Long-term assignments: The full package

Despite an increasing organisational emphasis on the use of short-term, commuter and other alternative types of international mobility, long-term assignments remain the most commonly used assignment type. Sue Shortland reports on the elements that typically comprise a long-term assignment package, and trends in provision.

Despite an increasing organisational emphasis on the use of short-term, commuter and other alternative types of international mobility, long-term assignments remain the most commonly used assignment type. Sue Shortland reports on the elements that typically comprise a long-term assignment package, and trends in provision.Long-term assignments are defined as being over a year in length. It is usual practice for organisations to have developed comprehensive policies of support and implementation practices in respect of such mobility, to ensure that assignees and their families are treated consistently, transparently, and with equity.table1_1.jpgAccording to Santa Fe’s Global Mobility Survey Report for 2012, 62 per cent of organisations report that their most common assignment length is between one and three years (up 2 per cent on 2011), while 14 per cent of firms (in both 2012 and 2011) most frequently use assignments over three years long. It is notable that the Cartus 2012 Trends in Global Relocation survey also finds that the use of long-term assignments is increasing. Indeed, Brookfield’s Global Relocation Trends 2012 Survey Report indicates that 96 per cent of organisations have long-term assignment policies currently in place. Regrettably, publicly available data on policy components for long-term assignments (as for other assignment types) most usually remain included in benchmarking reports/clubs, and are thus restricted to participating organisations. Despite the growth in the use of alternative types of assignment, Santa Fe’s report notes that the structure of relocation packages remains broadly unchanged. Nonetheless, some trends can be identified from its data. Cartus reports that, while the use of long-term assignments is increasing, there is a simultaneous reduction in benefit levels in this type of policy. It notes that, out of a total of 41 components, 35 are offered less frequently, four are offered equally, and only two have increased since its previous survey report, published in 2010. A comparison between Cartus data for 2010 and 2012 suggests that the following policy elements for long-term assignments are in decline: non-accompanying dependants’ visits; pre-assignment trips; children’s education assistance; host transportation allowance/vehicle provision; host location departure assistance; medical examinations; language training; temporary living; storage of household goods; foreign service/mobility premiums and incentives; and host-country housing allowances/differential. International assignment policies typically comprise elements of remuneration, as well as allowances and benefits. Salary, tax, pensions and healthcare are highcost items in the international-assignment package. Their calculation and delivery may be based on home, host, a third country, headquarters, global, or some other location-based approach. Data interpretation To interpret these data, it is important to remember that the reworking of policy components (the introduction of new elements and removal of others) does not necessarily reflect a worsening of the terms and conditions underwhich assignees take up long-term mobility. The nature of the assignee population is changing (it is getting younger), and this will influence the nature of the benefits required. table2.jpgFor example, there may be a reduced requirement to support children’s education, non-accompanying dependants’ visits, and spouse/partner assistance, if the assignee is unattached and has no children. Property management and storage of household goods may be less likely to be supported if assignees rent property in the home country, or live with their parents. These issues suggest that employers are attempting to continue to support assignment preparation through providing pre-departure and on-arrival support, but are doing so in a manner more closely tailored to employee need and cost-effectiveness. For example, Brookfield notes that 85 per cent employers regard cross-cultural training as being good or great value. It is also notable that survey commentary on benefits reduction is most usually based on inclusion/exclusion in policy. Of course, this does not really tell us about the nature of the benefits provided and whether these are included but trimmed back, delivered with no amendments, or being delivered but increased financially over time. However, given that organisations are particularly mindful of cost control in the current economic climate, and discussion within expatriate forums frequently revolves around how to encourage assignees to undertake expatriation through competitive and motivational policy provision whilst balancing this against the need to reduce expenditure (that is, how to do more with less), it is most likely that provision of remuneration and benefits is being scaled back where possible.  It is also being delivered in the most tax-effective manner. One interesting point, though, concerns Cartus’s finding that employers are increasingly attaching repayment or ‘clawback’ clauses to international assignments. Its report indicates that the use of repayment clauses has increased from 49 per cent in 2010 to 61 per cent in 2012. Gleaning snippets of data from different surveys is, of course, to be treated with some caution, given that data collection is carried out in different periods, it reflects practices from different types of organisation (including profit and not-for profit, private- and public-sector), and draws upon organisations headquartered/based in different worldwide locations (with different cultural traditions and local practices of supporting assignee mobility). Nonetheless, the data can help to guide relocation professionals in their long-term international-assignment policy design and review, assisting them by determining the frequency with which certain policy components are found, and helping them to understand why policy change is taking place. © 2013. This article first appeared in the Spring 2013 edition of Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein. Back issues of Re:locate magazine can be viewed here.