Recent trends in international assignments

The recession has had a notable impact on the volume and profile of international mobility. Sue Shortland reports on recent trends.

The recession has had a notable impact on the volume and profile of international mobility. Sue Shortland reports on recent trends.As the global recession has deepened, so international relocation activity has begun to decline. In 2009, only 37 per cent of organisations surveyed in Brookfield Global&#x;Relocation&#x;Services` annual&#x;Global Relocation Trends Survey1&#x;believed that the number of international moves increased in the previous year, and only 33 per cent felt that international mobility would continue to increase in 2009. The volume of international mobility is always subject to rises and falls; for example, we saw a dip in international activity after 9/11. The general overall trend, however, remains upward, for various reasons. Expatriates fill a number of critical functions: strategic, operational and developmental.

As organisations increasingly attempt to decrease cost and boost productivity, there is much to promote the concept of localisation, in terms of training and developing local nationals to manage international subsidiaries. Indeed, organisations may well find themselves having to agree to do so as part of their foreign investment strategy, this being part of their negotiations with governments to set up and enter particular environments. Training and developing local people brings with it particular challenges typically, it either requires these individuals to be brought to the HQ operation country for training and development or the use of assignees from HQ or other company locations to put into effect the knowledge transfer. Either way, the consequence is expatriation. To move assignees from the HQ or a third country to the local subsidiary is very much a tried-and-tested method of knowledge sharing, and acts as a developmental experience for the assignees themselves. This also serves to enhance the talent management process.

Changing demographics

Recently, there have been some interesting developments in terms of the demographics of expatriate transfers. As economic conditions have worsened, so the assignee profile has undergone some notable changes. Brookfield reports that, in its 2009 survey, only 9 per cent of the sample are aged between 20 and 29 down 5 per cent from the previous survey and the lowest figure in the history of the survey. Some 38 per cent are aged 30-39 (up 2 per cent); 27 per cent are between 40 and 49 (up 5 per cent); 14 per cent are between 50 and 59; and 2 per cent are over 60. This is an interesting finding, as it indicates a strategy of risk reduction amongst employers; they appear to be sending more seasoned and experienced individuals abroad, rather than younger people, who are more likely to be on developmental assignments.

As might be expected, training and development is one of the first aspects to be cut in gloomy economic times, and, as a result, developmental assignments for younger staff appear stymied. That said, Brookfield`s indepth research in particular sectors2 suggests that not all are following this trend. For example, the oil and gas industry is experiencing the threat of future talent shortages, as previous recessions and falls in oil prices led to similar cuts to training and development for existing staff, as well as reductions in the intakes of young people to the industry some years ago. There are now forthcoming demographic shortages, which means that, in this industry, the international mobility of the younger age groups is still being promoted as the traditional expatriate population approaches retirement.&#x;

As the age profile has increased, it would be expected to have an effect on marital and family status, and this is, indeed, the case. Brookfield reports 67 per cent being married (up 7 per cent). Yet only 49 per cent have accompanying children (down 2 per cent, and the lowest figure in the history of the survey). This might reflect employers` reluctance to send families because of the higher costs involved, and/or employees` desire not to move their children for&#x;educationreasons.

A major stumbling block to mobility has always been spousal careers. It is potentially debatable if this issue is having such a strong negative impact on assignment acceptance today, owing to unemployment in the Western economies (the traditional sending locations). For example, Permits Foundation3&#x;reported in 2008 that, although 90 per cent of spouses and partners were employed before expatriation, this figure fell to 35 per cent during the assignment. Brookfield`s 2009 data indicates that only 32 per cent of spouses were employed before the assignment, 10 per cent were employed both before and after the move abroad, and only 3 per cent were employed during the assignment when they were not previously in employment. The Brookfield sample and data are not directly comparable to those of Permits, so it is dangerous to make direct comparisons, but spousal employment prospects during an international move do appear to have worsened, although it could be argued that their employability at home has become less favourable as well.

Changing assignment types

Assignment types are changing, too. Brookfield reports 61 per cent of assignments being long term in its 2009 survey, with 22 per cent being short term and 12 per cent being one-way transfers. Flexible assignment types, including frequent-flyer and commuter-style arrangements, are gaining in popularity. Although short-term assignments are gaining ground, owing to their potential to provide flexibility and reduce costs (especially if they are unaccompanied), long-term assignments are recognised as providing stability of leadership and the opportunity to increase strategic capability2.

Although the USA and the UK feature strongly as assignment locations (they traditionally attract some of the highest volumes of moves), China has overtaken them as the lead destination. Brookfield1&#x;reports that 19 per cent of all international moves are to China, and it is the top emerging destination for expatriation. Yet it is the country that presents the greatest challenge for expatriates and relocation programme managers, and has the highest rate of assignment failure.

International mobility remains of vital importance to organisations as globalisation continues apace. Realignment of operations, and the requirement to ensure local productivity and accountability, remain key concerns, and expatriates are the trusted agents of corporate control to ensure these take place effectively. While the profile of assignments, assignees and locations is in a state of some flux, it is important to ensure that international assignment policies address changing strategic and operational issues.

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Sources

1. 2009 Global Relocation Trends Survey Report, Brookfield Global Relocation Services,www.brookfieldgrs.com
2. International Mobility: Impact of the Current Economic Climate, Brookfield Global Relocation Services,&#x;www.brookfieldgrs.com
3. Expatriate Spouses and Partners Employment, Work Permits and International Mobility: international survey and summary report, Permits Foundation,&#x;www.permitsfoundation.com

A companion article (see here) addresses recent trends in policy design and review, and new Re:locate factsheets on domestic and international relocation policy, accessible via www.relocatemagazine.com, provide the underpinnings to assist readers in developing policy.


&#x; 2010. Article taken from pages 15 and 16 of the spring 2010 edition of Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent&#x; 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.