Long-term temporary assignments
Long-term temporary assignments typically span one to three years, though it is not uncommon that they are extended to five years or more. Most companies focus on keeping long-term assignments to a five-year maximum as a cost management effort to align with the maximum period of tax-related totalisation agreements. Another reason is the recognition that if a business need exists that requires more than a five-year term to address, it may be more effective to consider a permanent solution.
Today, long-term assignments are used to meet a variety of business needs, including global leader development, expansion into new markets or a new facility start-up.
Companies considering long-term temporary assignments should establish whether the home country balance sheet approach is the only viable package to use, or whether they align the employee’s compensation with the host location norm. Any support elements required, that cannot be addressed through compensation such as international schooling for accompanying dependents and provisions like home leave that apply only to expatriates, will also need to be measured.
Finally, the linking of long-term assignments and the company’s talent management initiatives should be assessed. These assignment types are the most critical and most challenging to connect. Their duration makes ‘out of sight, out of mind’ an easy option. However, the company’s greatest financial investment is in long-term assignments, making the return on investment a business imperative.
International transfers are akin to domestic relocation and may be used when the duration of a stay abroad is unknown. Traditionally, they have been used when an employee fills a permanent position in the destination country. It does not guarantee that the employee will not move again or even repatriate eventually.
The key differences between this and a long-term temporary assignment are that home sale and home purchase assistance are often provided for employees undertaking a permanent transfer. International transferees are put on the destination location’s payroll and transitional assistance (such as a spouse/partner employment allowance) is typically provided but elements such as education assistance for accompanying dependents are not.
Employee requests for long-term assignments or international transfers
The benefits of long-term assignments are not just restricted to companies, employees too can reap big benefits from a stint overseas. The key element for the company is that the employee has requested the assignment for their own personal and/or professional reasons. The company may wish to provide support during the assignment but at a reduced benefit level.
The main differences in the type of support offered would be that the employee may be transitioned to local status for a long-term assignment rather than utilising the home country balance sheet, and for those who have requested short-term assignments to accompany a spouse then only relocation benefits would be provided, such as travel to/from the host locations and personal goods shipment.
In summary, the key challenge for mobility leaders is to determine what assignment type any trips fall under and what assistance it should include in its package. Their considerations should include the business reason for an assignment, whether it is a typical reason for the company or different from previous assignments, the timeframe needed to complete the objective, whether the assignment type can be flexible to meet the needs of the assignee, if the employee initiated the assignment request and what the most likely next step for the employee post assignment is.
Peter Sewell is regional director at Crown World Mobility.
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