How short-term assignments are reducing costs while retaining talent.
By Debbie Bolla
It’s pretty evident: Short-term assignments for corporate relocation are on their way to becoming a long-term solution. The numbers are in favor of this strategy for both domestic and international mobility. A Mercer 2012 Survey of International Assignment Policies and Practices reported that 51 percent of respondents saw an increase in short-term assignments during the last two years, and 71 percent expect an increase in the next 24 months. And a 2012 Worldwide Employee Relocation Council (WERC) survey had similar findings of 66 percent of organizations anticipating an increase in this type of solution.
“Based on our work with clients, we attribute the increase in short-term assignments directly to their business’ needs,” notes Bill Nemer, senior vice president of client services for Graebel. “Frequently, project-based, short-term assignments can bring essential talent to the work site to achieve clear objectives, and once completed, the assignee returns to the original work location.”
So what exactly does a short-term assignment entail? Typically an employee transfers to the new location for a three- to 12-month project, which sometimes can extend to 18 months tops. Candidates are placed in corporate-type housing, and family is sometimes included, depending on circumstance. The taxonomy of short-term assignments is often interchanged
with developmental assignments (typical of skills transfer) or rotational assignments, which occur in a series and at a few different locations (typical with training). Some—but not the majority—of project work can also be solved with long-distance commuting or frequent business travel.
There are plenty of upsides for short-term assignments from the perspective of both the organization and their employees. First and foremost comes cost reduction. Much of the heavy lifting associated with corporate relocation is eliminated with these temporary projects.
“Short-term assignments are a much better financial proposition, and that is why organizations are finding them so attractive,” explains Deborah Graham, vice president of global client relations for Paragon Global Resources.
Graham notes that compared to loss on sale programs, short- term assignments are much more cost effective. Loss on sale programs are a newer, but now typical, offering of long-term relocation solutions that help supplement the cost associated with a homeowner’s loss on house sale. This type of solution helps encourage employees to move since the threat of money lost on a home is softened, but it can cost an organization between $16,000 and $100,000.
Short-term assignments are attractive to employees since they offer the opportunity to grow new skills and enhance career development. The chance to work in a new business unit in
a new location is an excellent development opportunity for employees. The setting allows for a strong knowledge exchange that can occur between several locations. A sense of loyalty
and belonging is likely to grow on the employee side, since
the short-term assignment can be seen as an investment and personal commitment from their organization.
“They are a great tool for retaining talent, as well as bringing people on board,” says Paragon’s Graham. “It gives an opportunity for companies to move people around a little
bit more, increase their training, and get more hands-on experience. You look to be an employer of choice.”
Sports apparel company Adidas believes the opportunities short-term assignments provide for employees are vast. “We’ve used them for rotational learning to get people experienced
in different areas, learn new cultures, experience different process flow, and see how different teams work together,” reports Stephanie Nowicki, mobility manager for the Americas for adidas. “It can be used as a tool for retaining employees. After the short-term assignment, if a position comes up in that location, they have been there and have a chance to stay. It’s a huge win in maintaining our international culture.”
It boosts both skills development for new and seasoned employees. “Short-term assignments are viewed as a way to develop talent within an organization, whether the employees are new hires on a rotational track working in different global locations as they learn the business, or for technically proficient employees whose skills are needed for projects managed outside the headquarters,” says Graebel’s Nemer.
The flexible arrangement appeals to global organizations for their entire workforce and footprint. “Short-term assignments are being recognized as an appropriate mobility tool for both global and U.S. domestic moves,” notes Cara Skourtis, vice president of global operations for NuCompass Mobility Services. According to a WERC survey last year, short-term assignments tend to be more regionally focused than their long-term counterparts. The study reveals that 50 percent of companies headquartered in the Europe/Middle East/Africa (EMEA) region and 75 percent of the Asian-headquartered firms leveraged short-term programs for their organizations regionally.
International short-term assignments tend to be appealing to employees on several levels. “There’s the opportunity
for overseas experience without the need for assignees to completely uproot themselves. They can be mobile and can gain experience, but it’s not as big of a change as a long- term assignment,” says Gail Rabasca, vice president of global operations for MSI. “This is particularly true if the employee has a skill set he or she needs to share in the host location. A short-term assignment enables him or her to do this without too much disruption. They provide the experience of working abroad in another culture and learning how to engage with fellow employees in the same company, but with a completely different ideology and culture.”
Of course, any solution is going to have its own set of challenges and costs (see Figure 1 on page 48). The two biggest concerns with short-term assignments are compliance with immigration and tax rules and regulations, reports WERC’s survey.
While considered a cost-effective solution, fees do come into play, including home leave trips, travel for spouse/partner, furnished accommodations, and personal expenses, among others (see Figure 2 on page 49).
Kate DeFrancisco, director of consulting services for MSI, recommends having a policy in place around spouse and family accompaniment. “Some assignees want these short-term assignments to be accompanied, even when the assignment is only a few months. This may considerably increase the costs of the assignment, and for a potentially short period of time, is it worth the investment?” she asks. “I think it’s important for companies to be prepared for this request and have a policy around what they will or won’t offer.”
Adidas’s Nowicki can vouch for the importance of having a policy around short-term assignment practices. After enlisting these types of programs both formally and informally, the organization decided to move forward with a uniform policy by working with MSI. With up to 25 international assignments a year, Nowicki says there was a need for transparency and visibility. The policy delivers administrative information to the temporarily transferring employee including assignment costs, letter of assignment, family and career support, immigration, culture prep, details of travel to host to location, transportation, insurance, general working hours, vacation time, emergency leave, compensation, allowances, taxation, and guidance for end of the assignment.
And the overarching goal of success on behalf of the organization and the employee should always be considered. “From a talent development perspective, it’s also important to provide the assignee with coaching and mentoring during a short-term assignment,” says MSI’s Rabasca. “This further assists them in broadening their skill sets to a global level and developing a completely different lens than they had previously.”
Advantage: Short-Term Assignments
The recent increase in short-term assignments can be attributed to several factors, explains Cara Skourtis, vice president of global operations for NuCompass Mobility Services. Some include:
• cost control concerns (do more with less)
• project-based work might not require as much time to complete as a traditional long-term assignment
• employee development programs can support rotational assignments to multiple locations
• training opportunities can be provided to more employees by distributing that cost across a broader employee base
• establishing a more mobile-ready workforce allows companies to adjust to global economic or political conditions or expand into new markets more quickly
At a Glance: Short-Term Assignment Stats
• A 2012 Worldwide Employee Relocation Council (WERC) study found that 66 percent of organizations expected an increase in international short-term assignments in 2014.
• A Mercer 2012 Survey of International Assignment Policies and Practices reported that 51 percent of respondents saw an increase of short-term assignments in the last two years, and 71 percent expect an increase in the next 24 months.
• According to Weichert’s Employee Mobility Survey, 56 percent of respondents use alternatives to relocation to keep talent mobile, the most common being short-term assignments.
• Cartus’s 2012 Trends in Global Relocation survey found that short-term assignments are occurring more frequently according to 38 percent of respondents.
• Graebel experienced an uptick of about 20 percent year- over-year, between 2009 and 2011; and in 2012, this type of assignment doubled in volume.