Cost is nearly always the most talked about element of an international assignment. It probably started as a half-hearted attempt at humor. Someone in a budget meeting just asked, what about if we don’t treat them as expats? However it started, there is now a definite and noticeable trend to move long-term assignees on to local contracts, and the cost is not the only reason.
Is this the end for long-term assignees?
The concept of an expat package is increasingly under scrutiny for many reasons, and here we are going to look at just a few:
- Equality and fairness
- Job security
- Talent seeding
- Cultural integration
In the UK, most new starters will have a minimum annual holiday allowance of at least 20 days. In the USA, Tonga, and Micronesia there is no obligation for private sector employers to offer any annual leave at all. In reality, the average US worker negotiates ten paid days of annual leave.
This means that if a British worker goes on assignment to the USA, they will have more than double the number of paid days off than their US equivalents.
In addition, the expat package will include comprehensive health insurance, a schooling package for children, a settlement allowance for their partner, an allowance to cover trips back home and probably an inflated salary.
For long-term assignees going from the US to India, they can expect to earn five or six times more than their local equivalent. Not only have local employees begun to question this inequality, but policy managers and HR directors are scrutinizing the imbalance and inequity of approach.
Despite the “talent war” we are currently experiencing, taking up a long-term assignment could be bad for your career health
It is reasonable to offer some compensation for someone who is uprooting their life to settle elsewhere. But Global Mobility professionals are looking much harder at the justification of a more luxurious lifestyle that longterm assignees can expect in their host country.
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Despite the “talent war” we are currently experiencing, taking up a long-term assignment could be bad for your career health. Will there be a job when you come home? If your employees aren’t asking you this question when they are considering an assignment, they are either thinking it or they should be thinking it.
Too many people turn down an assignment because they need the security of being able to look beyond the next three years.
As relocation packages are trimmed, long-term assignees are less likely to come back rich and set up for life after a couple of assignments. This means the return home is a risk: will I still be able to afford to live in the same area? Will my company find a real job for me? Will I have to move again?
There are two reactions to this: firstly, accepting short-term assignments of up to three months, or secondly accepting a permanent move.
A permanent, localized move offers stability and confidence for the whole family. Partner and children know that the family is committed to the new country and can make the mental adjustments needed.
Long-term assignees can focus on building a proper permanent network and can look to fulfill their career ambitions in that country without having to worry about restarting after three years.
The main reason for sending long-term assignees in the first place is to fill a talent gap. But filling with a three-year posting defers the problem.
A more sustainable and scalable solution is to create a post aimed at developing talent in the location over an extended period. Moving a subject matter expert into a location permanently not only creates a local resource, it also provides a role model for others looking at that field.
The main reason for sending long-term assignees in the first place is to fill a talent gap
This allows the organization to grow their own talent pool. If you select the right person and equip them with the right skills, you can generate a solid base of talent that is self-selecting and self-perpetuating.
A greater talent pool brings a wider perspective on your organizational challenges and a more diverse base from which to form solutions. More importantly, you have local knowledge where those solutions are needed most.
When your organization is working in a country with a relationship focus, the three years of a long-term assignment are barely enough for the assignee to build the kind of relationship needed.
The local customers and partners know that the assignee will leave in three years, so are not willing to invest in the relationship from the beginning. For those who do, they are just getting to the point of maximum work potential when it’s time for long-term assignees to go home.
A permanent, localized move offers stability and confidence for the whole family
A localized assignee overcomes that. The organization is demonstrating a long-term commitment to that market, the assignee can build relationships on the basis of a long-term partnership, and local customers are comfortable building a trusting relationship with a single person.
Convincing the assignee
The remaining challenge is selling the package to the assignee and their family. In many ways, the career expats of the 1990s and early 2000s have begun to leave the workforce and with them, potential assignees are unaware of the days of expat luxury homes, domestic help, and colonial lifestyle.
However, there is still an expectation that the salary will be on favorable terms, and that the global mobility team will provide large amounts of additional support to the family.
On a localized package, there is no expat insurance, private schools, additional flights home. Pension, social welfare, and other benefits will have to be localized too and that may cause some difficulties – not only is the financial package less, the compulsory elements are reduced too.
Greater rewards at greater risk
Moreover, there is no hiding that this is a much greater commitment and higher risk. Most people can be patient for three years if they are struggling to adapt. A localized employee is stranded if they find that they can not (or won’t) adapt – or if any family member can’t. This reduces the pool of people willing to put themselves forward. Their only option is to leave the company and look for work back home.
If you do find the right candidate, localization has a lot to recommend it, but higher potential gain means higher potential risk. Selecting the right candidate with realistic expectations and the right technical and intercultural skills will determine the success of localization.