Global Employee Mobility – Increased diversification across types of international assignments used

• Increased variety in type of assignments and in policy approach
• Short term assignments clearly on the rise
• Number of female assignees increase by 6% percentage points on average since 2010

Dubai, UAE, January 26 2016: A majority of multinational companies (56%) expect to increase their use of short-term assignments in 2015/16 according to a report on expatriate policies and practices by Mercer - a global HR consulting leader in talent Management, compensation and benefits and global mobility. The research highlighted an ongoing diversification in the type of assignments used by companies. Notably, over the next year or so, around half of companies anticipate an increase in the use of permanent transfers (54%) and developmental training assignments (50%) A smaller proportion of respondents (44%) expect to see an increase in more traditional long-term assignments.

“Companies are using a more varied range of assignments in order to respond to evolving business needs and changing patterns in the global workforce,” said Rob Thissen, consultant in Mercer’s mobility business, based in Dubai.  “Especially developmental assignments are a trend in our region, with many Middle Eastern multinationals sending staff abroad to acquire skills and learn from different (business) cultures.”

Mr. Thissen added: “The increased diversification of assignment types adds complexity which can result in potential compliance and policy challenges for HR and mobility directors. Whereas tax isn’t a major concern in the Middle East, intra-regional moves do tend to trigger compliance issues in terms of visas for particular nationalities and the requirement for longer term assignees to have a local contract. And how to manage payroll obligations in the form of WPS for short term assignees or commuters into countries such as the UAE and Saudi Arabia?

Mercer’s Worldwide Survey of International Assignment Policies and Practices report covers 831 multinational companies with approximately 29 million employees combined. The report noted a marked increase in companies with multiple policies (64%, up from 57%), a consequence of the diversifying trend in assignments. “One policy is unlikely to fit all, and such an approach can lead to inadequate compensation which again can make it difficult to attract and retain talent. Implementing fit-for-purpose policies, to suit both different assignees and assignments, can be a highly efficient cost-saving initiative for most global mobility functions,” said Mr Thissen.

Assignment drivers, obstacles and demographics
The top five drivers behind international assignments are; to ‘provide specific technical skills not available locally’ (47%), to ensure ‘know-how transfer’ (43%), to provide ‘specific managerial skills’ (41%), to facilitate ‘career management and leadership development’ (41%) and fulfil ‘specific project needs’ (40%). In the future, 57% of companies expect the number of key or strategic assignments to increase, 51% expect to deploy a higher number of younger assignees and 41% anticipate more assignments to remote locations.

‘Dual career’, i.e. the challenge of effectively helping to manage the career aspirations of the spouse, and ‘family issues’ are cited as the main barriers to employee mobility, with 37% of respondents citing these issues combined as a large or very large obstacle. The ‘cost of current conditions’ ranks as the second highest obstacle (35%), followed by ‘hardship considerations’ (25%) and ‘career management’ (23%).

The cost of assignments and hardship considerations are particularly valid for our region. With the GCC countries having one of the highest net salary levels in the world, expatriating employees to other regions becomes very costly, especially in high tax locations. And with the majority of companies and regional HQs focusing on the Middle East and Africa, assignment destinations are not always among the most desirable – meaning high security costs and the need for additional incentive payments to facilitate key talent to move.

The proportion of female expatriates has increased somewhat, with the worldwide average participation standing at 15%, up from 12% in 2013 and 9 % in 2010. Although an upward trend, this figure is still far below the composition of the average workforce Age-wise the majority of long-term assignees (66%) are between 35-55 years old, whereas short-term assignees are increasingly younger, under 35 years old (48%, up from 45% in 2013). With an average of 10% and 7% representation in long and short term assignments respectively, the over 55s remain very underrepresented in a mobility context. Looming skills shortages as a result of an ageing population is likely to change this picture over time.