Survey Cites Increase in International Short-Term Assignments
September 6, 2006
Cost reductions no longer primary driver for shift to more short-term posts
New York—Short-term expatriate assignments of 3 to 12 months have increased among multinational employers, according to a majority (60%) of participants recently surveyed by ORC Worldwide, TheMIGroup, and Worldwide ERC. The 2006 Survey of Short-term International Assignment Policies, which polled more than 530 North American, European, and Asian-based multinationals, named China, India, Korea, and Vietnam as some of the popular destinations for such short-term posts. The survey was a follow-up to similar studies conducted in 2000 and 2003.
Under continual cost-cutting pressure, HR managers have looked in recent years to international assignment programs to shave expenses. But cost reduction is no longer the primary driving force in the ongoing shift to shorter assignments from the more traditional expatriate assignments that last a few years. “In particular, short-term assignments today are useful in completing specific projects (80.4 percent) and transferring knowledge (72.5 percent),” according to Geoffrey W. Latta, Executive Vice President of ORC Worldwide. “They also offer a potential solution in situations where dual-career issues inhibit an employee from accepting a full expatriate assignment.”
As shorter assignments increase in popularity, managing them has become a significant challenge for HR and business unit managers. A key difficulty reported by 45.2 percent is controlling assignment length. “When a short-term assignment extends beyond the predetermined duration, it inevitably leads to other challenges,” says Latta, “such as ensuring tax compliance with host-location laws (45.8 percent) and complying with immigration regulations (27.3 percent).”
Since 2003, there has been a 7.8 percentage point increase in the number of companies not offering incentives for short-term assignments. At present, more than half (57.3 percent) of the participants do not pay incentives. This figure is highest for Asian-based organizations (69 percent) and lowest for those based in Europe and the Middle East (52.4 percent). In addition, 53.2 percent do not pay a hardship premium in locations where a long-term assignee would receive one. Once again, Asian-based firms are less likely to pay such a premium in comparison to other multinationals.
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For more information on 2006 Survey of Short-term International Assignment Policies, contact Samantha Blackhurst.