•Assignment contract.
•Formal release from existing position.
•Banking arrangements with ¬financial institutions and letters of credit for the employee, where required.
•Taxation advice.
Leaving home
•Travel arrangements.
•Travel insurance.
•Employees typically maintain their home country residence for the duration of a short-term assignment so the employer is not required to pay for any storage costs for household goods and personal effects.
Accommodation
•The employer typically provides furnished accommodations in the host country and covers utility payments and other expenses associated with this accommodation.
Vacation
•The employee is typically entitled to the normal home country vacation allowance. The employee is required to conform to the standard work week in the host country. Public holidays will be the holidays designated by the host country.
Home leave
•Typically, the employer provides opportunities to reunite the family periodically during the assignment.
•The employer will provide expense guidelines for employees traveling home or families traveling to the host country.
Rest and recreation leave
•In addition to home leave, the employer could also offer periods of rest and relaxation for hardship locations. Typically, travel would remain within the neighboring cities.
North American companies lead the world when it comes to short-term assignments, according to Mercer’s 2006 International Assignments Survey, which studied more than 200 multinational organizations in four main geographical regions: Europe, North America, Latin America and Asia & Pacific.
It found while 84 per cent of all companies in the survey reported using short-term assignments, 100 per cent of North American companies said they used them. Further, 80 per cent of North American companies reported having developed a special policy for this assignment type versus slightly more than one-half for European companies.
North American companies have also seen the greatest increase in the quantity of short-term assignments, with 77 per cent of companies increasing the number of short-term assignees and only three per cent lowering them.
Many pros to short-term assignments
Short-term and commuter assignments generally avoid the move of a whole family. They are one alternative to the career and education disruptions that traditional long-term assignments can provoke, increasing acceptance by employees and decreasing the risk of assignment failure — a win-win situation for both the employee and employer. Companies generally find it easier to manage these assignments and motivate employees to accept them.
Short-term assignments typically last six to 12 months, with the employee remaining under a home-country contract. They tend to be project-oriented with one specific goal and are used by companies that need to transfer skills, know-how and resources to various locations quickly and easily.
Except in North America, where almost two-thirds of companies provide higher per diems or goods and services allowances for accompanied short-term assignees, most companies surveyed place the responsibility for the accompanying family fully on the employee. Overall, 46 per cent of companies report they never allow family to accompany the employee on short-term assignments.
However, North American companies are bucking this trend as only 26 per cent impose this restriction and in 22 per cent of instances the family always accompanies the employee. North American companies also report a higher success rate for short-term assignments than companies in the rest of the world.
Designing the assignment policy
As with any policy, a holistic approach is best when developing a short-term assignment policy. The policy typically defines the intent, or spirit, of the financial and other arrangements applicable during and after a temporary assignment. It spells out the provisions that apply in all types of circumstances.
The policy should also address what is not provided in order to control expectations and minimize bartering. The provisions of the policy that apply to a specific employee, going on a specific assignment, to a specific country should be documented in a separate letter of agreement.
In many organizations, this letter is intended to protect the company and the employee in the event of any questions or challenges on entitlements or obligations in the future and it usually supersedes the more general terms of the policy document.
Assigning employees overseas is not new, but issues surrounding these assignments have changed dramatically over the past several years. With increasing international trade and corporate expansion and growth, employers need to be flexible in order to respond to market demands and move key employees where they are needed most.
However, international assignments have become a harder sell to employees because of a perceived rise in political instability and concerns regarding their personal security and well-being while on assignment.
Short-term assignments make good business sense because:
• costs are lower;
• the risk of assignment failure is lower;
• assignment goals are more specific and results are more readily measurable;
• employees find them less disruptive for their family and to their career development; and
• the gender bias is breaking down with more women taking on short-term assignments.
Liam Dixon and Margaret Sim are principals with Mercer in Montreal who consult in international benefits. Liam can be reached at [email protected] and Margaret can be reached at [email protected].
RELOCATION CHECKLIST
Planning and preparation make moves successful
A smooth relocation will help the employee quickly become established in the new role and new location. The mechanics of moving an employee to a new country require thorough planning. The following checklist provides a framework.
Preliminary information and services
•A comprehensive information package on the assignment, including a written description of the position.
•Language and cultural training.
•Pre-assignment medical ¬assessment for the employee.
Travel documents
•Passport.
•Work permits and visas.
•Overseas driving license.
•Business cards.
•Inoculations and vaccinations.
•Key person insurance, where appropriate.
Financial arrangements
•Assignment contract.
•Formal release from existing position.
•Banking arrangements with ¬financial institutions and letters of credit for the employee, where required.
•Taxation advice.
Leaving home
•Travel arrangements.
•Travel insurance.
•Employees typically maintain their home country residence for the duration of a short-term assignment so the employer is not required to pay for any storage costs for household goods and personal effects.
Accommodation
•The employer typically provides furnished accommodations in the host country and covers utility payments and other expenses associated with this accommodation.
Vacation
•The employee is typically entitled to the normal home country vacation allowance. The employee is required to conform to the standard work week in the host country. Public holidays will be the holidays designated by the host country.
Home leave
•Typically, the employer provides opportunities to reunite the family periodically during the assignment.
•The employer will provide expense guidelines for employees traveling home or families traveling to the host country.
Rest and recreation leave
•In addition to home leave, the employer could also offer periods of rest and relaxation for hardship locations. Typically, travel would remain within the neighboring cities.
