Thirty-eight percent of employees leave an organisation after completing an international assignment because there is no longer an appropriate job for them in their home country and 26% resign because they are offered a job and career in another company.
KPMG’s Global Mobility Advisory Services practice director Sandra Cittadini said the results showed that businesses needed to understand how to achieve a better return on investment on costly overseas placements.
“Our experience with clients tells us that companies who manage the entire process well – beginning with assignment-specific goal setting, identifying appropriate candidates, and ending with securing appropriate jobs for assignees upon repatriation – have a better return on investment,” Cittadini said.
KPMG found that organisations were looking for ways to trim assignment expenses. Since 2003, there has been nearly a 10% increase (to 31%) of organisations using an “efficient purchaser index” in their cost of living calculation. Organisations continue to look for and implement techniques like this to systematically achieve greater cost efficiency.
But most companies still have a lot of ground to make up in the management and repatriation of assignees.
Only 23% of companies surveyed this year said they establish assignment-specific career goals for every assignee, down from 31% in last year’s survey. Overall, only 38% of those surveyed “strongly agree or somewhat agree” that they handle the repatriation process well, down from 49% in 2005.
“Given the significant financial outlay required for an international assignment, companies should focus on setting the appropriate career management infrastructure to better manage the retention of their international assignees,” Cittadini said.
“This issue is particularly pertinent for Australian companies which urgently require the international experience and expertise that international assignees possess.”
In addition, many companies say they are looking to trim their international assignment program costs, while also trying to reduce the time invested in administering these programs.
According to the survey, 38% of corporate respondents believe their assignment programs are “more generous than they need to be”. At the same time, 48% believe their international assignees take “too much time and effort to administer”, a 12% increase from KPMG’s 2005 survey findings.
KPMG also found that there has been a 54% increase in short-term assignments compared to last year.
“Many myths surrounding these assignments still exist,” said KPMG Global Mobility Advisory Services national director Achim Mossman.
“Many still believe short-term assignments are more cost-effective, administratively simpler, subject to fewer immigration requirements and less complex when it comes to taxes. But in many cases, a short-term assignment actually requires much more advance planning and compliance to be more cost-effective.”
Many organisations (45%) outsource parts of their international assignment programs to gain access to a service provider’s global resources and expertise. This reduces the effort spent by internal human resources professionals and lets the organisation tap into economies of scale offered by service providers.
Cultural, industry differences revealed
The survey also uncovered some interesting cultural and industry differences in assignment policies. As the practical definition of “family” continues to shift, companies in Asia-Pacific and Europe have expanded their international assignment benefits coverage to “other dependents” on a much larger scale than companies based in the US.
For example, the KPMG survey found that 79% of Asia-Pacific-based respondents and 73% of European-based respondents offer international assignment benefits to unmarried domestic partners of the opposite gender, compared with only 37% of US-based companies.
From an industry perspective, 76% of financial services companies offer this benefit, compared with 27% of energy companies.
Going native
The survey also revealed that “localisation” continues to be a current focus area for respondents.
Localisation occurs when an assignee becomes a permanent employee in the host country, instead of working on a limited term assignment. The number of companies handling localisation on a case-by-case basis increased to 31%, up from 29% last year.
KPMG’s web-based survey Global Assignment Policies and Practices Survey was the first of its kind and has been running for eight years.
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