By Peter Sewell, Regional Director, Crown World Mobility,
More and more international assignments result from international business needs and when businesses need experienced leaders in new markets, they often turn to internal assignees. Similarly, when technical workers in a support centre need training, they may be sent to an established company site in a different country for a period of time, or when an employee is asked to relocate to meet a short-term business requirement, they may opt instead to commute so as not to uproot their family. As the realm of international business grows and changes, so does the variety of international assignments that support it. Twenty years ago, it was common for even the most global of companies to have just one or two international assignment types, today, a company may need four times as many.
Here are some popular assignment types, the business needs they serve and their key support and policy elements:
Long-term temporary assignments
Long-term temporary assignments typically span one to three years, though it is not uncommon that they are extended to five years or more. Most companies are focusing on keeping long-term assignments to a five-year maximum as a cost management effort to align with the maximum period of many tax-related totalisation agreements. Another reason is the recognition that if a business need exists that requires more than a five-year term to address, it may be more effective to consider a permanent solution.
Today, long-term assignments are used to meet a variety of business needs, including global leader development, expansion into new markets or a new facility start-up. Companies considering long-term temporary assignments should establish whether the home country balance sheet approach is the only viable package to use. They may wish to consider the use of a local plus package, where the employee’s compensation is aligned with the host location norm. Any support elements required, that cannot be addressed through compensation, such as international schooling for accompanying dependents and provisions like home leave that apply only to expatriates, will also need to be measured.
Finally, the linking of long-term assignments and the company’s talent management initiatives should be assessed. These assignment types are the most critical and most challenging to connect. Their duration makes ‘out of sight, out of mind’ an easy option. However, the company’s greatest financial investment is in long-term assignments, making the return on investment a business imperative.
Short-term temporary assignments
Short-term temporary assignments are typically between three and 12 months, though the limits vary by industry. Another defining characteristic of short-term assignments is the objective or purpose, which is typically to accomplish a specific task or goal, such as to train local staff in a specific skill, or gain technical proficiency from local staff.
The substantive differentiating elements of short-term assignment support are that compensation for short-term assignees typically maintains home country salary and benefits. Because more of the assignee’s home country living costs are retained, the differential approach practiced by the home country balance sheet for long-term assignments doesn’t apply. Costs to maintain one’s home country housing may also be incurred by short-term assignees and, to mitigate this expense, companies may provide a home maintenance allowance to offset upkeep costs.
Employee requested long and short-term assignments
Employee requested assignments apply to both long and short-term assignments. The key element for the company is that the employee has requested the assignment for their own personal and/or professional reasons. The company may wish to provide support during the assignment but at a reduced benefit level. The main differences in the type of support offered would be the employee may be transitioned to local status for a long-term assignment rather than utilising the home country balance sheet, and for those who have requested short-term assignments to accompany a spouse then only relocation benefits would be provided, such as travel to/from the host locations and personal goods shipment.
Extended business travel and rotational assignments
Policies addressing extended business travel are growing in popularity. The primary reason for this is compliance-related. There is a wide variety of extended business travel time limits, but the most common is a minimum of three weeks and a maximum of three months.
The trips’ objectives are typically project-based which require an employee to be on-site for an extended period of time, return home and then return to the host location, which can sometimes be repeated over a long period of time. One of the most important elements of extended business travel and rotational assignment support is to track time in the host country to ensure that regulatory parameters are not breached. The governing policy is generally a simplified version of short-term assignment policy, minimising assistance in areas such as goods shipment and eliminating components such as temporary living, allowances and home leave.
International transfers are akin to domestic relocation, with international-related elements added in, and may be used when the duration of the stay is unknown. The key differences between this and a long-term temporary assignment are that home sale and home purchase assistance are often provided for employees undertaking a permanent transfer. International transferees are put on the destination location’s payroll and transitional assistance (such as a spouse/partner employment allowance) is typically provided but elements such as education assistance for accompanying dependents are not. Finally, tax return preparation assistance is often provided for the first year of transfer.
An employee may commute regularly between their home location and the work site in another country. Because of the need to commute regularly, these assignments are most frequently used intra-regionally.
This option isn’t suitable for all business needs but is the most effective for project assignments and other tactical initiatives. It offers flexibility and can be more cost-effective, but may also require more frequent review. The support that companies should consider includes furnished accommodation, reimbursement for food and transportation, a home maintenance allowance and a relocation allowance to cover costs such as child care or currency conversion charges.
Most long and short-term temporary assignments assume the assignee will repatriate to the home location or another permanent location in the home country following the assignment. For employees undertaking more than one assignment in a row, typically referred to as consecutive assignments, some aspects of temporary assignment support are not effective.
Consecutive assignments are particularly appropriate for strategic initiatives, such as global leadership development, but they are also effective for technical professionals who support facility start-ups for the company. Consecutive assignments are not commonplace in most international assignment programmes, but in some companies and industries, there is a cadre of internationally mobile employees for whom a dedicated programme is more effective than trying to apply a programme designed for a different mobility type.
Developmental assignments address strategic needs within a company; to help an employee gain critical skills. They are often utilised for employees identified as high-potential at any point in their career, or they may be specific to early career employees. The duration will vary and can either be single-status or family accompanied. They may also be group-oriented, whereby the company selects a number of employees to undertake the assignment and housing and transportation is shared.
Project assignments are typically used to transfer highly or specifically skilled employees to a location temporarily to accomplish a specific goal and are commonly used for client work, facility build-out, technology rollout and similar initiatives. They are most commonly short-term, although can be long-term depending on the project needs.
The differentiation of an assignment as project-based allows the company to design a support package that specifically meets the needs of the project, rather than a general approach that would meet the needs of a wide array of assignments. This is particularly useful for assignments involving joint ventures or when parameters need to align with a client’s program requirements.
Assignments in difficult locations
Difficult locations are typically defined as having living conditions that are far more challenging than those the employee experiences in their home location, such as housing, living standards, remoteness, transportation options, limited education or medical facilities and significant cultural differences. Assignee selection and assessment may have a larger role in this assignment type to help ensure employees undertaking these assignments are best equipped to handle their rigors.
All the assignment types described have things in common, as well as elements that clearly differentiate them from each other. The challenge for mobility leaders is to determine if the company needs to define a new assignment type and what assistance it should include in its package. Their considerations should include the business reason for an assignment, whether it is a typical reason for the company or different from previous assignments, the timeframe needed to complete the objective, whether the assignment type can be flexible to meet the needs of the assignee, if the employee initiated the assignment request and what the most likely next step for the employee post assignment is.