MANAGING INTERNATIONAL ASSIGNMENTS

Managing International Assignments

Managing International Assignments

Introduction

In the last few years, there has been a significant increase in the number of employees being sent on short-term international assignments, which typically last from three to 12 months. Management of these types of assignments has become a major challenge for many companies, as different departments and business units frequently initiate them. Recently, 520 worldwide multinationals, including 50 Canadian companies, participated in a survey of company policies for employees carrying out short-term international assignments. This survey was conducted jointly by Organization Resources Counselors, Inc., TheMIGroup and The Society for Human Resource Management's (SHRM) Global Forum. Survey participants had more than 30,000 employees on short-term assignments, making this the largest survey ever conducted of policies for these types of international assignments.

Discussion

Three quarter of the companies surveyed reported that the number of their international short-term assignees was increasing. This is not surprising, given the globalization of manufacturing and distribution systems in many companies. Participants reported that at least 70 per cent of assignments are either project driven or involved in the transfer of technology, with approximately 25 per cent to 30 per cent being used for development and training purposes.

Although employees can be found working on short-term assignments in virtually every conceivable location worldwide, the three regions with the highest numbers of assignees are Western Europe (where 59 per cent of companies reported having assignees), Asia Pacific (57 per cent), and North America (55 per cent).

Wide ranges of different nationalities of employees are also being sent on short-term assignments, often as part of project teams. On average, companies reported having at least five different nationalities of employees on these types of assignments.

From the survey results, it appears that almost 80 per cent of employees on short-term international assignments do not bring their families. However, special assistance is provided with housing and living costs in the location where they are assigned. In many cases employees are provided with furnished apartments with self-catering facilities, as well as some form of daily living allowance.

Policy Issue Challenges

Typically, companies tend to use the same general policy approach for short-term assignees. Employees normally remain on their home compensation and benefits plans while on assignment and continue to be paid through their usual payroll. There is, however, a wide range of practices between companies in the types of incentives, level of living allowances and even the number of times they will pay for trips home for employees to visit their families. Incentives

The survey results show (See Figure 1) a significant difference between companies as to whether it is necessary to pay Foreign Service Premiums and Hardship Allowances to short-term assignees.

Reasons for paying Foreign Service Premiums to short-term assignees, which typically run from 10 per cent to 15 per cent of monthly base salary, vary. Some companies find it necessary to pay premiums because of competitive practice within their industry; others do so because the employee is separated from his or her family, while others do so to be consistent with their regular ...