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Over 70% of companies expect to increase short-term assignments in 2013, according to a recent report on expatriate policies and practices by Mercer. The report showed that 55% of companies expect to increase long-term assignments and highlighted that, for the last two years, there has been an increase in the overall number of international assignments. The report found that China, United States, Brazil, United Kingdom and Australia are the priority destinations in their respective regions for expatriates (see Chart 1).
The information comes from Mercer’s Worldwide International Assignments Policies and Practices report (WIAPP), which found that more than half of companies reported an increase of long-term (52%) and short-term assignments (53%) in 2011 and 2010. The WIAPP report presents the latest trends in international assignment programme management, policies, and practices data.
Anne Rossier-Renaud, Principal in Mercer’s global mobility business said, “International assignments have become diverse in order to meet evolving business and global workforce needs. Relatively low pay increases in some regions and pressure on companies to attract and retain talent, have spurred many to embrace a wider range of global mobility strategies to incentivise high performers. Mobility and HR directors now face great complexity in the number and type of international assignments that need managing.”
According to Mercer, the top five reasons cited for international assignment programmes are; to provide specific technical skills not available locally (47%), to provide career management/leadership development (43%), to ensure knowledge transfer (41%), to fulfil specific project needs (39%), and to provide specific managerial skills not available locally (38%). Close to half of North American (45%) and European (46%) companies indicate career management/leadership development as one of the main reasons they have international assignments. In the future, worldwide, 62% of participants anticipate an increase in the number of technical-related short-term assignments, 55% anticipate an increase in talent development assignments, and half (50%) anticipate an increase in key strategic assignments.
Assignment origins, durations, obstacles and demographics
According to the report, the duration of long-term assignments is trending down. The average duration of a long-term assignment is now slightly less than three years (2 years 10 months). The average minimum duration is 1 year, 5 months, and the average maximum duration is 5 years, 4 months. The average age of long-term assignees is between 35 and 55 years (see Chart 2). For short-term assignments, minimum, average and maximum durations, worldwide, stand at respectively 4, 8, and 13 months. The average age of short-term assignees tends to be younger, with a similar proportion of companies in the below 35-years-old bracket and in the 35-to-55-years-old bracket.
The likelihood of expatriates being female has marginally increased, with the average percentage of female assignees standing at 13%, just 3% higher than two years ago. Latin American and Asia Pacific companies show female average percentages lower than those of North American and European respondent companies. Family-related issues, such as concerns over children’s education in a new location, remain a major obstacle to employee mobility, says Mercer. Partners and spouses of employees asked to work abroad may also have successful careers in their own right that they may not want to compromise. “Career management” ranks as the next most important issue, except for European and Asia Pacific companies, which rate lack of “package attractiveness” as the second-biggest obstacle to mobility.
Multinational companies continue to source most (57%) of their international assignees from the country in which they are headquartered and assign them to foreign subsidiaries. However, there has been an increase in the percentage of subsidiary company transfers (51%) indicating that subsidiary-to-subsidiary transfers, as opposed to HQ-to-subsidiary transfers, have increased since 2010. This evolution is most significant among European companies, with six in ten (61%) reporting an increase of this pattern of assignments, indicating the growing competencies of staff in other parts of the world.
Metrics and Return on Investment
Two out of three employers (65%) have no specific tools to track and manage assignments and their related cost, other than using basic tools such as Excel and Word. Twenty-five percent of North American companies use external suppliers, whilst European employers tend to use a specific tool or an in-house application (16%). A lack of expatriate programme management tools might be one of the reasons that so few companies maintain metrics to evaluate their international assignment programmes. Very few companies (6%) use metrics to track assignments – such as tracking the percentage of assignees repatriated before completion of assignment. Likewise, 63% of participants reported that they keep no statistics on turnover of repatriated assignees. But even without statistics on the matter, 39% of participants reported that, generally, employees with international experience were promoted more quickly. Three in five companies globally (62%) have a detailed cost-projection approach that includes tax and social security costs, but about five in nine employers (56%) do not track actual versus projected costs. However, this practice is reported more frequently among Latin American and Asia Pacific companies, where 63% and 58% of the participants, respectively, report tracking actual versus budgeted costs.
Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 19,000 employees are based in more than 40 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 53,700 employees worldwide and annual revenue exceeding $10 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @MercerInsights