Finding the right person for an open position can be difficult, so when you find that perfect fit you’ll do what it takes to get them to their new location, even if that new location is abroad. However, relocating someone internationally has never been an easy task. Even if you offer your employees a pay raise, ship their household goods, or help them find the most amazing new home, expatriate assignments often go awry over time.
Housing, cultural adjustment, family adjustment, and a new work environment can all lead to poor productivity, especially if the assignment takes someone far away from their loved ones for an extended period of time.
There are many preparations and arrangements that go into sending your workers abroad, which is why it is important that you understand the advantages and disadvantages of the most common types of expatriate assignments: long-term, short-term, and typical business travel.
Some companies choose to use just one type of assignment or include multiple different options, depending on the employee and the position available. Either way, finding the best fit for both your company and your employee will ensure both are successful long term.
What is a long-term expatriate assignment?
There is no single definition of what constitutes a long-term expatriate assignment because companies vary in how they define long term versus short term. Still, a long-term expatriate assignment generally has a 12-month to 36-month duration. Some companies may define a long-term expatriate assignment as work that lasts a minimum of two years but not longer than five years. One of the most important things to note is that this type of assignment is not a permanent transfer; the employee intends to return to his or her home country after the long-term assignment is complete.
The benefits of expatriate work go both ways. You have the opportunity to dispatch your best talent to international partners and help them build and grow their international business; and, your workers have the opportunity to expand their knowledge of different cultures and markets and enhance their careers with overseas experience.
The specifics of each long-term assignment vary greatly depending on industry and location. In the past, it was important to instill the culture of the parent company into the foreign entity and help drive revenue growth in the overseas location. Today this still exists, but the opposite is also true. Overseas workers are being deployed to the parent country or other countries to gain experience, transfer knowledge, and run specific project-based work. How companies handle expatriate assignments are changing as global travel is now just as common as traveling within your own country.
Companies know that employee dissatisfaction with long-term expatriate assignments is a problem. The most striking example of employee dissatisfaction is when workers move their entire family overseas. It’s common for many staff to encounter buyer’s remorse as stress and unfamiliarity with new surroundings begin to affect loved ones.
Costs are extremely high for expatriate assignments and many companies don’t properly vet the individual taking the assignment. They don’t test the person’s ability to thrive in a “foreign” location and adapt culturally. Additionally, many companies forego cultural and language training that is essential in providing a foundation for a successful transition. Simple things like how to conduct a business meeting, learning the norms for handing out a business card, finding what time is appropriate for arriving at meetings, knowing what to do if invited to dinner, etc. are just some of the numerous and subtle social and business norms that will ensure success. However, many companies choose not to or don’t know the importance of this investment.
Consequently, increases in employee dissatisfaction and high costs with long-term assignments has led many companies to reevaluate their long-term policies. Many companies have chosen another route: short-term assignments.
What is a short-term expatriate assignment?
This type of expatriate assignment can last between three months to a full year. Similar to long-term assignments, each company defines short-term assignments differently. Because the employee plans on returning home after such a short amount of time, there are additional benefits that must be considered. Many companies will not allow the family to accompany the employee on these short-term assignments but will provide other options such as more frequent trips home, furnished accommodations, per diems, travel allowances, etc. Relocation management companies, such as WHR Group, can help manage short-term expatriates and provide the structure and benefits available to this group of assignees.
The problems of dissatisfaction and homesickness became apparent with long-term moves, so short-term overseas engagements were developed as an alternative to pulling up roots and moving families across the globe for extended periods. From your company’s perspective, a short duration generally costs less upfront, and it gives you more flexibility when developing a mobile, global workforce. Additionally, the consequences of individuals becoming “taxable” in the foreign location can be managed effectively, thus significantly decreasing the cost of the assignment.
The cons of short-term expatriate assignments revolve around demands to rotate a variety of personnel, which requires more planning and administrative time for everyone involved. There is a trade-off between a series of short-term assignments versus a single long-term assignment. What works for your company may not work well for others.
Extended business traveler
These types of expatriate assignments can really rack up frequent flier miles. If your workers travel internationally on business for a duration that only lasts a week or two, they are still, technically, expatriates. Typically, these employees are not on a formal assignment; however, there are still potential tax and immigration considerations that need to be made when sending someone on these extended business trips.
For everyone involved, business traveling simply causes less disruption. Your workforce has much more control over how they perform duties and you don’t have to permanently allocate resources to a foreign location.
Work visa requirements differ widely from country to country and can be impacted by the home and host locations involved. In some instances a worker may enter into the country on a work permit waiver, but in other countries it may be illegal to perform a single work duty without having the proper work visas in place.
Regardless of the assignment type that is considered, each type of expatriate assignment has its own strengths and pitfalls. Every company needs to determine what is optimal for their workforce and the business need requiring these assignments.
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