Global employee mobilityTuesday December 22, 2015 Written by Retain Canada
A majority of multinational companies expect to increase their use of short-term assignments in the coming year.
A new Mercer report revealed that over the next year or so, about half of the companies surveyed anticipate an increase in the use of permanent transfers (54 per cent), developmental and training assignments (50 per cent) and locally hired foreigners (47 per cent). A smaller proportion of respondents (44 per cent) expect to see an increase in more traditional long-term assignments.
“Companies are using a more varied range of assignments in order to respond to evolving business needs and changing patterns in the global workforce,” said Anne Rossier-Renaud, principal in Mercer’s global mobility business. “The increased diversification of assignment types adds complexity which can result in potential compliance and policy challenges for HR and mobility directors. However, it also creates opportunities to positively impact the overall business strategy by mobilizing key resources in more flexible and cost effective ways.”
Mercer’s Worldwide Survey of International Assignment Policies and Practices report covers 831 multinational companies with approximately 29 million employees combined. It found that over half of all companies surveyed increased their use of short term (51 per cent) and permanent (50 per cent) assignments over the past two years – whereas only 43 per cent increased the use of long-term assignments. Globally, 85 per cent of companies have a policy or policies in place for international assignments (up from 81 per cent in 2012).
The report also noted a marked increase in companies with multiple policies (64 per cent, up from 57 per cent), a consequence of the diversifying trend in assignments.
“One policy is unlikely to fit all, and such an approach can lead to inadequate compensation which again can make it difficult to attract and retain talent. Implementing fit-for-purpose policies, to suit both different assignees and assignments, can be a highly efficient cost-saving initiative for most global mobility functions,” Rossier-Renaud said.
Assignment drivers, obstacles and demographics
The top five drivers behind international assignments are: to provide specific technical skills not available locally (47 per cent), to ensure “know-how” transfer (43 per cent), to provide specific managerial skills (41 per cent), to facilitate career management and leadership development (41 per cent) and to fulfil specific project needs (40 per cent).
In the future, 57 per cent of companies expect the number of key or strategic assignments to increase. Just over half of respondents (51 per cent) expect to deploy a higher number of younger assignees and 41 per cent anticipate more assignments to remote locations. Companies reported the highest expected increase in assignments to be deployed to the United States, China, the United Kingdom, Singapore and Brazil.
“Dual career” (the challenge of effectively helping to manage the career aspirations of the spouse), and “family issues” are cited as the main barriers to employee mobility, with 37 per cent of respondents citing these issues combined as a large or very large obstacle to global mobility. The cost of current conditions ranks as the second highest obstacle (35 per cent), followed by hardship considerations (25 per cent) and career management (23 per cent). Notably, all obstacles scored as significantly less important than in the previous survey, suggesting companies are implementing proactive measures to overcome these issues.
“With the increased use of alternative assignment types such as commuters and short-term assignments, companies are by-passing some of the major obstacles to mobility,” Rossier-Renaud noted. ”Employees on these assignments are less likely to bring the family along, allowing the spouse to continue working in the home country and saving the company the cost of relocation. However, these assignment types can come with significant compliance challenges, and it is imperative that companies monitor these assignees carefully for tax, social security and immigration purposes. Failure to do so can expose both the company and employee to serious legal and financial penalties.”
The proportion of female expatriates has increased somewhat, with the worldwide average participation standing at 15 per cent, up from 12 per cent in 2013 and nine per cent in 2010. Age-wise the majority of long-term assignees (66 per cent) are between 35 and 55 years old, whereas short-term assignees are increasingly younger at 35 years old or less (48 per cent, up from 45 per cent in 2013). With an average of 10 per cent and seven per cent representation in long- and short-term assignments respectively, the over 55s remain very underrepresented in a mobility context. Looming skills shortages as a result of an aging population is likely to change this picture over time.
“The statistics on female assignee representation are clearly not representative of the workforce at large,” said Kate Fitzpatrick, senior mobility consultant at Mercer. “Companies would do well to review their candidate identification and selection procedures, as well as the benefits provided under international assignment policies, to ensure there is nothing overt nor implied which is restricting the deployment of female talent.”