"Many organizations are talking about cost reduction in today's marketplace, but we continue to see organizations investing in international assignments and diverse assignment types because there continue to be real business and developmental reasons to pursue them," said Achim Mossmann, managing director of Global Mobility Advisory Services in KPMG LLP's IES practice. "There is an understanding that when competing in global markets, global experience and expertise are critical to the success of the organization and employee."
The survey found that companies have been using a broader range of assignment types over the past few years. Short-term assignments (STAs) - assignments less than 12 months - continue to increase, with 81 percent using this option. In addition to STAs, commuter assignments - assignments where employees work in a different country then where they reside - were utilized by 22 percent of the companies surveyed. Commuter assignments are becoming more widely used by European-headquartered companies to take advantage of improved mobility within the European Union.
Developmental or training assignments - assignments where companies send employees on assignments to gain valuable expertise and experience - have held steady at 36 percent over the last two years. Developmental or training assignments are especially popular among Asia-Pacific-headquartered companies.
Program Cost and Administration
Balancing costs and easing the administration process of international assignment programs remains a concern, according to the survey. Nearly half (49 percent) of the survey respondents said that international assignments take too much time and effort to administer, while 38 percent believe that assignees are overcompensated. Because of this, organizations are implementing techniques to achieve greater cost efficiency. For example, to help determine the cost of living adjustment (COLA) calculation, 31 percent of the organizations surveyed are now using an "efficient purchaser index" - a measurement of the ratio of the cost-of-living between the home and host locations, which assumes that an assignee is a "smart shopper" and is able to purchase goods and services more economically than the average (newly arrived) assignee.
While costs are a concern, just 13 percent of survey participants indicate that a primary goal of their international assignment program is to achieve an appropriate recovery of their costs. Furthermore, 27 percent of companies either do not estimate costs related to international assignments or only prepare cost estimates when requested.
Currently, just four percent of respondents agree that they handle the repatriation process well and only 12 percent offer a formal mentoring/career coaching plan for their assignees. In fact, 25 percent of organizations surveyed do not know if assignees have left the organization within 12 months of returning from international assignment. For repatriated assignees that are tracked as leaving the organization soon after returning from assignment, the overriding reason cited is the lack of an appropriate job after repatriation. However, there may be a knowledge gap in this area, as 30 percent of organizations do not know why their assignees leave the organization within 12 months of returning from their assignment.
"The desire for achieving greater cost efficiency seems out of sync with the return on investment (ROI) being realized in international assignment programs," said Ben Garfunkel, national partner in charge of KPMG LLP's IES practice. "A keen focus on the repatriation process and taking various measures to retain assignees such as establishing a formal mentoring plan can help resolve this disconnect and diminish the risk of isolating an assignee, while also improving overall career succession and an organization's talent management."
The repatriation process is also an issue for the 210 mid-sized companies - $500 million or less in revenue - that participated in the survey. When looking specifically at repatriation services, mid-sized companies are less likely to provide repatriation counseling, internal career planning/job placement toward the end of the assignment, and pre-repatriation visits to the home country, the findings revealed.
"Globalization in the 21st century has resulted in an even higher demand for businesses to send the right talent to the right place at the right time," added Mossmann. "As more and more companies compete globally, conducting business in regions all over the world requires that international assignment programs not only have more flexible assignment policies and assignee logistical support, but also the right internal stakeholders and processes in place to manage the higher corporate and individual risks associated with cross-border business activity."
Because of this, organizations frequently turn to outsourcing to help manage their international assignment programs. When asked to select the top reason for outsourcing, 48 percent of companies said "to gain access to a service provider's global resources and expertise" and 23 percent said "to improve service quality and efficiency." Tax and immigration services remain the most outsourced processes.
