Global Employee Assignments: Which Type is Best?
Whether your business is already global or you’re looking to expand overseas, you’ll likely need to consider global employee assignments as part of your global mobility strategy. You may be faced with a variety of options, so understanding the different types of assignments and their pros and cons will help you to make a decision. Here’s everything you need to know.
Types of Global Employee Assignments
A global employee assignment is a type of relocation whereby an employee is relocated to work in a different country for a certain amount of time. The duration of the assignment is often referred to as either long-term or short-term, however, there are other non-traditional types of assignments you may also opt for.
Typically lasting longer than a month but less than a year, short-term assignments are often used by businesses requiring an employee to undertake a specific project overseas. In many cases, short-term assignments are single-status, meaning dependents and immediate family are not relocated with the employee.
- Often less costly for the employer than long-term assignments.
- Allows you to temporarily fill skill gaps.
- Attractive to employees who do not wish to uproot their families.
- Salary will often be paid in the currency of the home country, meaning there is no conversion required for the employee to pay regular bills, such as a mortgage, making the assignment more appealing to employees.
- The employee can usually continue to make National Insurance contributions, entitling them to benefits such as social security and free public services.
- Immigration reviews are required to ensure the employee can legally work in the country, this can involve lots of resources even though the assignment is relatively short.
- The duration of the assignment may not be long enough to complete the tasks required.
- Family separation can be challenging for the employee.
- There can be some hassle involved with finding short-term accommodation for your employee that isn’t a hotel room.
- Depending on the location and stay duration, there may be a requirement to pay taxes to the host country.
Often expanding across 1-3 years, long-term assignments are often used for strategic purposes such as opening a new office and getting the team up and running, employee development or expanding into new markets.
- Employees can make invaluable business relationships and gain specific expertise in the host country.
- Long-term assignments can result in more productive employees who feel valued and challenged.
- Employees will often be relocated with immediate family and dependents, meaning they can feel more settled, often resulting in higher productivity.
- A longer duration of stay allows for larger projects to be established and completed.
- There can be high costs associated with long-term assignments including moving expenses, cost of living adjustments and host country accommodation. Some of these costs are ongoing throughout the assignment.
- There are likely to be tax implications for the business as well as increased administration and compliance requirements.
- The employee may decide to stay in the host country, resulting in losing the employee in the long term.
- Employees are required to adapt and adjust to a new home and culture, which can result in an initial interruption to the working routine.
As the name suggests, a permanent transfer means your employee will be relocated to a new country for an indefinite period. This is typically the case when an employee is set to manage a new international office permanently, the employee has initiated the relocation or your business requires a skill which is scarcely available in the host country meaning you need to send talent overseas.
- Your business can avoid the cost of rehiring and training new employees overseas.
- You already have a working relationship with your employees, meaning you can trust their skills, knowledge and relationships with other teams such as HR – which makes communication simpler.
- Once relocation fees have been paid, there is typically less long-term financial support required of your business such as allowances, you will simply be paying a salary in the form of a local pay package. However, this is not always the case.
- Employees are entitled to host country benefits and remuneration, which, depending on location, can require additional benefits or allowances to ensure the package is attractive.
- Tax implications, legal requirements and administration can be labour-intensive.
- Relocation packages can be costly, often including extras such as language lessons, house-hunting trips and in some cases, children’s education.
Which Type of Global Employee Assignment is Best for My Business?
There are lots of things to consider before making a decision on which type of global employee assignment is most suitable for your business such as:
- What are the business aims of the assignment?
- What are the long-term career development objectives of the employees looking to relocate? Do they align with the objectives of the assignment and will your employees be supported with this should they relocate?
- How long is the expertise of your employee required overseas?